The Aid for Trade initiative and the export performance of the Iberian EU-countries

As a result of the global economic crisis and crisis in the EU, Iberian exports have been temporarily directed towards other regions such as Africa or Asia, meaning that developing countries have gained larger share in their trade. Nevertheless, trade performance of EU Members is influenced by several EU policies directly or indirectly. Among others, industry policy and international development cooperation policy may have impact on it. Regarding the European international development cooperation development policy, the Aid for Trade (AfT) initiative has a crucial role aiming to improve the supply side capacities in recipient countries. Its overall objective is to help developing countries participate in international trade more effectively. According to Udvari (2013), Aid for Trade assistance provided by the EU generally increases trade between the EU and the recipient countries: 1 percent growth in AfT provided by the EU increases trade 0.1 percent between the EU and the recipient countries. However, there is no information how this increase is distributed among the EU Members, and whether the larger colonizers are in a better position or not. Consequently, this research aims to respond the question how Aid for Trade initiative influences the trade performance of Spain and Portugal. The research – besides analysing the existing literature – is based on an empirical investigation using a gravity model. The results show that Aid for Trade provided by the EU to ACP-countries have a small significant impact on the exports of Spain and Portugal.