Trade Agreements Developing Countries

Many developing countries themselves have high tariffs. On average, their tariffs on the industrial products they import are three to four times higher than those of industrialized countries and have the same characteristics of peaks and escalation. Tariffs on agriculture are even higher (18%) than tariffs on industrial products8 The Commission`s 2012 Communication „Trade, Growth and Development: Adapting Trade and Investment Policies to the Most Needy Countries“[1] marked a significant shift in the EU`s trade and development paradigm. Although it remained at the heart of development strategies, she stressed the growing need to distinguish between developing countries in order to focus on the poorest. It aimed to strengthen synergies between trade and development policies, such as the principle of EU Policy Coherence for Development and the Communication on the 2011 Agenda for Change[2], and to underline the importance of respect for EU fundamental values and human rights. Improved market access for the poorest developing countries would enable them to use trade for development and poverty alleviation. Providing the poorest countries with duty-free and quota-free access to world markets would greatly benefit these low-cost countries for the rest of the world. Recent market opening initiatives by the EU and some other countries are important steps in this regard.10 To be fully effective, this access should be made permanent, extended to all products and accompanied by simple and transparent rules of origin. This would give the poorest countries the confidence to maintain difficult domestic reforms and ensure the effective use of debt relief and aid flows. THE EU`s development policy stresses the importance of trade and focuses on the countries most in need. The Generalised System of Preferences grants preferential access to the EU market for certain products from developing countries. The Economic Partnership Agreements guarantee preferential trade treatment for African, Caribbean and Pacific countries, while the „Everything But Arms“ system applies to the least developed countries.

These rules are in line with the rules of the World Trade Organization. In recent decades, the global economy has grown rapidly. This growth is partly explained by the even faster growth of international trade. Trade growth, in turn, is the result of technological developments and concerted efforts to reduce barriers to trade. Some developing countries have opened up their own economies to fully exploit opportunities for economic development through trade, but many have not. The remaining trade barriers in developed countries focus on agricultural products and labour-intensive manufactures, where developing countries enjoy a comparative advantage. Further trade liberalization in those regions, particularly by developed and developing countries, would help lift the poorest out of extreme poverty, while benefiting the industrialized countries themselves. The Aid for Trade initiative, launched at the WTO Ministerial Conference in December 2005, complements the Doha Development Agenda and supports trade capacity-building to create growth and fight poverty. In 2007, the EU adopted a specific Aid for Trade strategy, which was updated to comply with the United Nations 2030 Agenda for Sustainable Development, the European Consensus on Development Policy and the EU Global Strategy. .

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