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Abstract
Trade relations between developed and
developing countries are one of the hot topics of the
ongoing World Trade Organization (WTO) negotiations.
The conclusion of the Cotonou Agreement between EU
and African, Caribbean and Pacific countries, the
introduction of the EU’s Everything But Arms initiative
for the least developed countries and the United States’
African Growth and Opportunity Act for 39 African
Countries, represents tangible incentives for many
developing countries to continue their efforts to open
their economies and build free markets. This paper
analyzes the trade creating effects of EU and US trade
policies as total effect, for agri-food products of
developing countries in a gravity model framework.
Data refer to a 10 year period: 1996-2005. The findings
show larger trade creating effects of EU trade policies,
especially for upper-middle income countries. Variation
in trade creation, across the years, is not statistically
significant, except for the low-income countries.