Trade as Aid: The Role of the EBA-Trade Preferences Regime in the Development Strategy
AbstractThis study focuses primarily on trade preferences offered by the European Union (EU) and in particular on the Everything But Arms (EBA) trade preferences regime, which is targeted exclusively on least developed countries (LDCs). Using the gravity model, an estimation of the influence of the EBA preferences on exports from the ACP LDCs to the EU-15 is presented. The model is applied to the time period 1995 to 2005 for the ACP countries’ exports to the EU-15 and estimated with the help of different econometric techniques. The core questions of the investigation are two: First, to examine the influence of the EBA preferences on the ACP LDCs’ export performance and second to compare the impact of the EBA scheme with the one of official development assistance. In addition to their separate effects the combined impact of EBA and aid flows is also analysed. The main results show a very poor performance of the EBA regime. However, the combined effect of the EBA and aid on exports is positive, indicating that the development strategy of the developed countries, in this case of the EU, needs to include both sorts of assistance, aid and trade preferences.
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Bibliographic InfoPaper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 197.
Length: 40 pages
Date of creation: 18 Aug 2009
Date of revision:
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development aid; trade preferences; Everything But Arms; panel data;
Find related papers by JEL classification:
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F35 - International Economics - - International Finance - - - Foreign Aid
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