Special trade advantages granted by an importing country to certain trading partners, in contrast to nondiscriminatory treatment conforming to the most-favored- nation principle. Most preferences are granted to LDCs by industrial countries to promote export growth and development (see GSP). In addition to preferential tariff rates, preferential application of other measures such as licensing practices, quotas, or taxes may also be granted. The term is not normally applied to special trade treatment granted by a country to its partners in a free trade area, customs union, or common market.
In trade policy, this refers to special advantages, such as lower-than- MFN tariffs, accorded to another country's exports, usually in order to promote that country's development. See GSP. In trade theory, this refers to the attitudes of consumers toward different goods, as represented by a utility function. Some propositions in trade theory use the assumption of identical and/or homothetic preferences.
Trade advantages (such as tariff preferences) given by a country to some of its trading partners in order to promote their export growth and the development of mutual trade relations. Trade preferences are often granted to developing countries (as within the framework of the Lomé Convention) to foster their export sector and economic development prospects. Français: Préférences Español: Preferencias