Impact of European Union Generalized System of Preferences scheme on fruit and vegetable exports from East Africa: A preference margin approach

Abstract

We evaluate the impact of the Generalized System of Preferences (GSP) scheme on horticultural exports from Kenya, Tanzania and Uganda to the European Union (EU). The preference margin, computed as the difference between trade-weighted Most Favoured Nation’s rate and the ad valorem equivalents(, is used as a proxy for the GSP scheme. The zero-inflated Poisson estimator is used to control for overdispersion and excess zero trade flows, while time-invariant effects control for heterogeneity. The findings suggest that the EU-GSP scheme promotes bean exports from the three East African states as well as pepper from Uganda. Conversely, the results suggest that the scheme seems not to enhance export of asparagus from Kenya, vegetables from Tanzania and bananas from Uganda to the EU.

Keywords

Ad valorem equivalent horticultural exports gravity model Kenya panel data Uganda

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