The Foreign Policies of the EN Towards the Less Developed Countries Post-1990

Topic: International Trade
Words: 8417 Pages: 28


The relationship between the European Union (EU) and the Less Developed Countries (LCDs) has reasonably increased over a period of time. LCDs are countries that are still in the process of developing. They have not experienced the full benefits enjoyed by fully developed countries. In other words, LCDs also fall under the category of developing countries. The EU faces its own internal issues including its role as a former emperor as well as keeping its influence on former colonies and maintaining a strong face toward the Chinese challenge. The union has a population bust of approximately 500 million people. It closely follows India and China. The strong influence of the EU has made it a powerful economic hub not just in continental Europe but also in the world at large. About 25 percent of the total global wealth is generated by the EU bearing in mind that it controls the lion’s share of the global trade particularly in Europe (Bretherton & Vogler 85). Hence, the strong influence has brought about a myriad of responsibilities for the union within and outside its borders. For some time now, the EU has been one of the notable providers of monetary assistance and technical advice to (LDCs. However, the contemporary delicate world order has thrashed the union into hard times in delivering its mandate to poor countries. Perhaps, this can offer a partial explanation as to why LDCs are yet to benefit from the EU trade agreements. The poor nations in Africa, Asia and the Pacific seem to be on the receiving end even as the EU purports to be offering its much-needed financial assistance to the poor countries. In terms of the green energy policy, the EU has been at the forefront of the proposals to reduce the challenge of global warming and associated greenhouse gas emissions.

At the beginning of the 21st century, the African Caribbean and Pacific Countries (ACP) alongside the European Union started a new partnership agreement with the aim of improving bilateral trade relations. Besides, there was a need to meet European concerns within the long-term goals that were earlier set by the two partners as part and parcel of improving their political dimensions and bilateral conduct. Although these were broad aims of the EU- LCDs relations, little has been achieved especially towards boosting trade dimensions in poor countries. It is also imperative to note that most of these countries still belong among the less developed and poor states.

In order to improve trade practices between the EU and the less developed countries, it is vital to eliminate or minimize trade barriers across various geographical settings. Currently, the European Union seems to be benefiting more than the partner states whose GDP growth is still far below par. Hence, there is a need to greatly emphasize consistency in terms of trade practices that are beneficial and profitable not just within the EU member state but also among the less developed countries.

This paper offers a detailed critical analysis and evaluation of the bilateral trade agreement between the European Union and the less developed countries in addition to discussing some of the prevailing challenges that the two partners have continued to experience in the past such as corruption, political instability, debt problem and worsening immigration policies. Besides, the paper offers a succinct analysis of three case studies namely Africa, South America and Asia. The argument portrayed in the paper is that ‘fair trade’ or ‘fairness’ has never existed between EU and LCDs partnership.

Literature review

As already mentioned the role played by the European Union in the global scene is enormous and cannot be refuted at any given time. Currently, the EU is the largest trading partner across the world with more than 20 percent of the total global trade being undertaken through its partnership. In addition, it is understood that most of the imports originate from the less developed countries although the economic benefit of the latter is still in question due to the prevailing poverty that has struck and continues to bite most of the ACP countries (Panagariya 309).

The European Union is also an influential member of the international monetary fund, World Bank and the World Trade Organization. These three bodies have been known to derail attempts by the third world to develop economically since the policies adopted by these monetary blocs were never in favor of the poor member countries.

There are innumerable concerns over the strategies advanced by the European Union alongside IMF and World Bank. These two sister organizations have quite often found themselves in different stages of crises occasioned by skewed policy guidelines that are not similar in all the countries being targeted for growth. In addition, the institutions are becoming even more vulnerable owing to the plummeting esteem and confidence from both the public and private sectors.

The financial turmoil that struck Asia and Russia was largely complicated by IMF and EU trade deals. To aggravate the situation, the manner in which both IMF and World Bank have conducted the famous structural adjustment program in less developed countries has left a lot to be desired. The credibility of the World Bank has also declined to bear in mind that this institution has persistently supported initiatives like that of EU trade partnerships that breach its own objectives rules and regulations

It is unfortunate that the officials running IMF, world bank and EU have been in closer working relationships by sharing similar policies that continue to derail growth prospects in poor countries. In fact, the so-called reforms that have been affected in the recent past are merely cosmetic. It is sincerely a system of emotional blackmail meant to maintain the status quo but not fundamental change among the less developed countries.

