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Modeling The Eu'S Everything But Arms Initiative For The Least Developed Countries

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  • Trueblood, Michael A.
  • Somwaru, Agapi

Abstract

This study attempts to answer two key questions: what will be the likely impact of the EU's Everything But Arms (EBA) proposal, and, what would be the impact if the United States also were to implement a similar proposal? Using the GTAP model, the preliminary results in this paper show if only the EU's EBA proposal were implemented, then welfare in the least developed countries (LDCs) would increase by $2.5 billion (0.53 percent of their GDP), exports would grow by 3 percent, and GDP would grow by 2.3 percent. If the United States and the EU both implemented similar programs, then LDC welfare would increase by $3.1 billion (0.66 percent of GDP), exports would increase by 3.7 percent and total GDP growth by 2.9 percent. Another version of this scenario assumes that LDCs lack the supply capacity to exploit the new trade opportunities. In this case, LDC welfare increases by $0.9 billion (0.2 percent of GDP), exports grow by 4.1 percent, and GDP grows at 2.3 percent. The impact of this last scenario still may be overstated, given that trade preferences are not fully accounted for in the GTAP tariff database. Overall, the results suggest that improving market access for the LDCs could help raise per capita incomes above trend projections, but the gains are modest.

Suggested Citation

  • Trueblood, Michael A. & Somwaru, Agapi, 2002. "Modeling The Eu'S Everything But Arms Initiative For The Least Developed Countries," 2002 Annual meeting, July 28-31, Long Beach, CA 19642, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea02:19642
    DOI: 10.22004/ag.econ.19642
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    References listed on IDEAS

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    1. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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    1. Katerina Gradeva & Inmaculada Martínez-Zarzoso, 2016. "Are Trade Preferences more Effective than Aid in Supporting Exports? Evidence from the ‘Everything But Arms’ Preference Scheme," The World Economy, Wiley Blackwell, vol. 39(8), pages 1146-1171, August.
    2. Katerina Gradeva & Inmaculada Martínez-Zarzoso, 2009. "Trade as Aid: The Role of the EBA-Trade Preferences Regime in the Development Strategy," Ibero America Institute for Econ. Research (IAI) Discussion Papers 197, Ibero-America Institute for Economic Research.
    3. Malginov, Georgiy (Мальгинов, Георгий) & Radygin, Alexander (Радыгин, Александр), 2015. "Property management of the state treasury of the Russian Federation: some of the current trends [Управление Имуществом Государственной Казны Рф: Некоторые Актуальные Тенденции]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 20-46.
    4. Lucian Cernat & Sam Laird & Luca Monge-Roffarello & Alessandro Turrini, 2003. "The EU's Everything But Arms Initiative and the Least-developed Countries," WIDER Working Paper Series DP2003-47, World Institute for Development Economic Research (UNU-WIDER).

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