LDC Primary Exports to the EC: Prospects Post-1992

Journal of Common Market Studies 0021-9886 $3.00

Volume XXIX. No. 2 December 1990

LDC Primary Exports to the EC: Prospects Post- 1992

A L A N MATTHEWS and DERMOT MCALEESE

Trinity College, Dublin *

1. Introduction Interest in the external trade effects of 1992, and particularly in the possible consequences for developing countries, has to date focused mainly on manufactures. Yet primary commodities still dominate developing country exports to the Community, accounting for about two- thirds of the total. Within that category, fuels are the largest component (54 per cent) followed by food (30 per cent), raw materials (8 per cent), ores and minerals (5 per cent) and non-ferrous metals ( 3 per cent) (Table 1). The developing countries’ dependence on the EC market, measured as the proportion of their exports of any product consigned to the Com- munity, fluctuates within the range 31 per cent (fuels) to 40 per cent (ores). Their level of dependence has been falling over time, although it would be wrong to assume this necessarily implies a more restrictive policy towards imports. It partly reflects the more rapid growth of non-EC markets, particularly in the Pacific rim, while another factor has been the greater degree of self-sufficiency of the Community in energy supplies.

Primary products are a major source of export revenue for developing countries, but they are also of vital importance to the Community which is not regarded as a particularly resource-rich region. Using the ratio of imports to apparent consumption as a measure of import dependence, the Community relies on developing countries for 18 per cent of its primary product supplies (Table 2). This ratio has fallen from 28 per cent in 1981-2, attributable mainly to the decline in exports from the 21 major petroleum *This article benefited from the comments of A. Sapir and other participants at the Expert Meeting on ‘Europe 1992 and the Developing Countries’.

158 A. MATTHEWS AND D. MCALEESE

Table 1 : Developing Areas Exports to the E C, I986

Exports to EC Exports to all Exports to EC as areas % exports to all

areas US$bn (%) US$bn (%) (%I

Food 23.10 31 67.35 30 34 Raw materials 4.96 7 14.75 7 34 Ores and other

minerals 3.99 5 9.90 4 40 Fuels 39.56 53 129.20 57 31 Non-ferrous metals 2.64 4 7.4s 3 35

Total Primary 74.25 100 228.65 100 33

Source: GATT, International Trade 1987-88, Table AAlO Note: Because of differences in scope and definition, these figures are significantly different from those in Table 3 for EC imports from developing countries

exporters. A small increase has occurred in the case of other primary product exporters; their share of apparent consumption has risen from 6.3 per cent in 1981-2 to 7.0 per cent in 1985-6. In terms of dependence on developing countries, the Community occupies an intermediate position between Japan and the United States.

Table 2 : Imports from Developing Countries as a Percentage of Apparent Consumption

E C North America Japan 81182 85/86 81/82 85186 81182 85/86 (%) (%) (%I (%) ("/.I

Primary products 28.1 18.2 19.0 11.8 47.0 33.9 of which: 21 major oil exporters 21.8 11.2 15.7 8.2 39.3 24.4 Other 6.3 7.0 3.3 3.6 7.7 9.5

Manufactured goods 2.6 2.8 2.5 3.4 1.6 1.4

Source: U NCTAD Handbook of International Trade and Developmeni Statistics (1988) Note: Food, drink and tobacco (2 per cent of apparent consumption) is included in manufacturing; apparent consumption equals domestic production less exports plus imports

Although not shown in Table 2, considerable fluctuations in the import penetration ratio occur as between different primary products. Develop- ing countries account for 30 per cent of the Community's supplies of crude petroleum, coal and gas; 9 per cent of agricultural supplies and only 2 per cent of food, drink and tobacco. However, for commodities such as

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 159

copper, tea, cocoa, etc., imports from developing countries are virtually the only source of supply.