Economic globalization has also pulled down poverty indicators such as financial volatility, crime levels, and health care, degradation of the environment as well as employment and security in income. A recent report released by United Nations Development Program (UNDP) notes that the aforementioned poverty pointers have all gotten worse. Though unfortunate, the poor lot continues to bear the greatest brunt and loss.

The Breton Woods agenda is not a surprise either (Bretherton & Vogler 62). In revisiting the primary goal behind the formation of the European Union, poverty alleviation was never a featured agenda. The aims and objectives of these monetary institutions had a completely different schema contrary to what is known today by poor countries. The main aim was to create a vibrant and vigorous global economy that would sustain the local US economy by not just relying on domestic markets but also accessing overseas locations for raw materials and additional markets. To be sincere, the EU should not have assumed a capitalistic position by taking advantage of poor nations in disguise of poverty alleviation. The best way the EU would have acted as a responsible, accountable and transparent trading bloc is by ensuring that developed nations do not engage themselves in trade malpractices during periods of economic meltdown. For instance, the union should not promote trade barriers and restrictions such as high tax regimes or devaluating their currencies in order to curtail competition. IMF has been permitting developed economies to protect their domestic industries in times of financial crisis. As a supervisory body, IMF should be above the board by ensuring the liquidity and stability of currencies as part of promoting trade between the poor and rich nations.

On the same note, the inception of the World Bank was initially meant to advance loans to European nations that had been ravaged by war. The post-war period called for reconstruction, especially in energy and transport. The heavy investments in these areas demanded major funding which was later availed through World Bank. Later on, General Agreement on Tariffs and Trade (GATT) was formed to facilitate international trade with a focus on developed nations and not poor countries. Notwithstanding the evolving roles of the Breton Woods Institutions, their ever-arching purposes did not vanish away; they remained imperialistic and opportunistic leading to heavy losses by poorly established economies. The long-term impression and eventual reality behind the creation of the European Union was the privilege to set the agenda and influence global policies including trade. Consequently, the poor countries have been on the receiving end swallowing the bitter policies prescribed by IMF and World Bank under the pretext of reducing poverty levels.

The physical infrastructure in less developed countries is necessary before they can be fully integrated in the global economy. Unless this is perfected, resources will not be optimally exploited. In retrospect, this is one of the major roles of the World Bank but alongside with European Union. To that point, the EU was not originally meant to benefit weak nations economically EU (Pozuelo-Monfort 132). Hence, World Bank advanced loans for the reconstruction of physical facilities such as roads, rails, ports and oil pipelines. Although a significant amount of revenue is generated through foreign direct investments and interests on loans advanced, the proceeds hardly reach the poor lot. In most cases, people are often displaced from their areas of residence; they suffer from the impacts of environmental degradation and are rarely compensated for associated losses.

Finally, the reform of structural adjustment programs proposed by the European Union is yet another hiccup in less developed countries. The Union has devised a culture of advancing loans to debt-ridden countries with tough conditions For instance; poor countries that have no other option to bail themselves out of financial crisis often end up bowing too low and injecting reforms in their domestic systems and structures. As a result, the European Union is in a position to access new markets easily or even import cheap raw materials to the detriment of poor countries. Furthermore, governments in these poor countries often find themselves in the predicament of being manipulated at will, while massive public overheads are used to service foreign debt. This is not only a colonial policy, it is also a strategy of ensuring that developing and underdeveloped countries remain economic slaves of the international trading blocs like the European Union.

As the world trade organization and the EU continue to foster trade relationships not just within Europe but also among the ACP countries, it is vital to reiterate that poor countries are making heavy attempts to pull themselves out of abject poverty with minimal success.

The European Union has been known to step up its various political and economical elements within the global arena. For a long time now, the union has also been a fundamental source of foreign aid to poor and underdeveloped countries. However, the latest records reveal that foreign aid has continually decreased over the years leading to more suffering in the less developed countries that have developed the dependency syndrome over the years.

The union is expected to bridge the economic gap between poor states and developed countries Nonetheless, the current development policies of the EU may not allow it to direct its positive efforts in poor countries in an attempt to bail them out of the economic mess. Unless the right policies are adopted by the union, it will be extremely difficult to reduce poverty, especially among countries whose economies are still lagging behind. Furthermore, the basic motivation of the European Union does not entirely focus on the development needs of ACP countries. Much of the interest of the union is believed to be subjective and biased.

