Utilization of Trade Preferences by LDCs: 2015-2019 Patterns and Trends

The fifth in a series by the WTO secretariat for the Committee on Rules of Origin, this new note analyses underutilization of trade preferences and trends thereof from 2015 to 2019. Previous calculations of utilization rates by the Secretariat have highlighted that significant proportions of preferential imports originating in Least Developed Countries (LDCs) do not receive tariff preferences despite being eligible for preferences under at least one preferential scheme. The underutilization of trade preferences by LDCs is in fact spread across preferential schemes, sectors and LDCs, even for products subject to simple rules of origin. Previous analyses, however, focused on individual years.2 As a result, one argument could be that the levels of underutilization observed reflected circumstantial rather than structural patterns. In other words, the underutilization of trade preferences could be explained by annual variations and, as a result, no general conclusions could be drawn. This note intends to investigate that possibility. It reports underutilization rates for the 2015-2019 period to verify some of the findings described in previous notes