The World Bank

This paper examines the nature of trade preferences for apparel and the evolution of apparel trade from developing country beneficiaries to conclude that preferences have been an important factor in stimulating diversification into manufactures for certain developing countries. For example, AGOA has led to substantial increases in imports from a number of Sub-Saharan Africa countries. Nevertheless, for most African countries the value of EU, US and Japanese preferences are very low or negligible. However, the scope for preferences to facilitate diversification into the apparel sector is limited by the lack of consistency across the different preference schemes. Typically, an apparel product from Africa that can enter under one country’s preference scheme will not be able enter under another due to differences in the rules of origin. Allowing an African apparel product the same access to all preferential markets would help to alleviate any impact from preference erosion. More generally, there is the issue of how to assist the majority of countries in Africa as preference erosion removes a route for future export diversification