ABSTRACT
Trade reforms have aided in less developed country (LDC) export growth. Generalized System of Preferences (GSP) has been an efficient reform, though quantitative limits have kept total benefits small in relation to overall LDC trade. The European Economic Community (EEC) limits on the amount of imports receiving GSP treatment from any one beneficiary were introduced with the justification that the limits would ensure an equitable sharing of benefits among the beneficiaries. Reductions in agricultural nontariff barriers would require reducing the variable levy on agricultural products in the EEC. Under the old economic order, the counterpart to the GSP is the most-favored nation (MFN) policy. A regular extension of MFN has evolved out of international bargaining formalized by the reciprocal trade agreements of 1934, which turned the tide in the United States away from a history of high tariffs. The share of LDCs in world trade declined somewhat in the 1960s and increased only slightly in the 1970s.
