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Bilateral Graduation:. The Impact of EPAs on LDC Trade Space. A. DiCaprio 16 January 2010 GDN Annual Conference. Research Question. What role do EPAs play in the continuing evolution of the relationship LDCs have with the international trading system?. Outline. Motivation Background

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Bilateral Graduation:

The Impact of EPAs on LDC Trade Space

A. DiCaprio

16 January 2010

GDN Annual Conference


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Research Question

  • What role do EPAs play in the continuing evolution of the relationship LDCs have with the international trading system?


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Outline

  • Motivation

  • Background

    • Actors

    • EPAs

  • LDC Trends

  • EPA impacts

    • Flexibility

    • Vulnerability

  • Policy Implications


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1. Motivation

EPA literature

LDCs

Strong GDP growth since 1990

De-industrialization in 50% LDCs

Little forward movement in structural weakness

Difficulty capturing gains from liberalization

  • Differentiates impacts among: regions, sectors, individual countries

  • Clear that LDCs impacted differently

  • No studies treat LDCs as a cohesive group

Question remains: How will LDCs as discrete group be affected by their participation, given historical lack of cohesion and spread across ACP regions?


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2. Background: Actors

  • EC

  • African Pacific and Caribbean Group of States (ACP countries)

    • 79 countries

    • 6 geographic regions

  • Least Developed Countries

    • 49 countries

    • UN criteria: low income, human resource weakness, economic vulnerability



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2. Background: EPAs

Lomé Preferences

Cotonou Agreement

Economic Partnership Agreements CARIFORUM

Unilateral

reciprocal




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3. LDC Trends: Preferential Access

SELECTED EC AVERAGE TARIFF RATES BY DEVELOPMENT LEVEL


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4a. Flexibility: Non-reciprocity

EPA CHANGES TO RECIPROCITY FOR LDCS






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5. Conclusions REQUIREMENTS

  • EPAs follow global trend of to re-aggregate developing and LDC preferences

  • Binding commitments innovate on tools available to address vulnerability

  • Precedent set in:

    • interpretation of the relationship between Enabling Clause and Article XXIV

    • future treatment of North-LDC FTA format


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Policy Implications REQUIREMENTS

  • Non-ACP LDCs have a stake in the EPA outcome, could assist in advocacy

  • Room for innovation in addressing vulnerability

    • Would benefit both EC and LDCs

    • But commitments need to be binding

  • LDCs face the choice: continue under SDT system, or participate in design of trade policy institutions