In order to raise the development pace between European Union and the less developed countries, they are quite a number of challenges that need to be addressed by the union in each capacity has an international community as well as a vibrant trading block. To begin with, peace and stability need to be addressed once and for all. Most of the less developed countries are often in a state of continual political challenges. This has marginalized the poor countries in terms of economic growth since foreign investors find it quite cumbersome to invest in politically volatile regions.The tendency for these countries to be marginalized has been multiplied by the fact that the EU member states derive more benefits by obtaining cheap imports from the less developed countries while at the same time they sell back either expensive merchandise or those that are low quality compared to the local products. This has significantly created unfair competition in the local markets.

For sustainable bilateral trade practices, any form of cooperation must attempt to preserve and adhere to rule of law in any country where trade partnerships exist. The overall impression should be that of social cohesion and improved satisfaction level among countries that are in partnership. In addition, the European Union should manage global threats like those emanating from terrorism. Unless such threats are brought to the most minimal level, it will be difficult for trade partnerships to take place in a cohesive and more inclusive manner (Bourdet, Gullstrand & Olofsdotter 211). Moreover, the migratory pressure being experienced in Europe is a result of the union’s failure to address development disparities in the less developed world. In fact, illicit trafficking alongside the spread of terrorism has fundamentally hampered any trade integration processes between the EU and countries that are perceived to be less developed.

Research methodology

The aim is to analyze and argue the foreign relation of the EU toward the developing countries and its role as an economic giant. The research methodology for this dissertation is divided into theoretical and economic analysis.

Data analysis

The argument that the European Union has continued to benefit the less developed countries has not been taken kindly by some economic critics. There are myriad challenges being experienced by the union that will continue to make its operations difficult. For example, it is upon the union to stand up in solidarity, especially in the fight against poverty, and political instabilities, occasioned by immature democracies as well as political and social rights.

The next most daring challenge being faced by the union is the right strategy to adopt in fostering economic development and mutual interest not just within the EU member states but also among the purported trade partners located in the ACP countries.These poor nations need to be assisted to develop their own internal capacities that will create a viable environment for business. Besides, the internal capacities that are well enhanced will enable the less developed countries to secure basic infrastructure that will not only bring them into a standard platform with the developed world but also promote their smooth integration into the global economy. Indeed, the less developed countries including those located in the ACP region might enjoy equal benefits as the developed countries within the foreseeable future. Furthermore, the social aspects of development heavily rely on the nature of the business environment that has been set up both by the European Union and the partnering countries EU (Pozuelo-Monfort 33).

In any case, unless respect for human rights, as well as the right integration procedures, are brought on board, it will be close to impossible to strike a fair trade balance between the EU and LCDs. In order to attain this, European Union should focus on the major factors that destroy or interfere with natural resources. Clear guidelines should be devised by the union as part of the process of reducing environmental constraints that hamper bilateral trade practices. This will also go in line with the green energy policy that the European Union as well as the other international communities has been targeting. However, the politics surrounding the green energy policy are widespread and have been conjugated with the need for some developed countries to maintain their status of accelerating economic progress at the expense of poor member countries in Africa, the Caribbean and the Pacific regions. Furthermore, the outlined objectives of the European Union especially those targeting poor countries ought to be followed to the letter if any social development is to be realized. The disparity in terms of economic growth should be a thing of the past and not embraced by the EU at all costs (Pozuelo-Monfort 78).

It is paramount to safeguard a sound economic culture between the European Union and the poor or less developed countries. Although the EU pioneered this trading bloc, there is little to cherish among the poor nations since much of the resources imported from poor countries go towards benefiting the rich EU member states that are already enjoying vibrant economies (Panagariya 299). The relationship that should be enjoyed by EU member states should not differ largely from those being enjoyed by the less developed countries if a fair trade deal is to exist. It is against this backdrop that the EU-LCDs relationship should be based on creating strengths rather than weaknesses and which can only be achieved where there is mutual dedication among the trading partners.

