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Bilateral Graduation:

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:

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  1. Bilateral Graduation: The Impact of EPAs on LDC Trade Space A. DiCaprio 16 January 2010 GDN Annual Conference

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

  3. Outline • Motivation • Background • Actors • EPAs • LDC Trends • EPA impacts • Flexibility • Vulnerability • Policy Implications

  4. 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?

  5. 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

  6. Descriptive Statistics

  7. 2. Background: EPAs Lomé Preferences Cotonou Agreement Economic Partnership Agreements CARIFORUM Unilateral reciprocal

  8. REGIONAL CONFIGURATIONS AND STATUS

  9. 3. LDC Trends: Differentiation

  10. 3. LDC Trends: Preferential Access SELECTED EC AVERAGE TARIFF RATES BY DEVELOPMENT LEVEL

  11. 4a. Flexibility: Non-reciprocity EPA CHANGES TO RECIPROCITY FOR LDCS

  12. ENABLING CLAUSE VERSUS ARTICLE XXIV NOTIFICATION REQUIREMENTS

  13. 4a. Flexibility: Modulated Compliance

  14. 4b. Vulnerability: tools incorp’d into FTAs

  15. How EPAs innovate on Aid-for-trade

  16. 5. Conclusions • 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

  17. Policy Implications • 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

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