EU Bilateral and Regional Trade Agreements: Impacts on the CAP

<heading id="h1" level="1" implicit="yes" format="display">summary</heading><title type="document">EU Bilateral and Regional Trade Agreements: Impacts on the CAP</title>Since it started in 1992, reform of the CAP has been related in various ways to the WTO. In comparison the impact on CAP reform of the bilateral and regional agreements the EU has concluded is negligible. The EU has found ways and means to shield its agriculture from too much import pressure and the geographical scope of its bilateral and regional agreements is impressive. They cover the countries of the Southern and Eastern Mediterranean Sea, the Western Balkan, ACP countries, South Africa, Chile and Mexico. Free trade agreements with MERCOSUR, ASEAN, Korea and India, as proposed by the Commission, will not make much difference. It is unlikely that these agreements produce enough import pressure to bring about further substantial reform. All four partners provide vast markets for European industrial products and services and this could increase pressure to open the EU agricultural market in a way the actual CAP cannot cope with. But only MERCOSUR and ASEAN are major exporters of agricultural products. And even here bilateral negotiations provide more flexibility to contain the impact of tariff concessions than the WTO. However, the combined effect of free trade agreements with MERCOSUR and ASEAN may push the EU to further reduce the intervention price for cereals or abolish it altogether. Copyright The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2007.