The Rome Convention also brought about several hiccups that hindered trade since the principle of equal partnership did not put into consideration the trade welfare of the poor countries. Besides, this convention was mainly meant to address the bilateral business partnerships among like-minded European countries but not poor countries. When the latter entered the partnership, their major goal was to derive benefits resulting from foreign aid and grants. This has accelerated the degree of dependency among the poor states since they can hardly build strong economies and boost their GDP growth using local resources per se. It is vital to emphasize that although the European Union has failed to impact the less developed countries in terms of economic growth, the partnership is still one of the most viable channels through which different countries across the globe can improve their economic status is by practicing fair trend as a result of sound comparative advantage. For this reason, the current policy guidelines being used by the EU should be overhauled or restructured altogether in order to pave way for effective trade practices. It is upon the union to come up with different options that will usher in flexibility by adopting differential approaches toward creating an environment worth doing business in.

Owing to the numerous challenges faced by LCDs, there are steps that have been taken to preserve their unique identities in order to remain vibrant in cooperation. For instance, the poor states have maintained their contractual nature which is also part of their partnership agreement with the EU. It is crucial for a more mutual political engagement to be embraced in the EU trade relations with the less developed countries. In simple terms, there is a need to revitalize the manner in which the contractual agreement is being implemented. Moreover, there are two major political implications that the European Union should adhere to (Pozuelo-Monfort 165). First respect for human rights should be at the forefront and any infringement of the Rome Convention that deals with any EU-LCD trade agreement should be scrapped or suspended away altogether. Furthermore, good governance alongside the practice of the rule of law must be enhanced. These political requirements may not be realized if the right consultation procedures as outlined in the EU partnership are not adhered to.

Community policy which is in line with the general framework of human rights prevention has largely been absent in most third world countries and it’s upon the European Union to embrace a culture of care so that LCDs may have a favorable business environment. Although the current view as held by the European Union appears to be coherent, there is a lack of comprehensive implementation of policy guidelines, especially those governing the poor states. For this reason, there are quite a number of questions that are left unanswered especially if EU cooperation was to be suspended in third world countries.

In light of the increasing political instability in some regions especially in sub-Saharan Africa, management of the cooperation is becoming even more challenging by the day. There are numerous armed conflicts and the use of small arms that have greatly endangered human life alongside scaring away investors. Fortunate enough, the European Union has attempted to put up measures aimed at curtailing the growing insecure environment in most less developed countries.

The content of the European conflict prevention and settlement policy has outlined several policy guidelines that cover matters such as diplomacy and broader political and economic cooperation with poor countries (Panagariya 331). However, there is still minimal political goodwill among the EU member states that have witnessed insignificant growth towards reducing political tension in the less developed world where armed conflicts appear to be the order of the day. Even the comprehensive strategy proposed by the union does not fully address some of the fundamental principles and procedures that will be put in place as part of intervening against political developments in poor countries. Further still, structural stability has not been embraced at all in spite of the claims by the European is pertinent for the union to understand that sustainable political development is a direct function of how well structural stability has been put in place. In fact, most poor countries that often engage in political conflicts are often triggered to do so by the prevailing dilapidated state of affairs surrounding social life. In this regard, abject poverty, poor governance, grand corruption as well as inaction by the European Union have by far and wide contributed to the crisis. How can the European Union remain steadfast and brag as a global partner in international trade whereas its close partners from the less developed countries are suffering from the heavy debt burden and hardly benefiting from the bilateral partnership?

The role played by the public sector as an instrument of managing public affairs cannot be ignored either. Most LDCs that are also poorly developed lack the institutional capacity that can engineer international trade with European Union. Besides the declining political stability in these countries, institutional frameworks have worsened the situation, a phenomenon being celebrated by the competing EU member states. The overall argument here is that both partners namely the less developed countries and the European Union are equal competitors in the market and hence the debate on fair deals does not exist.

The Rome Convention may be used as a model for ensuring that human rights are respected to the letter in spite of the prevailing trade between different blocs. In the event that such rights are not adhered to, the policy guidelines should be reviewed. For example, anti-dumping legislation should be enacted in order to avoid cheap imports in less developed countries (Brown 764).

This is a form of human rights violation that is not consistent with the Rome convention on fair trade practices.