Details of E C imports from developing countries at Standard Inter- national Trade Classification (SITC) division level are shown in Table 3 (due to different sources, there are some discrepancies between these data and the previous tables such as the inclusion of South Africa and the exclusion of Oceania developing countries). The Community on this definition imported US$84bn of primary commodities from the LDCs in 1987. Of this, US$34bn or 41 per cent came from Africa, reflecting the strong historical trade ties with that continent. Next in importance are Latin AmericalCaribbean and the Far East. It is worth noting that only one-half (51 per cent) of the Community’s primary product imports are of LDC origin. North America, EFTA and the Comecon countries are also important sources of supply.

Table 3: EC Imports from Developing Countries, US$m 1987

Africa Latin Middle Far East Total Total all Share America & East LDCs areas LDCs Caribbean (%)

~

00 Live animals 01 Meat and meat

products 02 Dairy products 03 Fish 04 Cereals 05 Vegetables and fruit 06 Sugar 07 Coffee. tea, cocoa 08 Feeding stuffs

for animals 09 Miscellaneous food

products Total SITC 0

Beverages and tobacco I 1 Beverages 12 Tobacco and tobacco

Total SITC 1

Crude materials 21 Hides and skins 22 Oil seeds 23 Crude rubber 24 Cork and wood 25 Pulp, waste paper 26 Textile fibres -

cotton. jute. etc.

products

1.3

104.2 4.6

885.9 81.4

1,513.8 629. 1

3,656.8

145.4

5.4 6,916.9

33.4

330.3 363.7

199.3 50.3

140.4 939.2 100.9

702.7

4.6

901.6 0.1

925.6 154.6

2.378.6 390.7

2.979.9

2,077.3

30.4 9,843.4

130.6

471.6 602.2

30.8 952.3 30.7

180.9 249.6

340.6

1 .0

26.9 6.6

33.9 35.7

4.7 6.7

2.2

46.8 889.3

724. 8

3.0

0.8 3.8

140.2 11.9 0.3 0.6 0.4

154.9

0.1 7.0 677.8

55.9 1.088.6 2.904.5 1.2 12.5 789.8

767.7 2,613.1 5,781.7 113.5 385.2 1,592.9

1,688.5 6,305.7 9,290.0 115.3 1,139.8 1.477.0 826.8 7,359.2 7.768.4

526.5 2,751.4 4,698.2

39.3 121.9 385.3 4,134.8 21.784.4 35,335.6

7.8 174.8 484.0

224.2 1,026.9 2,046.7 232.0 1,201.7 2,530.7

78.8 449.1 2,000.9 116.9 1,131.4 3,755.1 776.2 947.6 1.361.1 947.4 2,068.1 7,226.5

5.7 356.6 5,170.8

1 .o

37.5 1.6

45.2 24.2 67.9 78.8 94.7

58.6

31.6 61.7

36.1

50.2 47.5

22.4 30. I 69.6 28.6 6.9

750.9 1,949.1 4,808.6 40.5


27 Fertilizers 664.3 28 Ores and scrap 1,506.1 29 Materials n.e.s. 251.7 Total SITC 2 4,554.9

Mineral fuels and related materials 32 Coal and coke 518.0 33 Petroleum 16,678.7 34 Gas 2,527.7 Total SITC 3 19,724.4

Animal and vegetable oil and fats

41 Animal oildfats 4.6 42 Vegetable oil/fats 17.3 43 Oils and fats

processed 2.7 Total SITC 4 181.6

67 Iron and steel 555.7 68 Non-ferrous metals 1,671.2

Total primary products 33,968.4

116.9 131.7 2,055.4 46.1

198.7 183.1 4.155.9 669.2

67.8 0.0 3,785.8 18,748.3

2.1 216.1 3,855.7 18,964.4

19.6 0.2 98.9 1.5

14.9 0.2 133.4 1.9

419.1 4.8 1,191.8 74.3

20,201.5 20,607.7

129.6 1,042.5 2,400.4 181.5 3,789.1 8,073.7 412.6 1,046.1 1,817.5

3,399.6 12,779.6 36,614.6

63.8 649.6 4,048.3 75.1 39,287.9 57,091.4 0.0 2,745.9 9.845.5

138.9 42,683.4 70,985.2

0.4 24.8 247.1 529.6 804.3 971.6

68.8 86.6 132.6 598.8 915.7 1,351.3

196.4 1,176.0 7,171.3 246.6 3,183.9 9,019.1

8,947.1 83,724.7 163,007.8

43.4 46.9 57.6 34.9

16.0 68.8 27.9 60.1

10.0 82.8

65.3 67.8

16.4 35.3

51.4

Source: OECD, Foreign Trade by Commodiiies, Series C (1987)

