Effectiveness of Preferential Trade Arrangements and Aid

Since the First Yaoundé Convention (1963-1969), the EU has been implementing its development policy in the African, Caribbean, and Pacific (ACP) countries. This paper focuses on the trade and aid flows between the EU and the ACP countries and attempts to evaluate the effectiveness of the EU’s development policy. It seems that the preferential trade arrangements between the EU and the ACP countries have neither substantially increased nor diversified trade between these two groups of countries. Additionally, although the EU has provided considerable amount of financial aid, the ACP countries continue to suffer from the lack of development-enhancing political and judicial institutions. The most recent Cotonou Agreement intends to address the shortcomings of the economic cooperation between the EU and the ACP countries. 1