The external policy of the EU is generally considered to consist largely of trade negotiations on various bilateral and multilateral stages. There is much debate over the effectiveness of policy with respect to the developing world; in the context of this discussion I have used the term 'developing world' in its widest sense, although I will most commonly focus on the Mediterranean counties, ACP, and Latin America. It should also be made clear that for these purposes I will not be drawing too much on historical background, rather examining the issue over the last fifteen to twenty years, and how the changes in political climate within Europe may be affecting the developing world in the future.
It is interesting to note that this essay comes at a time when increasing pressure from the USA and other member of the WTO to liberalise trade are in direct opposition to the talks currently being held on the successor to the Fourth Lomé Convention. This in turn comes into some conflict with the Union's own goals of increasing its scope as a Single Market, and makes for an apparently unyielding division of loyalty
This essay falls naturally into two main sections; I shall concentrate first on External and then Internal policy of the EU. In the first section I shall devote some time to exploring the economic arguments surrounding the individual trading preferences granted to many developing countries, before looking more closely at the wider implications of such systems and how some countries stand to gain more than others from the system.
The second section covers the far-reaching effects of internal EU policy on the developing world, touching briefly on the implications of the Common Agricultural Policy before analysing the effects (both realised and potential) of widening and deepening the Union in terms of the developing countries.
I hope to demonstrate that, despite being a complex and multi-faceted issue, the overall conclusion must be drawn that the EU policy over the recent past has been lacking in any real worth in aiding development in the Third World.
EXTERNAL POLICIES OF THE EU
One of the problems of trading relations as exemplified by the Lomé Convention of 1975 is that, despite ostensible being a co-operative arrangement, it is patently clear who the dominant partner is. Inclusion of the safeguard clause, and the EU's perceived willingness to make use of it means there is uncertainty in developing markets, which hinders investment and therefore growth.
Furthermore, the EU has placed significant limitations on which goods are to be traded freely and which incur tariffs. Those industries which threaten weaker European industries face barriers to trade, however the process of deindustrialisation in the West has meant that these tend to be older primary and secondary industries which are precisely those on which developing countries are likely to concentrate. Tsoukalis rightly points out that free access for industrial exports means very little if there is "little to export" . This could seem to make the gesture of trading preferences seem rather more hollow; nevertheless, the EU remains the most important source of foreign capital for many third world countries .
Most studies on trade effects of EU policy yield a positive result for developing countries, however the broad consensus is that the benefits are at best marginal and short term in nature; that is to say, the growth of exports in a particular nation has been shown to be determined by that country's export supply conditions (degree of outward orientation in business strategy, bureaucratic constraints, activity of investors etc.). However it has also been shown that in those countries where export conditions were indeed favourable, the existence of beneficial trading agreements contributed to the degree of growth success achieved .
The complex network of preferences and agreements which has built up over time in the...
Bibliography: · Hallett, A. J. Hughes, 'The Impact of EC-92 on Trade in Developing Countries ', The World Bank Research Observer, 9 (1), 1994
· Maud, Humphrey, 'Seattle and After: Reflections on the European Union/ African, Caribbean and Pacific Negotiations ', The Round Table, 354, April 2000
· Pedersen, Jørgen Dige, 'The EC and the Developing Countries: Still Partners? ', from Norgaard, Pedersen and Petersen (eds.), The European Community in World Politics, 1993
· Pomfret, Richard, The Economics of Regional Trading Arrangements, 1988
· Stevens, Christopher, 'EU Policy for the Banana Market: The External impact of Internal Policies ', from Wallace and Wallace (eds.), Policy Making in the European Union, Third Edition, 1996
· Tsoukalis, Loukis, The New European Economy Revisited, 1997
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