European Policy Diffusion and the Politics of Regional Integration in the Pacific

Abstract

One of the major criticisms levelled at unilateral preference schemes is that they discourage ‘South-South’ trade by inhibiting local integration through encouraging preference-receiving firms to target exports at preferencegranting countries rather than regional trading partners (see Chapter 2). Accordingly, the promotion of regionalism and the furthering of ‘South-South’ trade are seen as vital components in cushioning the loss of preferences and smoothing the transition to reciprocal free trade. In the case of the EPAs — again the main focus of the chapter — the EU has arguably gone the furthest in this direction by introducing a so-called ‘regional preference’ clause by which the removal of intraregional trade barriers between ACP countries represented a precondition for the maintenances of trade privileges (albeit now on the basis of reciprocity). This mechanism can be traced back to the Cotonou Agreement, which linked the successful conclusion of WTO-compatible EPAs to creating and consolidating regional institutions in accordance with the regional configurations identified later by the European Commission. The general vagueness of Cotonou meant that, at the time, the precise means by which these two processes would be causally linked remained underspecified.