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EU Trade Preferences and Developing Countries: A Gravity Model Investigation of the Everything But Arms Treaty
Jönköping University, Jönköping International Business School, JIBS, Economics.
2012 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This thesis analyses the effects of EU’s Everything But Arms agreement on the leastdeveloped countries (LDC’s) and a set of other developing countries left outside thetreaty. It searches to prove if the LDC’s are capable of benefitting from the agreementor if they remain at the same level of exports. The change between the year before thereform; 2000, and 2004 is considered. Many studies of trade preferences make use of exante General Equilibrium models; yet there are not many executed on ex post results.This examination therefore provides an interesting outcome, applying the gravity modelof trade to evaluate the results of the EBA agreement. The hypothesis is that the EBAinitiative has increased the import value to the EU from the least developed countries, andcomparatively diminished import value from the other developing countries. However,the empirical analysis disproves that the EBA initiative had a significant effect on the leastdeveloped countries’ exports. For the time period studied, trade with the European Unionhas not increased more for the countries within the EBA agreement, compared to thoseoutside it. With the result that the EBA initiative has been ineffective in its initial stages,the duplicitous policy of the EU is considered; helping the LDC’s by liberalizing trade, yethindering them from entering their market, through subsidizing domestic agriculture andmaintaining protectionist regulations on imports.

Abstract [sv]

Denna kandidatuppsats analyserar effekterna av EU:s Everything But Arms handelsavtalmed de minst utvecklade länderna. Den söker utreda om de gynnas av avtalet och omde får en betydligt högre exportnivå jämfört med en grupp andra utvecklingsländer sominte inkluderas av avtalet. Förändringen mellan året före avtalet, 2000 och 2004 bedöms.Många studier av handelsförmåner använder sig av en ex ante allmän jämviktsmodell,men få studier finns på redan sammanställd data. Denna uppsats ger därmed ett intressantbidrag genom att tillämpa en gravitationsmodell för att utvärdera handelsresultatet avEBA-avtalet. Hypotesen är att EBA-initiativet ökat importvärdet till EU från de minstutvecklade länderna samt relativt minskat importvärdet från de andra utvecklingsländerna.Resultaten motbevisar dock att handeln ökat mer för EBA-länderna än för de andrautvecklingsländerna, och visar därmed att EBA-avtalets inverkan varit obetydlig i dessförsta skede. Med detta resultat, analyseras EU:s tvetydiga politik: samtidigt som destödjer de fattigaste länderna, skadar de dem genom att försvåra för dem att komma in påmarknaden då de vidmakthåller protektionistiska importregler samt subventioner av detegna jordbruket.

Place, publisher, year, edition, pages
2012. , 26 p.
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-19309OAI: oai:DiVA.org:hj-19309DiVA: diva2:548780
Subject / course
IHH, Economics
Presentation
2012-02-03, B4043, Internationella Handelshögskolan i Jönköping, Gjuterigatan 5, Jönköping, 13:00 (English)
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2012-09-06 Created: 2012-08-31 Last updated: 2012-09-06Bibliographically approved

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