ABSTRACT
This chapter will provide a non-technical review of the theory of tariff preferences. It will identify the various trade and welfare effects of a preference and so serve to justify the method adopted in this study to assess the importance of the EEC GSP. An attempt is made to bring together different aspects of the analysis usually treated separately: (i) the “hard” theory describing the “static” effects of the granting of a tariff preference, (ii) the extension of this analysis to incorporate quantitative restrictions, (iii) the complications involved in moving from a partial to a general equilibrium framework and (iv) the “soft” analysis of the “dynamic” effects, which are less susceptible to rigorous treatment, but are no less important for that.
