Unilateral Preferential Trade Agreements

The second explanation for non-use concerns delays in the presentation of preferential export documents by the authorities. Taking this statement into account, we should see unexpected increases in preferential use that are not correlated to price or tariff ranges (random events due to random delays). A unilateral trade agreement is a trade agreement imposed by one nation with no regard for others. It benefits only one country. It is one-sided because other nations have no choice in this matter. It is not ready to negotiate. A final element to be assessed in the “value” analysis of preferences is the degree of preferential use of Mozambican exporters16. A widespread criticism of preferential regimes is that covered products are often products that are little exported by beneficiaries.17 In the case of Mozambique, this criticism could apply to the Cotonou agreement, where few agricultural products offer preferential access. but not for the EBA initiative, because the few excluded products are not exported from preferential access (i.e. rice, bananas) and sugar is exported at very advantageous prices (and with the increase in quotas). Unilateral trade policies, such as tariffs, work very well in the short term.

Tariffs increase import prices. As a result, prices for locally produced products appear to be lower in comparison. This stimulates economic growth and creates jobs. All Mozambican exports are duty-free under the ABE9 initiative. This situation has two consequences: (i) the preferential margin available for Mozambique is in fact the full MFN tariff, since the preferential tariff is zero, and (ii) any access through the MFN system would automatically indicate that preferences are not used (see the following section for an assessment of utilization rates in Mozambique). Second, the term “preferential trade agreements” can be used for agreements with a partial scope. These agreements provide preferential market access by reducing import tariffs to a limited amount of goods. The main source of data for analysis is the EUROSTAT COMEXT database. It contains information on volume, quantities, country of origin and whether exports have been eligible and whether they are preferential. It is important to note that we understand, through preferential use, whether preferences have been requested, as the database does not provide any information on the refusal of the preferential regime upon arrival in the EU.7 The price of the product uses the unit value determined by deriding the value of exports with the corresponding number of tonnes or items. All unit values are expressed in euros per tonne.