Developing country primary exporters are very sensitive to external changes which might further reduce market returns. Hence the importance of considering the effects of 1992. These effects must be seen in the context of the severe terms of trade losses of some developing countries in recent years. The US$ price index of primary commodities (1980 = 100) had fallen to 90 by the first quarter of 1989; of food to 90; tropical beverages to 75; and fuels to 59 ( U N Monthly Bulletin of Statistics).

The purpose of this article is to evaluate the effects of 1992 on developing country primary product exports. The a priori effects, both positive and negative, of the 1992 programme are outlined in Section 2. Section 3 provides a preliminary analysis of the impact of 1992-stimulated faster EC growth. It also contains a general discussion of how 1992 might affect the import pattern of different E C Member States. The effects of removing explicit and implicit import restrictions on specific products are discussed in Section 4. Section 5 considers the implications of 1992 for the Common Agricultural Policy (CAP), and emphasizes the way future agrimonetary arrangements may affect developing country exports. Our findings are summarized in Section 6.

2. Effects of 1992 - Overview of the Issues Although the transitional period for all save two members of the European Community has long passed, the markets of the individual Member States

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 161 remain imperfectly integrated. Market segmentation has persisted because of national restrictions on imports; differences in national standards concerning technical, environmental, health and safety regulations; discriminatory public procurement practices; time-consuming frontier controls and regulatory restrictions on market entry and competition. The purpose of the Single Market programme is to eliminate these barriers to intra-Community trade and to provide for the free movement of goods, persons, services and capital within the Community.

Among the many measures associated with the creation of the Single Market, those most likely to have an impact on primary products are (1) the elimination of national national trade restrictions (including monetary compensatory amounts (MCAs) applied to agricultural trade); (2) the removal of technical barriers to trade and (3) fiscal approximation. The stimulus given to E C growth by the Single Market programme will also have a major impact on the Community's trade.

Some aspects of 1992 are likely to be export-enhancing for developing country suppliers. First, an increase in Community GDP of 4.5 per cent-7 per cent (relative to what it would otherwise be) will raise demand for primary product imports. 1 Second, the elimination of technical barriers and national restrictions to intra-Community trade can also have trade- creating effects for third countries. After 1992, once a product has been legally imported into one Member State and meets its requirements, it can circulate freely throughout the Community. This greater transparency of the Community market should make it easier for third countries, including developing countries, to develop new markets within the Community and to benefit from any economies involved in producing and shipping larger volumes. Third, the removal of excise taxes on some primary commodities (e.g. coffee in Germany and Denmark) would, if put into effect, increase demand for these products.

Other elements in the 1992 programme will have primarily export redistribution effects, i.e. will involve substitution of one developing country supplier for another. First, the removal of national restrictions involving preferences for certain groups of LDCs will clearly have this effect. In the case of banana imports, for example, completion of the market would, in the absence of compensatory action, benefit Latin American suppliers at the expense of ACP suppliers. Second, some technical standards, by favouring the use of one particular product over another, have the implicit (and usually unintended) effect of creating a preferential market for the exports of particular developing countries. An example is the requirement in some countries that a product contain no oil

'These estimates are from the Emerson Report (CEC, 1988), Table 10.2.2. They incorporate some, but not all, of the dynamic effects of a more integrated market and allow, in the case of the higher range, for 'accompanying macroeconomic policy measures' which boil down to lower income taxes and Keynesian demand expansion as a result of the improvement in Member States' public finances.


other than cocoa butter in order to be called chocolate. Implicit restrictions also exist tending to favour supplies from former colonies. The 1992 process will tend to bring about more homogeneity in geographical import patterns between Member States with potentially important distributive effects. Third, different supply capabilities among developing countries imply that some will be able to respond to the new market environment more quickly than others. The least developed countries could lose out as a result, a point emphasized in Frisch (1989), while the more advanced developing countries would gain.

