European Community Enlargement and Erosion of Preferences

Abstract

Hierarchical systems of bilaterally-negotiated preferences are apt to be unstable if they are too complex. In the early 1970s the European Community’s separate agreements for each Mediterranean partner which had varying terms and expiry dates created constant demands for adjustment and renegotiation. Any change in one agreement had implications for the degree of preferential treatment for all other partners. The problem was reduced by the adoption of the global Mediterranean policy, which simplified the hierarchy by granting all partners free access to Community markets for their manufactured exports. The issue of the degree of preferential treatment has, however, re-emerged during the 1980s since three of the Mediterranean countries are likely to become full Community members and, in this way, jump to the top of the preferential pyramid.