Belarusian Economic Research and Outreach Center

The Trade Effect of GSP Removal: Evidence from Belarus

Abstract

Under the Generalized Scheme of Preferences (GSP), rich countries grant unilateral trade preferences to developing countries. We study the EU’s withdrawal of GSP preferences from Belarus in 2007 to understand how the GSP a ects export patterns. The withdrawal caused a signi cant drop in trade for a ected products (26%-29% trade decline) and some trade reduction at the extensive margin. However, there is little evidence of a GSP e ect on total trade. This is due to the fact that the main exports of Belarus were not eligible for the GSP program.