2.2.2 Product Coverage
Another reason why preferences may fail to meet their expected goals is inadequate product coverage. All else equal, the more products that are included in a preference scheme, the better. Therefore, disregarding products where the MFN tariff is zero, which implies that their inclusion in a preference scheme is irrelevant, more extensive schemes will generally also be more valuable. Obviously, the type of product included matters a lot. For an individual developing country, it makes a large difference whether its comparative advantage products are included or not. On the other hand, given that preferences are supposed to enhance diversification into new products, evaluating preferences solely on the basis of what is historically perceived as comparative advantages is a mistake, and the inclusion of non-traditional export goods may also be important. See Brenton (2003) for an interesting discussion of how the current export structures of LDCs matter for the relevance of the preferences they are offered, in terms of both increasing the value of exports and leading to diversification.