Impacts of Aid for Trade on Trade with the EU The Role of Old and New Member States
Keywords:Aid for Trade, EU’s development policy, EU-15, New member states, Gravity model
Aid for Trade (AfT) is a new international program supporting developing countries to adjust to the multilateral trading system and to benefit from the liberalization process, by granting them more focused development assistance. The European Union is the largest aid provider in the world, and the EU has also incorporated the principles of AfT in its development policy. Previous research has proved that AfT is able to expand trade between developing countries and the EU itself. However, it is not yet clear whether this trade expansion is only the result of the EU-15’s activity or the new EU member states also contribute to it.
Present research aims to investigate the impacts of the AfT assistance provided by the EU-15 on the trade between the EU-15 and the recipient countries, and on the trade between the new EU-members and the recipients, respectively. The results of the gravity model indicate that the EU-15 is a more attractive market to ACP countries than the new member states: AfT provided to ACP countries positively influences the exports to EU-15, while it has no significant impact on trade with the new member states.
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