Recommendations and case studies

As it stands now; it appears that the first phase of the Africa-European Union re-arrangement is through. Towards the close of 2007, the Interim Economic Partnership agreements (IEPAs) were appended by the African countries that were already in partnership with European Union. This came at a time when the World Trade Organisation made every attempt to waive access to a preferential market of the previous colonies of the European Union member states. The interim trade agreement was signed by approximately 50 percent of the ACP countries. It is however surprising that quite a significant number of the Least Developed Countries were left out in the pact whereas they dearly deserved to be inclusive to boost their economic growth (Brown 772). As can be noted from afar, this appeared to be a deliberate plan to leave extremely poor African nations out of the trade agreement. This implies that the less developed countries that are not part of the agreement cannot access the European Union markets duty-free. This has economically jeopardized GDP growth in these poor countries since they have minimal channels through which they can expand their trading volume. It is also questionable why there are differential agreements between the EU and individual African countries that are signatories to the pact.

Nonetheless, even those African countries that became part of the trade deal are still skeptical about whether they will be in a position to implement all the policy guidelines as outlined in the agreement. Definitely, there may be political and administrative hiccups that may strangle the anticipated benefits of the trade agreement. As a result, the embroiled African countries may not enjoy the full benefits of accessing the European Union markets in spite of the duty-free factor. It is imperative to note that these hurdles are already eminent in the first phase and also highly likely that the next phase of the agreement may be full of flaws to the detriment of partnering African countries. The expectation is that trade-related rules will be the subject of discussion in the next phase. Under these rules, issues surrounding intellectual property as well as investment plans will be deliberated upon. The agenda is apparently appropriate for the African region. However, there are myriad humpbacks to go through in the host environment making it extremely difficult for African states to explore the EU markets. Moreover, wholesale importation as per the high standards of the European Union member states may not be easily met by most African countries under the agreement(Panagariya 293). These are some of the pre-conditions that have continued to lock out African countries from the EU trading net. Consequently, the earlier trust bestowed to European Union has declined considerably.

Access to the markets

The ability to access the European Union markets with much ease remains to be elusive among most African countries. as already noted, there are myriad pre-conditions for African countries to European Union on African countries. In any case, most of these Less Developed Countries (LCDs) in Africa had been greatly motivated by the fact that they will easily access the European Union markets with minimal barriers. Prior to the signing of the interim trade agreement, investment benefits, as well as the volume of trade, were not even the major considerations by the African member states to the European Union agreement. The current status of market access is not quite secure for some African countries. Furthermore, the entry of the European Union exports into IEPA member countries is anticipated to bring forth other trade anomalies such as unfavorable competition, and diversion of trade in addition to disruption in concomitant trade. These are worrying outcomes for African countries that are at high gear and embracing themselves for positive returns.

Moreover, there is a higher possibility of declining revenues for countries that rely on import taxes as their main source of foreign exchange-earners. In fact, this is the very reason why there have been global campaigns against the inclusion of less developed countries in trade pacts with the European Union whereas the former does not benefit much. The anti-EPA campaigns might as well be right bearing in mind that the trade prospects of some of the poor nations in Africa with the European Union are not impressive. Essentially, the main cause of concern is that the unfavorable and unfair competition that will be brought about by external competition from European Union products will definitely lead to the crumbling down of some of the infant domestic industries over and above loss of cash by weak African economies. If this trend will be anything to go by, the probability of reversing economic gains that have been achieved in Africa over the recent years may be real. These fears are not just being imagined, they are indeed legitimate. It is a paramount idea to offset such fears owing to the fact that the preferential treatment of the European Union member states even as they enter into trade agreements with the less developed countries is a crisis in waiting. Presumably, it sounds like negotiators on the side of Africans have bowed down to the demands of the European Union. They are now opting for alternative ways of gee rating revenue owing to the fact that the European Union partnership is more of a wasteful venture than a profitable deal. Currently, some African member countries under the European Union partnerships are already undertaking adjustment costs programs so that they can remain strong in the highly competitive market. This is being done irrespective of the massive suffering of the poor masses in the affected countries. No wonder, poverty may continue to bite for as long as the undesirable trade practices are not suspended or eliminated in totality.

Furthermore, the argument that consumers will benefit from the cheap imports emanating from the European Union does not hold water either. Better still, even producers who depend heavily on goods imported from the European Union region are merely a handful. Most domestic economies in African countries are largely driven by how well the local industries are supported. Cheap imports from the EU are quite injurious to most local producers in poor countries in Africa.

