Trade Preference Programs Reduce Poverty Rates, But Impact Waning, USTR Report Says

U.S. trade preference programs have helped lower poverty and reduce hunger in several beneficiary countries, but free-trade agreements and general worldwide tariff decreases could dilute the social impacts of these trade programs, the Office of the U.S. Trade Representative said in a report released June 29 that was required by the Trade Preferences Extension Act of 2015 (here). Furthermore, tariff waivers can’t replace policy reforms needed to address bottlenecks in certain countries’ supply chains, the report says. The report also summarizes how specific products and countries have fared after implementation of preference programs: for instance, Kenya, Lesotho, Mauritius and Madagascar accounted for 92 percent of all U.S. apparel imports under the African Growth and Opportunity Act last year. USTR also touted several preference program “success stories,” such as Ethiopia’s surge in shoe exports to the U.S. under the Generalized System of Preferences (GSP) from $630,000 in 2011 to $20 million 2015, a number that continues to rise.