Export-reducing effects can also be identified, some of which can be classified as trade diverting in the classic sense. As a result of the elimination of internal non-tariff barriers, the cost of importing from other Member States will fall. Other things remaining the same, this relative reduction in the price of imports from other Community countries will encourage trade diversion from third country suppliers. Examples of trade diversion are not easy to find in the case of primary products. Among primary products affected by the 1992 programme, a significant proportion imported from the developing countries is non-competitive with EC suppliers. Import displacement could, however, be significant in the case of goods which have undergone processing and are in direct competition with E C producers.

Trade diversion effects could also occur if the removal of national barriers on imports was accompanied by the imposition of more restrictive common external barriers. In the case of technical barriers to intra- Community trade, the mutual recognition principle does not require or imply any changes in external barriers. However, while the mutual recognition principle is the usual approach to eliminating technical barriers to trade, where environment, public security and health are concerned, minimum standards will be set by the Community in the form of horizontal Directives. For food, this will mean a general raising of health and phytosanitary standards which developing countries may have difficulty in meeting. Of the 300 measures outlined in the Commission’s 1985 White Paper on the Completion of the Market, no less than 74 concern veterinary and phytosanitary regulations. The influence of these factors is already being felt. Zimbabwe tobacco producers, for example, will have to adapt to the implications of low-tar standards set by the Commission. Concern about cadmium has affected Togo’s phosphate exporters and will require investment in new equipment if it is to be allayed.

The net consequences for developing countries of the Single Market will be determined by the relative weight of each of these three effects. Individual Member States will also be affected to varying degrees (an aspect of 1992 on which the Emerson (1988) and Cecchini (1988) studies are silent and which is still a lively topic of debate in the Member States).

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 163 To the extent that they have different propensities to import from developing countries, developing countries will be differentially affected. The following sections attempt to identify and, where possible, to quantify, the more important likely effects.

3. Trade Effects of Faster EC Growth

Estimates of the Income Effect The magnitude of trade creation due to the higher EC income arises from two sources, a volume and a price effect. The volume effect can be simply estimated once the changes in economic activity resulting from the Single Market and the import elasticity of demand for primary imports from LDCs are known. The assumption is made, based on the Cecchini Report, of a 5 per cent cumulative increase in E C GDP following implementation of the Single Market programme. (Other writers such as Baldwin (1989) point out that, if dynamic effects are properly accounted for, the impulse to EC growth will be significantly higher.) Consistent estimates of the import elasticity of demand for primary products are more difficult to come by. There is a discussion of some published estimates in the Appendix to this article.

Table 4 shows the result of one calculation of the possible volume effect for developing country primary exports following completion of the Internal Market. The suggested volume gain in export earnings from primary products of US$5. lbn amounts to about 6 per cent of the value of existing exports to the EC.

To this volume effect must be added the terms of trade effect arising from higher prices for existing exports due to increased EC demand. The

Table 4: Estimated Value of Projected Increase in Volume of LDC Primary Commodity Exports to E C Arising from 5 per cent Increase in E C G D P

Product group

1 . Food and beverages 2. Raw materials 3. Non-ferrous metals 4. Fuels 5. Non-fuel primary

products (1+2+3) 6. Total primary (4+5)

Value of EC imports, 1987 US$ million

24,298 14,359 3,514

42.926

42,170 85,096

Import Effect of 5%

US$ million elasticity increase in E C G D P

0.6 0.3 0.7 1.9

729 215 123

4.078

1,067 5,145

Source: Own calculations based on import elasticities from Balassa (1987); Southern Europe included among LDCs in trade statistics


price effect in any market will depend on the EC’s share of total world imports, the income elasticity of import demand, and the price elasticities of import demand and export supply. On the basis of the elasticity assumptions derived in the Appendix, the value of the terms of trade effect is shown in Table 5. Fuel is not included in this calculation because its supply is controlled by the major fuel exporters to try to maintain a target price. The terms of trade effect implies a further modest gain to LDC non-fuel exporters.

