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Tariff Preferences, WTO Negotiations and the LDCs: The Case of the 'Everything But Arms' Initiative


  • Wusheng Yu
  • Trine Vig Jensen


By assessing the impact of the recently adopted 'Everything But Arms' (EBA) initiative of the EU on the Least Developed Countries (LDCs) and by showing how further multilateral trade liberalisations erode the EBA preferences and impact the LDCs, this paper attempts to uncover the LDCs' difficult positions in the WTO trade negotiations. Due to its limited product coverage and previous preferences granted by the EU, welfare impacts of the EBA on the LDCs are shown to be small and the bulk of these gains are associated with the 'sensitive' products that are subject to gradual liberalisations. Moreover, these small gains are likely to disappear if the EU conducts trade policy reforms in fulfilling its WTO obligations, resulting in an actually worse-off situation for the LDCs. Extending the analysis to a multilateral trade liberalisation scenario reinforces the above results that the LDCs may well lose due to preference erosion and higher world market prices. It concludes that other development assistance measures from developed countries should be made available to the LDCs to ease their dependency on trade preferences and to foster their supply capacities. The LDCs themselves should attempt to integrate the duty and quota-free market access status contained in the EBA into a binding WTO agreement to secure a stable trading environment. But more importantly, in order to solve the difficulties at the root these countries should actively engage in reforming their own trade policies. Copyright Blackwell Publishing Ltd 2005.

Suggested Citation

  • Wusheng Yu & Trine Vig Jensen, 2005. "Tariff Preferences, WTO Negotiations and the LDCs: The Case of the 'Everything But Arms' Initiative," The World Economy, Wiley Blackwell, vol. 28(3), pages 375-405, March.
  • Handle: RePEc:bla:worlde:v:28:y:2005:i:3:p:375-405

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    References listed on IDEAS

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    Cited by:

    1. John Asafu-Adjaye & Renuka Mahadevan, 2009. "Regional Trade Agreements versus Global Trade Liberalisation: Implications for a Small Island Developing State," The World Economy, Wiley Blackwell, vol. 32(3), pages 509-529, March.
    2. Kohnert, Dirk, 2008. "EU-African Economic Relations: Continuing Dominance, Traded for Aid?," MPRA Paper 9434, University Library of Munich, Germany.
    3. Anania, Giovanni, 2010. "EU Economic Partnership Agreements and WTO negotiations. A quantitative assessment of trade preference granting and erosion in the banana market," Food Policy, Elsevier, vol. 35(2), pages 140-153, April.
    4. Yongzheng Yang, 2005. "Africa in the Doha Round; Dealing with Preference Erosion and Beyond," IMF Policy Discussion Papers 05/8, International Monetary Fund.

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