EU Preferential Trade Policies and Developing Countries
(World Economy, Vol. 25, No.10, November 2002, pp. 1415-32) In this paper, I offer an overview and qualitative assessment of the EC preferential trade arrangements with developing countries. My main conclusion is that beyond the obvious rent transfers accompanying such preferences, a definite positive impact of these arrangements on developing countries cannot be detected. To some degree, given the multi-layered European arrangements, it is not entirely clear what these preferences have meant: preferences to one set of developing countries may have come at the expense of another. The preferences may have also reduced pressures for trade liberalization within the preference-receiving countries thereby undermining the internal policy reform that could have promoted faster expansion of trade and possibly growth. Therefore, on balance, developing countries as a group will benefit more from a less discriminatory approach centered on the forthcoming Doha Round with the least developed countries assisted through direct aid.