Preferential tariff reductions: The Philippine response, 1900–1940

The U.S.-Philippine preferential tariff relation (PTR) is examined to determine whether the growth of three major Philippine processing activities can be attributed to the PTR, and whether the PTR provided the Philippines with benefits of important magnitude. The PTR is shown to have been a significant determinant of Philippine production of the products, and of the geographic distribution of their export. The preference subsidy was not large in relation to total Philippine export revenue, although it was sufficiently large to suggest that at least two of the processing activities would not have developed without preference.