European Union's preferential trade agreements in agricultural sector: a gravity approach

The European Union (EU) is the first target market for developing countries' and Least Developed Countries' agricultural exports. Preferential trade agreements, either reciprocal or not, play a central role in forming trade opportunities for numerous developing countries. Our objective is to measure the impact of eleven regional trade agreements (RTA) on European agricultural imports with an expanded gravity model. Also, in order to compare these RTAs and their effects we calculate the implied tThe European Union (EU) is the first target market for developing countries' and Least Developed Countries' agricultural exports. Preferential trade agreements, either reciprocal or not, play a central role in forming trade opportunities for numerous developing countries. Our objective is to measure the impact of eleven regional trade agreements (RTA) on European agricultural imports with an expanded gravity model. Also, in order to compare these RTAs and their effects we calculate the implied tariff equivalent. Results indicate that a large number of EU's RTAs support the agricultural exports of developing countries to the EU market. Thus, RTAs are generally an attractive alternative for countries wishing to speed up the move towards multilateral free trade in agriculture. Nevertheless, two most important and unilateral RTAs (Generalized System of Preference expanded by Everything But Arms) and the agreement with Mexico have the negative effect over agricultural exports to EU. We attempt to explain the reasons of their failure