A comprehensive assessment of the impact of the EU new trade policy: A disaggregated product’s approach

Yawa Awa () and Nicolas Péridy ()
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Yawa Awa: Université de Toulon, LEAD
Nicolas Péridy: Université de Toulon, LEAD

Region et Developpement, 2025, vol. 62, 99-122

Abstract: This paper assesses the effects of the European Union’s preferential trade policy over 1995–2023, covering agreements with Mediterranean, Sub-Saharan African, Latin American, Western Balkan, Eastern Partnership, and recent bilateral partners (Canada, Korea, Japan, Vietnam, UK). We estimate a product-level (HS2) gravity model using PPML with high-dimensional fixed effects and incorporate non-tariff barriers (NTBs), rules of origin (bilateral vs diagonal/Pan-Euro Med cumulation), revealed comparative advantage (RCA), and preference-intensity ratios. Three results emerge. First, EU PTAs display a persistent import–export asymmetry: most agreements significantly raise EU imports, while average export effects are weak or negative. Second, institutional design matters: diagonal cumulation yields stronger and more balanced effects than bilateral regimes, whereas NTBs systematically depress trade, especially in complex, regulation-intensive goods. Third, impacts are sector-specific: gains are strongest in value-chain-intensive industries such as chemicals, plastics, machinery, and vehicles, particularly on the import side, while primary and lightly processed goods benefit less. Overall, the effectiveness of EU trade policy depends less on tariff removal than on institutional depth, regulatory convergence, and sectoral alignment. Policy should prioritize simpler, flexible RoO (broader diagonal cumulation) and NTB reduction to translate legal preferences into effective market access.

Keywords: Preferential trade agreements; EU trade policy; Rules of origin; Non-tariff barriers; Gravity model (search for similar items in EconPapers)
JEL-codes: F1 F5 F6 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:tou:journl:v:62:y:2025:p:99-122

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