Are EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery

This work assesses the trade impact of preferential schemes in agriculture and shery granted by the EU to the Southern Mediterranean Countries (SMCs) over the period 2004-2009.The analysis presents several methodological improvements to previous works: 1) a continuous treatment - i.e., preferential margins to capture the \average treatment effect" of trade preferences; 2) non parametric matching techniques for continuous treatment to assess the average causal effects of preferences on trade ows; and 3) highly disaggregated data at sectoral level in order to evaluate properly the preferential treatment applied at the product level. Our results show how the impact of EU preferences granted to SMCs is positive and signicant and better evaluated using impact evaluation techniques. We also assess the functional form of the relationship between EU-SMCs preferences and bilateral trade flows as well as the optimal level of preferential margin above which the marginal impact decreases.JRC.J.4-Agriculture and Life Sciences in the Econom