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Title: The Pursuit of Non-Trade Policy Objectives in EU Trade Policy

Author(s): Ingo Borchert, Paola Conconi, Mattia Di Ubaldo and Cristina Herghelegiu

Publication Date: April 2020

Keyword(s): Conditionality, GSP, Non-Trade Policy Objectives and Trade agreements

Programme Area(s): International Trade and Regional Economics

Abstract: The European Union (EU) often conditions preferential access to its market upon compliance by its trading partners with Non-Trade Policy Objectives (NTPOs), including human rights and labor and environmental standards. We systematically document the coverage of NTPOs in EU trade agreements and in its Generalized System of Preferences (GSP). We then examine the extent to which trade agreements and GSP programs can be used to promote NTPOs. Preferential trade agreements are negotiated under multilateral rules, which require members to eliminate all tariffs reciprocally. As a result, once a trade agreement enters into force, the EU cannot easily restrict or extend access to its market so as to "punish bad behavior" or "reward good behavior" on NTPOs by its trading partners. By contrast, GSP preferences are granted on a unilateral basis, so they can be limited or extended, depending on compliance with NTPOs. EU GSP programs can thus provide a carrot-and-stick mechanism to promote NTPOs in partner countries.

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Bibliographic Reference

Borchert, I, Conconi, P, Di Ubaldo, M and Herghelegiu, C. 2020. 'The Pursuit of Non-Trade Policy Objectives in EU Trade Policy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14655