The EU's gains and losses from its trade policy toward developing countries

Abstract

The European Union (EU) is the largest trading platform for the Developing Countries (DCs) offering them free trade. This is granted through both the EU' s bilateral trade agreements and those multilateral governed by the World Trade Organisation (WTO). These agreements since the reform of the GATT to WTO are now based on mutuality and reciprocity. The WTO allows the EU to grant preferential treatment to only the Least Developed Countries (LDCs). While the DCs when exporting to the EU through Generalised Scheme of Preferences (GSP) do not pay too many duties, the LDCs do not pay anything at all as granted by Everything but Arms (EBA). Through these agreements both DCs and LDCs are provided a great degree of access into the EU market. The ability to integrate through trade eases the one of the EU's objectives that of reducing overall poverty. In 1st January 2014 the latest reformed GSP towards DCs was enforced. However, this dissertation concerns previous implemented trade policy towards the LDCs and events caused as a result of their implementation. The focus on the LDCs was done to actually investigate their development in accessing the EU market since they are the countries with the worst economies with whom the EU trades. The reform of the GA TT to the WTO allows for a comparison between the effects from the trade policy during Lome i.e. prior the compatibility with WTO principles and post i.e. during Cotonou. This gives the opportunity to compare the situations by analyzing the differences and propose whether a reform should be conducted.