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Abstract
Recent statements on European Union (EU) trade policy towards developing countries (DCs) have stressed the need for differentiation between trading partners depending on their level of development. But what does this mean in practice? This article assesses the substance of EU trade policy towards a number of partners at different levels of development on the basis of the texts of recent preferential trade agreements (PTAs). It argues that EU PTA policy exhibits differentiation within a general shift towards reciprocity vis-à-vis DCs and that this needs to be assessed at the level of specific policy areas as much as partner country. It also suggests that the factors shaping EU policy vary from case to case with commercial competition and sector interests relatively more important in PTAs with emerging markets and high-income DCs and norms and institutional factors relatively more important in shaping those with least developed or low-income DCs.
Acknowledgements
The author would like to thank Maurizio Carbone and Jan Orbie as well as all the contributors to the special edition and four reviewers for their helpful insights and comments.
Notes
1 This remains the case despite the agreement reached at the 9th WTO Ministerial Meeting in Bali in December 2013 on trade facilitation, aspects of agricultural trade and some special and differential treatment questions.
2 For an English text of the treaties see, for example, Official Journal C 115 of 9 May 2008.
3 See http://ec.europa.eu/trade/policy/countries-and-regions/regions/eac/ [accessed 10 November 2013].
4 See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:289:0003:1955:EN:PDF [accessed 10 November 2013].
5 See http://ec.europa.eu/trade/policy/countries-and-regions/regions/andean-community/ [accessed 10 November 2013].
6 See http://ec.europa.eu/trade/policy/countries-and-regions/countries/south-korea/ [accessed 10 November 2013].
7 A better test of EU policy vis-à-vis emerging markets would of course be a PTA with India or Mercosur (Brazil), but neither of these had been concluded at the time of writing. A further PTA would be the EU–Central America agreement, which constitutes a region-to-region agreement. In many respects the EU–Central America text is the same as that for Colombia and Peru however.
8 GATT Art XXIV refers to a ‘reasonable period of time' to achieve liberalization, which has been generally interpreted by WTO members to mean anything between 7 and 15 years or even up to (or beyond) 25 years in some recent PTAs.
9 This generally includes agricultural products, such as in the discussion of tariff liberalisation in PTAs. The EU has not entertained any debate on subsidies in PTAs. It has however made some commitments to phase out export subsidies for products covered by the tariff liberalisation schedules in the CARIFORUM EPA (Art 28 EU-CARIFORUM EPA).
10 The EU has interpreted Art XXIV of the GATT to apply to north–south FTAs and the ‘substantially all trade’ provisions to mean 90% of trade and tariff lines. DCs have challenged this arguing that north–south PTAs should be covered by the enabling clause or some new interpretation of Art XXIV.
11 Some 65% of EAC MFN tariffs are already zero, so the initial commitments would not remove any tariffs.
12 Cumulation is the method by which the working of a product in more than one country can contribute to that produce acquiring originating status and thus qualifying for preferential treatment under a PTA.
13 For example, this would apply to an EU-Mercosur FTA with common rules of origin to those used in the Colombia–Peru PTAs.
14 The condition that parties must adopt the same (EU defined) RoO is problematic in that there are competing systems of RoO such as the NAFTA system. This means DCs must comply with different rules when exporting the EU or the USA. The current negotiations with Canada are important in this respect in that the aim is to agree to a mutual recognition of RoO, this could set a precedent for other agreements and dispense with the requirement to have common rules.
