EU preferential trade arrangements and developing countries

In this paper, I offer an overview and qualitative assessment of the EC preferential trade arrangements with developing countries. My main conclusion is that beyond the obvious rent transfers accompanying such preferences, a definite positive impact of these arrangements on developing countries is difficult to detect. To some degree, given the multi-layered European arrangements, it is not entirely clear what these preferences have meant. Indeed, preferences to one set of developing countries have probably come at the expense of another. The preferences may have also reduced pressures for trade liberalisation within the preference-receiving countries thereby undermining the internal policy reform that could have promoted faster expansion of trade and possibly growth. Therefore, on balance, developing countries as a group will benefit more from a less discriminatory approach centred on the forthcoming Doha Round with the least developed countries assisted through direct aid.