Preferential tariffs and development of Norwegian rose import from Africa

Abstract

PurposeImports of cut roses increased after Norway implemented a preferential tariff scheme for the least developed countries in 2002. When the scheme was extended to more countries in 2008 – among them Kenya – imports exploded. This article studies the subsequent changes in supply channels, import costs and the way Norwegian firms imported.Design/methodology/approachQualitative data, obtained through interviews among five rose importers, are combined with quantitative data for all importing firms and transactions in Norway for the years 2003–2014. These data are analysed in light of recent economic theories on international trade.FindingsWhen Kenya was included in the scheme, imports from Europe and domestic production in Norway decreased substantially. Imports from some African countries with low income levels also declined. Importing under GSP involves high fixed import costs due to stringent procedures. Each firm's imports increased gradually, and over time learning may have facilitated importing. Direct trade with African producers and control over the logistics chain seem to have become more important.Research limitations/implicationsThe analysis builds mainly on data for Norwegian importers, not for African exporters.Practical implicationsSimplifying the GSP procedures could increase Norwegian imports from developing countries and induce establishment of new trade relationships, perhaps also for other products than roses.Originality/valueUsing a mixture of original qualitative data as well as unique, detailed and comprehensive quantitative data, the article provides new insights into how preferential tariff reductions for developing countries’ exports to a developed country affect trade and buyer–supplier relationships.