Unilateral Trade Preferences in the EU: An Empirical Assessment for the Case of Mozambican Exports

Unilateral trade preferences are one of the most important instruments offered by developed countries to foster developing country exports. This paper analyzes the impact of unilateral trade preferences on developing countries by focusing on the experience of Mozambique. In this paper, we analyze whether unilateral preferences offered by the EU are “valuable” for Mozambican exporters based on the impact on preferential margins, utilization rates, and export prices. We use a detailed dataset with cif unit values at HS8-digits level covering the period 2000–2007. Our findings indicate that (i) for a large number of product lines, export margins are zero; (ii) utilization rates are generally high; however, (iii) this does not translate into a positive price margins captured by Mozambican exporters compared to MFN competitors. These findings cast doubts on the “value” of preferences and their potential impact on developing country exports