The effects of EU preferential treatment

3 I) Introduction For the last 60 years, the main goal of the World Trade Organization (WTO) -and its predecessor the General Agreement on Tariffs and Trade (GATT) - has been to supervise and promote trade between nations. Throughout its multiple rounds, the organization implemented various measures to reach this objective. Some of them have been the systems of preferences offered by the European Union (or the EEC or EC in the past) to developing countries. These preferential treatments consist mainly of the Generalised System of Preferences (GSP), which the WTO defines as “programs established by developed countries granting preferential tariffs to imports from developing countries 2 ”. In addition to this frame of rules, other types of partnerships between the EU and developing countries exist, as for instance ACP, Euromed or other schemes derived from the ordinary GSP, such as Everything But Arms (EBA) or the GSP-Drug which we will examine more in details in our study. Thus, the main purpose of this paper is to analyse the effects of these treatments and partnerships on trade, or more specifically on the impact of exports to the preference-given countries. By studying thoroughly the literature and comparing the different studies led in the past, we will try to find out which models are the most reliable to evaluate trade growth. This deep investigation will bring us to the conclusion that on the one hand, it’s nowadays accepted that there are some factors which either enhance or limit trade between developing and developed countries, such as language or distance. On the other hand, contradictory results between the different statistical models or data used will lead us to a less successful conclusion that the outcomes of some comparisons are puzzling and therefore, we won’t be 2 WTO | Glossary, GSP, Retrieved on november 6 th 2011 from http://www.wto.org/english/thewto_e/glossary_e/gsp_e.htm