The Pursuit of Non-Trade Policy Objectives in EU Trade Policy

41 Pages Posted: 8 May 2020

See all articles by Ingo Borchert

Ingo Borchert

University of Sussex

Paola Conconi

Centre for Economic Policy Research (CEPR); Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Mattia Di Ubaldo

Economic and Social Research Institute (ESRI)

Cristina Herghelegiu

Université Paris I Panthéon-Sorbonne

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Date Written: April 2020

Abstract

The European Union (EU) often conditions preferential access to its market upon compliance by its trading partners with Non-Trade Policy Objectives (NTPOs), including human rights and labor and environmental standards. We systematically document the coverage of NTPOs in EU trade agreements and in its Generalized System of Preferences (GSP). We then examine the extent to which trade agreements and GSP programs can be used to promote NTPOs. Preferential trade agreements are negotiated under multilateral rules, which require members to eliminate all tariffs reciprocally. As a result, once a trade agreement enters into force, the EU cannot easily restrict or extend access to its market so as to "punish bad behavior" or "reward good behavior" on NTPOs by its trading partners. By contrast, GSP preferences are granted on a unilateral basis, so they can be limited or extended, depending on compliance with NTPOs. EU GSP programs can thus provide a carrot-and-stick mechanism to promote NTPOs in partner countries.

Keywords: Conditionality, GSP, Non-Trade Policy Objectives, Trade agreements

Suggested Citation

Borchert, Ingo and Conconi, Paola and Di Ubaldo, Mattia and Herghelegiu, Cristina, The Pursuit of Non-Trade Policy Objectives in EU Trade Policy (April 2020). CEPR Discussion Paper No. DP14655, Available at SSRN: https://ssrn.com/abstract=3594287

Ingo Borchert (Contact Author)

University of Sussex

Paola Conconi

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
32 2 650 2345 (Phone)
32 2 650 4475 (Fax)

Mattia Di Ubaldo

Economic and Social Research Institute (ESRI) ( email )

Whitaker square Sir john Rogerson's Quay
Dublin 2
Dublin
Ireland

Cristina Herghelegiu

Université Paris I Panthéon-Sorbonne

17, rue de la Sorbonne
Paris, IL 75005
France

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