Rethinking Trade Preferences to Help Diversity African Exports

CEPR Policy Insight No 2

Paul Collier, Anthony Venables

The authors of CEPR Policy Insight No. 2, argue that OECD nations can do something to help Africa kick-start a development process. The key is to offer trade preferences that allow African manufacturing locations to a chance to develop industrial clusters that cross the minimum-scale threshold - thus allowing them to compete with clusters in developing Asia. While preferences have to date failed in this task, the authors suggest key design changes that will give Africa a fighting chance.