The Role of Eba in the Political Economy of Cap Reform

Abstract

This paper explores whether the EU's Everything But Arms (EBA) scheme, under which exports from 50 least developed countries (LDCs) are admitted duty-free to the EU market, influenced the trajectory or pace of Common Agricultural Policy (CAP) reform. It finds no evidence that it played a role except in the case of two products, sugar and rice. The overall volume of exports, or potential exports, from LDCs in CAP products is just too small to create market management difficulties outside of these two products. It could play an indirect role in reform in the future in the context of the Economic Partnership Agreement negotiations between the EU and African, Caribbean and Pacific (ACP) countries under the Cotonou Agreement. ACP countries could use EBA as a benchmark and demand equivalent treatment for their exports in these negotiations in return for liberalising their markets towards EU exports. Any move to extend more generous preferential access to non-LDC ACP countries for CAP-supported products would have much greater implications for the CAP simply because of their greater supply capacity.

Keywords: Everything But Arms, Least Developed Countries, sugar, preferences, CAP reform

JEL Classification: F13, Q17