Economic fissures

The trade agreements under the IEPA deal are also likely to leave fatal impacts on most domestic economies in African countries. The regional economic integration was further weakened by the IEPA deal(Bourdet, Gullstrand & Olofsdotter 174). To prove this fact, it is widely understood that most countries that singly signed the IEPA deal fractured after a short while apart from the East African Community which entered the agreement as a trading bloc. In any case, there were quite a number of other regional groupings that collapsed due to the unfavorable terms of the agreement(Sapir 730). Perhaps, the claim that the European Union clearly differentiated between the less developed countries and those that are doing well economically may have been a misplacement of facts altogether. Such trends are worrying. There are some countries within the regional trading blocs that have the liberty to admit exports from the European Union into their domestic markets. To some extent, this may not promise any significant growth in Sub-Saharan African economies since such trade liberty may hamper the economic growth of countries that do not allow cheap imports into the economies. It is natural for consumers to prefer the low-end market, even if the deal is fair in the bordering countries.

Tackling future Africa-EU challenges

As an international trading bloc, the European Union itself is not void of internal tensions. For instance, the emergence of China as an equal rival is indeed sending fear across the spine of the European Union. Besides, the former colonial masters are also steadfast in maintaining their presence and influence on the former colonies. in addition, there are those member countries within the EU establishment that are in a continual attempt to cast their nets further into some targeted African countries so that they can tap the unexploited resources to the optimum. These are conflicting interests and possibly growing conflicts within the European Union member states that may eventually exacerbate the worsening trade relations between EU and African countries (Bourdet, Gullstrand & Olofsdotter 78). Worse still, there are other members who have emerged with unique business strategies whereby they believe that when access to their markets is restricted through the imposition of barriers, then they are likely to develop. This is common for some new members who do not profess or comply fully with the earlier policy guidelines when the European Union was being formed.

From this background, we can clearly deduce that Africa-European Union relations especially in the near future may be quite demanding. The rate at which the relationship between the two partners is deteriorating is alarming (Brown 763). For economic analysts, the right business environment is yet to be set if any meaningful international partnership is to bear fruits. Such events are only opening up wider opportunities for China since she is the next most likely beneficiary of the undoing of the European Union.

Asia Case study

The Asian continent has been a long-term target for European Union over a possible trade partnership. A case study of Korea reveals a lot. A free trade agreement (FTA) signed between Korea and the European Union in 2009 may have had very little impact on either side since none of the prospective trade partners had the interest of the other at heart. One area of consideration is the basic security concerns for either Korea or the European Union. It is factual and well expected that the security issues facing Korea may never be resolved by the European Union at all costs (Sapir 724). The Union has been non-committal on matters of security in most less developed countries and it is not just about to do that. Further, soft power as preferred by the European Union has never been a shared ideal by Korea. Whereas the European Union values collective security, Korea is hardly into it. The principle of cost-free-prestige-taking is phenomenal in Korean practice, this being a totally contrary application of the European Union (Panagariya 287).

To the union, this will likely appear as an attempt by Asia to apply and embrace liberal democratic values within the non-Asian context. Such divergent ideals between Korea and the European Union are a vivid indicator that the two partners can hardly fair well, especially where mutual partnerships are required for international trade to blossom. In other words, the bilateral relationship between this Asian country and the European Union was launched on barren hopes since they grossly lack compatibility to act as partners. In this respect, it is quite evident that the European Union has no power projection in the Asian continent. The union can hardly assert its ideals in Asia, making it cumbersome to conduct common trading. The scenario was first noticed way back when the British lost its authority in the eastern part of Suez following a full-blown retrenchment. On the same note, China and most parts of Asia cannot be easily deterred by the European Union bearing in mind that the emergence of China as an economic giant in Asia is a real threat to the future growth of the EU.

Similarly, the European Union has a very limited or no role at all in the Agreed Framework that was once established to cater to the proliferation of security initiatives. The enormous issues surrounding security issues of the European Union are not an important business to Asia either. For example, the growing global concern over the threat of internal terrorism, the course is taken by Russia as well as the Middle East political quagmire are just some of the EU concerns that, as anticipated, do not significantly bother Asia. None of the partners (Korea and EU) may share a common ground in creating a liberal security community even though they have the capacity to do so. Interestingly, the relationship between the two partners seems to generate prestige from either side. It is like they have put each other on a weighing balance; similar to a war of words and inaction. Nevertheless, much of the perceived benefits are being accrued by Korea bearing in mind that she has not been a global economy until recently when she started making an economic landmark in Asia. A critical look at this bilateral relationship offers an insight into some form of flattery for Korea; she imagines being in the same economic and political share with other global leaders like the European Union and the United States.

