Rethinking trade preferences for Sub-Saharan Africa: How can trade in tasks be the potential lifeline?

Abstract

Policy-related discussion on assisting countries to make use of trade preferences tends to focus on the provision of hard infrastructure to facilitate external economies from modern-sector exports. This is as opposed to harnessing potential knowledge spillovers. This omission is emblematic of tensions within new trade/new growth theory. Using two country case studies in Asia - Bangladesh and Cambodia - this article shows how different approaches towards making use of trade preferences have resulted in divergent industrial structures and firm-level technological capability indicators. Less stringent rules of origin requirements may offer new opportunities for late industrialisers in sub-Saharan Africa to tap into the modern export sector, but a more interventionist approach towards harnessing knowledge spillovers may also be necessary. © The Author 2013. Development Policy Review © 2013 Overseas Development Institute.