Unilateral Preferential Trade Agreements

The results of this paper have important policy implications. Unilateral preferences are one of the main instruments proposed by the EU to boost export growth in developing countries. However, the results of the paper indicate that the “value” of these systems and their potential effects is likely to be overstated. This is because a significant number of products exported by developing countries did not have a positive preferential margin and, more importantly, because exporters are not able to obtain the price margin associated with preferences. In view of these results and the increasing trend towards preference erosion due to the further liberalisation of the EU market in the future, it is clear that there is a need to focus on other instruments to support developing countries` exports. The way in which free trade agreements are designated may also be different. Most free trade agreements are designated by listing the participating countries and adding the term “FTAs”. For example, the Canada-Korea Free Trade Agreement. However, some free trade agreements are referred to by different names. For example, the Canada-EU Free Trade Agreement is referred to as a Comprehensive Economic and Trade Agreement.

Other countries call their trade agreements Economic Partnership Agreements (EPAs) or Comprehensive Economic Partnerships (CEPs). Other variations are also used. The World Trade Organization defines a unilateral trade preference in the same way: it occurs when a nation pursues a trade policy that is not replicated. For example, sometimes a country imposes a trade restriction, such as a tariff, on all imports. The price paid by the exporter of the country of the most important remuneration scheme for existence is the unit value of the lowest customs duty and a variable that reflects its market power (4). On the other hand, the preferential price is defined by the unit value , sometimes by the preferential duty , a range corresponding to the market power of the exporter in relation to the importer, proxied by its relative market share, and by the compliance costs related to the regime18, which are also accepted per product and consistently over time (5). A final element to be assessed in the analysis of the “value” of preferences is the degree of preferential use by Mozambican exporters.16 A widespread criticism of preferential regimes is that the products covered are often products with little export by beneficiaries17 In the case of Mozambique, this criticism could be transferred to the Cotonou Agreement, where few agricultural products could benefit from preferential access. but not for the EBA initiative, given that the few products excluded from preferential access (e.g.

B rice, bananas) are not exported and sugar is exported at very advantageous prices (and with an increase in quotas). Any Mozambican export is eligible for duty-free access under the ABE initiative9: (i) The preferential margin potentially available to Mozambique is in fact most-favoured-nation law, given that the preferential duty is zero, and (ii) any most-favoured-nation access would automatically indicate that preferences are not being used (see next section for an assessment utilization rates in Mozambique). .

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