On the other hand, China is still reluctant to fully comply with the regulations of the World Trade organization that are in line with the European Union policy guidelines on bilateral and multilateral trade partnerships (Sapir 717). Hence, the bigger picture of the Asian continent’s partnership with the European Union among other trading blocks in the western countries is that of suspicion and mistrust. It is some form of unending economic and political struggle between the growing East and the prosperous West. In fact, recent development has witnessed the adoption of some stringent and more robust policies aimed at pushing China to concede to the demands of the Western trading blocs like the European Union.

The relationship between the European Union and Korea is apparently unremarkable. The fact that none of them value the security importance of each other is a vivid illustration that no formidable alliance can exist between them. Although FTA is a step in the right direction, it is only beneficial based on material utility, ignoring a host of other issues that are pertinent in any trading partnership.

South America case study

As of 2007, the European Union was the largest and most integral trading partner of South America. Both Chile and Marcos were equally enjoying the partnership by this time. Within a ten-year period between 1999 and 2008, the trade figures between these two partners had increased by more than one hundred percent. The more than 400 million inhabitants of South America are believed to be real-time beneficiaries of this bilateral trade. In addition, much of the foreign direct investment for South America emanates from the European Union. This heavy investment by South America is believed to have accelerated economic growth in the once poor member countries.

The partnerships and agreements that led up to the robust trade relations between South America and European can only be given a historical perspective. There are myriad regional agreements that had already been enacted by respective countries in South America that later ushered in a broader approach to trade with international blocs like the EU (Pozuelo-Monfort 186).

Although the South American-European Union trade relations appear to be without flaws, a lot has already happened since the enactment of the Treaty of Rome which saw the integration of African Caribbean and Pacific states into global trade.

To begin with, the 2008 Peru Summit sought to address various political concerns affecting both partners and which would hinder trade in one way or another. Besides, the modes of improving the strategic partnership between the two partners were deliberated. Sincerely speaking, the Peru Summit would not have come at a time when both partners were enjoying full returns of their cooperation. As noted in the African and Asian case studies, politics remained a central concern for the south America-European trade partnerships (Brown 758). In spite of the Summit, innumerable challenges still face and continue to thwart trade relations between the union and South America.

The inability of the European Union to fully address hurdles such as poverty, sustainable development and sound green energy policies has led to malpractices in bilateral relations. Definitely, south America is yet to realize the full potential and returns of its trading partnership with the European Union. Major development strides are yet to be made in line with energy and full inclusion in the partnership agreements. The Madrid Summit held in 2010 was yet another follow-up meeting between the European Union and South America aimed at ironing out their salient partnership differences. Another similar summit comprising foreign affairs ministers was held shortly in a bid to create a fertile ground for partnership.

The much-needed redress of the Free Trade Agreement had not been concluded even at the end of the two sister meetings (European Commission, par 7). To date, South America is still in dire need of boosting its economic profile while the European Union flourishes. If the partnership was anything to admire, then South America would have been a step ahead. Moreover, the growing poverty index is a clear indication that the partnership is not a two-way benefit.

The partnership agreements should focus on other fields over and above the ones mentioned before. In other words, other forms of collaboration are necessary instead of relying on the conventional accepted modes of cooperation. Since the poor countries do not have the full capacity as well as the ability to seek alternative solutions or better ways of cooperation, it is upon the European Union to propose multiple ranges of collaborative areas and instruments

When dealing with poverty alleviation, the social and economic frameworks are essential(Bretherton & Vogler 105). The EU’s cooperation with the less developed countries is a typical example. There is quite a number of poor countries whose social and economic powers have not been strengthened. The European Union has continually engaged in trade practices with poor nations in disregard of the social and economic needs that are direct contributors to abject poverty.


