Trade, Development and the EPAs

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Trade, Development and the EPAs

• Patrick A. Messerlin
• Professor of Economics, Sciences Po
• Director, Groupe dEconomie Mondiale à Sciences
  Po (GEM)
• The EU, Trade and Development Policy
• Open Europe
• London, 26 March 2007

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Trade for development (1)

• Trade, growth, development, happiness
• Trade as an incentive for better investment in a
  country
• Contracts import-competing industries
• Expands export industries
• Trade liberalization a necessary condition for
  benefiting from the opening of foreign markets
• The cotton case in Africa
• The Round for free (China vs. the EC)

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Trade for development (2)

• Policy space and trade policy
• not endangered by market opening
• tarifftax on consumers and subsidy for producers
• need for targeting
• Behind-the-border agenda
• Huge policy space taxes and subsidies on
  production and consumption of goods, services and
  factors of production
• WTO disciplines generally friendly to domestic
  instruments
• My Kingdom for a Budget!
• Tariffs vs. trading costs

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Trade for development (3)

• Ideal trade policy
• Uniform and moderate tariff
• Tariff cuts under a Swiss formula
• Common virtues
• Economics cutting the highest tariffs
• Politics neutralizing the lobbies
• Policy Space providing fiscal revenues

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A Global Look at the EPAs (1)

• The current EPAs
• Economics cutting the lowest tariffs
• Politics exacerbating the lobbies
• Policy space reducing fiscal revenues
• The EPAs and selected Bilateral Trade Agreements
• Size
• Trade in goods
• Trade in services

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A Global Look at the EPAs (2)
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A Global Look at the EPAs (3)
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Better Alternatives?

• No Doha Deal
• EBA-Plus
• GSP-Plus
• A Doha Deal
• The Hong-Kong 97-Plus Initiative
• A WTO new waiver?
• Limited reciprocity
• MFN tariff cuts ? uniform MFN tariffs

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Thank You !
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The Rise of Bilateralism?
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A Global Look at the EPAs (3)
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The Issue of Farm Tariffs