Chapter 6: The EU and preferential trade

Aims of the exercise

• To utilize the EU’s web resources for research on specific issues


• To gain insight into the principles and policies which underpin the EU ‘s external trade links


• To critically examine the EU’s trade policy with developing countries, assessing its goals and means of achieving them

Getting started
The EU provides a wealth of resources through its Europa gateway at http://europa.eu/index_en.htm. Under ‘Activities’, you will find ‘External Trade’. Click on this link. Under ‘Commission’ on this site, click on ‘Trade’. Here you will find activities, topics and documents. Under ‘trade issues’, click on ‘EU and global trade’. This website is http://ec.europa.eu/trade/issues/global/index. Here you will find ‘Generalised System of Preference’ (GSP), which is the main topic of this exercise. Read through the description of this trade system. (Note that ‘EC’, which stands for ‘European Community’, is often used instead of EU, reflecting legal terminology. For most purposes, ‘EU’ is used.)

Tasks

A. Questions

From information on these pages, answer the following questions:

1. What are the aims of the Generalised System of Preference (GSP) and the GSP+? (Note the provisions in the update of 8 December 2008.) How do these programmes relate to the Everything but Arms initiative?


2. In your view, are these programmes the best means of achieving their stated goals? How does EU policy differ from the policy of the Chinese government, discussed in Strategic Crossroads 6.1?


3. Azerbaijan, which is the subject of the opening vignette of this chapter, is one of the recent additions to the GSP+ programme. What impact will this have on its exporters?

B. Reflection

1. The tariff reductions specified in these arrangements are linked to sustainable development and good governance. To qualify, countries must have ratified numerous international conventions on human rights, labour rights and the environment. In fact, a number of these have not been ratified by major trading nations. Furthermore, it could be argued that mere ratification does not guarantee their observance in practice. But these requirements do set hurdles for would-be country recipients of preferential trade treatment. To what extent do these hurdles serve substantive purposes, or act simply as obstacles to these poor countries qualifying for preferential treatment?

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