As noted earlier, the only way through which the European Union and the less developed countries can improve bilateral trade relations is by instituting policy guidelines that are consistent with the partnering agreement. Firstly, there is a need for a mutual political commitment between the EU member states and the poor countries located in the ACP regions. A case example is sub-Saharan Africa where the lack of political commitment by both the poor states as well as the EU has led to declining socio-economic development. In relation to this, there is a need for radical transformations both in the political and social settings in the less developed world if any trade agreements especially with the European Union will be beneficial to both partners.

Although the European Union has been termed as a committed trading bloc toward the restructuring process of economic policies, the impact of its commitment is yet to be realized. From the experience gained in previous bilateral trade collaborations, it has been found that the partnering agreement between European Union and the less developed countries can largely be strengthened by meeting the basic political conditions. Unfortunately, the European Union has proved to be non-committal in the process of ensuring that the poor states enjoy the benefits of bilateral trade. Moreover, the social-economic analysis is equally important if the EU will have to excise fair trade with its partners in the Africa Caribbean and Pacific countries.

Therefore it is pertinent for the European Union to seek a stronger political relationship with LDCs since the past strategies adopted by the union have not worked or yielded any significant results. It is also absolutely necessary if the process of democratization in the less developed countries will be given a top priority since ignoring the latter will give due advantage to European member states. The current state of affairs does not give room for political dialogue in war-torn countries. Giving political dialogue a priority is indeed necessary since it will shape the degree or level of cooperation desired by the partners. In line with this, bilateral trade cooperation should be understood as an integral component of long-term political stability in less developed regions. The EU member states seem to be taking advantage or are opportunistic enough even as they participate in the so-called “fair trade” with poor countries. In a nutshell, strengthening political dimensions in poor countries that are still struggling with growing democracies is apparently the best way forward to ensuring that there is a common platform where fair trade can be practiced.

The most important channel through which the less developed countries can open up their markets is by transforming the various cooperative frameworks in bilateral trade practices. First, differentiation is paramount in the sense that adjustment can be made based on one case study to another since each of the less developed countries has a unique social-political and economic scenario that needs to be addressed differently. It is worthy to literate that not all poor countries who are also members of the European Union can meet the political standards and economic platform set up by the union. This is one area in which the EU has persistently frustrated the efforts by some poor nations to fully participate and enjoy the accrued benefits of international trade. It is essential to enact differentiated collaboration policies that are tailored toward the specific needs of poor countries. Therefore, certain reciprocal rights are fundamental when differentiating unique needs.

Secondly, the policy dialogue should be stepped up. The less developed countries and their partners ought to look up ways and means of making sure that certain requirements are reconciled accordingly. For example, the recipient countries must be analyzed in terms of trade volume, policy requirements when entering the partnership as well as the net return on the volume of exports and imports (Bourdet, Gullstrand & Olofsdotter 63).

Another unforgettable priority is that the European Union should endeavor to commit itself to the process of formulating, adopting and implementing various development strategies that are in line with less developed countries. Nonetheless, this will only be possible if the local capacity among countries that are not favored with the bilateral trade is improved. This implies that effective dialogue is crucial since it will provide a stage through which the progress of each individual country is monitored.

Works Cited

Bourdet Yves, Gullstrand, Joakim & Olofsdotter, Karin. The European Union: trade, aid and growth in an integrating world, Edward Elgar Publishing, Cheltenham: Edward Elgar Publishing Ltd, 2007.

Bretherton, Charlotte & Vogler, John. The European Union as a global actor, New York: Routledge, 2006.

Brown, Drusilla K. “Trade and Welfare Effects of the European Schemes of the Generalized System of Preferences,” Economic Development and Cultural Change, 37 (2003): 757-776.

European Commission. Bilateral relations and statistics. 2011. Web.

Panagariya, Arvind. “Preferential Trade Liberalization: The Traditional Theory and New Developments,” Journal of Economic Literature 38(2000): 287-331.

Pozuelo-Monfort, Jaime. The Monfort Plan: The New Architecture of Capitalism, Hoboken: John Wiley and Sons, 2010.

Sapir, Andre. “The Political Economy of EC Regionalism” European Economic Review, 42 (1998): 717-732.

The Foreign Policies of the EN Towards the Less Developed Countries Post-1990

The Foreign Policies of the EN Towards the Less Developed Countries Post-1990

The Foreign Policies of the EN Towards the Less Developed Countries Post-1990

The Foreign Policies of the EN Towards the Less Developed Countries Post-1990

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