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European Union Trade Policy and the Poor. Towards Improving the Poverty Impact of the GSP in Latin America

Listed author(s):
  • Christian Freres

    (Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales (ICEI))

  • Andrew Mold

    (Comisión Económica de Naciones Unidas para África)

The purpose of this policy paper is to analyse and propose ideas about how the European Union could have a greater impact on reducing poverty in Latin America through its trade policy, in conjunction with other policy instruments. To do this, the authors analyze the experience of the EU’s Generalized System of Preference (GSP), a scheme aimed to help poor countries adapt to the international trading system. Overall, this regime has not proven effective for this purpose nor is there any evidence that it has had a significantly positive impact on reducing poverty in developing countries in general or in Latin America. This paper starts with an overview of the context affecting this issue, including a review of the literature on the link between trade and poverty, an analysis of the contemporary situation in Latin America, focusing on poverty and inequality, reasons why it is important to look at the GSP presently, this region’s trade and development experience and overall ties between the EU and Latin America. The second section of the paper begins with a review of EU trade policy towards developing countries, stressing the GSP. Following that, it analyzes how the Latin American countries have used the GSP, with what results and what obstacles. This general treatment is complemented by two case studies, Bolivia and Costa Rica, which illustrate the problems more specifically. The final chapter provides conclusions and policy recommendations that should be taken into consideration in the current process of reform of the GSP.

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Paper provided by Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales in its series Working Papers del Instituto Complutense de Estudios Internacionales with number 0402.

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Length: 54 pages
Date of creation: 2004
Handle: RePEc:ucm:wpaper:0402
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  1. Nora Lustig, 2001. "Life Is Not Easy: Mexico's Quest for Stability and Growth," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 85-106, Winter.
  2. Paul Brenton & Miriam Manchin, 2003. "Making EU Trade Agreements Work: The Role of Rules of Origin," The World Economy, Wiley Blackwell, vol. 26(5), pages 755-769, 05.
  3. Aaron Tornell & Frank Westermann & Lorenzo Martinez, 2004. "Nafta and Mexico Less-than-Steller Performance," UCLA Economics Working Papers 833, UCLA Department of Economics.
  4. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
  5. Aaditya Mattoo & Devesh Roy & Arvind Subramanian, 2003. "The Africa Growth and Opportunity Act and its Rules of Origin: Generosity Undermined?," The World Economy, Wiley Blackwell, vol. 26(6), pages 829-851, 06.
  6. Bebbington, Anthony, 1996. "Organizations and intensifications: Campesino federations, rural livelihoods and agricultural technology in the Andes and Amazonia," World Development, Elsevier, vol. 24(7), pages 1161-1177, July.
  7. Buitelaar, Rudolf M. & Perez, Ramon Padilla, 2000. "Maquila, Economic Reform and Corporate Strategies," World Development, Elsevier, vol. 28(9), pages 1627-1642, September.
  8. Carter, Michael R. & Barham, Bradford L., 1996. "Level playing fields and laissez faire: Postliberal development strategy in inegalitarian agrarian economies," World Development, Elsevier, vol. 24(7), pages 1133-1149, July.
  9. World Bank, 2003. "Global Economic Prospects 2004 : Realizing the Development Promise of the Doha Agenda," World Bank Publications, The World Bank, number 14782, April.
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