It is true that preferential treatment agreements
are sometimes laden with restrictions,
such as excessive health and safety regulations
and administrative costs, which raise
the costs of production for developing world
producers.64 But domestic conditions in the
exporting countries matter greatly. Political
instability and regulatory restrictions, for
example, prevent businesses from expanding
and becoming more efficient. Lack of domestic
economic expansion prevents developing
countries from fulfilling their export quotas.
Moreover, inefficient production can often
price the developing world’s exports out of
the developed world’s markets.