Table 5 : Value of Terms of Trade Effect fo r Primary Products Due to 5 per cent Higher E C G D P

EC share Percentage Percentage Value of Terms of world increase increase LDC trade

market in world in world exports, gain demand price 1987

(%I (%) (a) US$m US$m

Foodandbeverages 24 0.7 0.6 44.700 268 Raw materials 30 0.45 0.45 1 1,750 53 Non-ferrous metals 30 1.05 0.95 7,500 71 Fuels 27 n.a. n.a. n.a. n.a.

Total 392

Source: Own calculations, based on assumptions contained in the Appendix

In total, trade creation as a result of the ‘locomotive’ effect of faster EC growth could be worth around US$5.5bn to LDC exporters, of which around $USI.4bn would accrue to non-oil primary exporters. The magnitude of the overall gain depends crucially on the predicted elasticity of demand for fuel imports. In assessing the realism of this figure, the EC’s efforts to reduce its dependence on oil imports should be borne in mind. However, these policy initiatives will continue in any case so do not negate the importance of the locomotive effect for fuel exporters. The welfare effects of this increase in foreign trade earnings would, of course, be smaller; account would have to be taken of the opportunity cost of the additional resources, including inputs purchased from abroad, to produce these extra exports. In regional terms, among primary product producers, Africa and the Middle East will be the principal beneficiaries, with much less important effects for Latin America, the Far East and the least developed countries of Africa.

The much higher import elasticity for manufactures is a reminder, however, that the gains to primary producers are only part of the story, and that in the long run developing country manufacturing

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 165 exporters to the E C (predominantly Latin American and Far Eastern countries) could be the major beneficiaries of the 1992 programme.

implications of Different import Patterns among Member States So far we have considered the effects of an overall 5 per cent increase in EC G D P with the implicit assumption that the additional demand is evenly spread among the Member States. If this assumption does not hold, then there will be consequences both for the aggregate increase in exports of the developing countries and for the distribution of this increase among them. For one thing, import demand elasticities may differ among Member States and, secondly, the geographical pattern of primary product imports from different developing areas (Africa, Latin America, etc.) varies considerably from one Member State to another. It is useful to examine the scale of these divergences in import patterns and how they might be affected by the 1992 programme.

For example, a comparison of Germany’s import structure with that of the Community givesone indication of the different geographical pattern of imports from developing countries among Member States (Table 6). More national detail is shown in Table 7 where a comparison of the import structure of the other four larger E C states with that of Germany is made.

Table 6: German Import Structure Compared with EC Average ~~

Africa Latin America Middle East Far East S. Europe SITC

01 03 05 06 07 08 12 22 24 26 27 28 29 33 34 68 Negative signs

3.1 -19.3 -7.3

-49.1 -10.0

2.0 3.3

-3.4 -7.8 4.6

-15.4 -9.7 -6.0 18.8

-70.6 3.7

10116

8.3 -20.9

9.6 22.9 7.9

-5.0 -8.7 -2.5 -4.0 6.9 4.4 4.3

-16.5 2.6

-0.1 -5.3 8/16

0.0 2.5

-1 .O 0.7 0.0 0.0 0.0 0.0 0.0 0.8

-3.6 0.0 1 .o

-21.6 61.1 -0.8

419

-3.3 30.3 -2.0 26.8 -0.5 3.7 5.7 1.9

19.4 -12.6

12.7 1.1 5.8 0.3 0.0 4.0 4/15

-8.0 7.4 0.6

-4.5 2.7

-0.9 -0.4 -0.9 -7.6 0.2 1.9 4.2

15.8 -0.1

9.6 -1.7 8/16

Source: Own calculations

Note: Figures in the table represent the difference between each region’s share of LDC imports into the EC

166 A . MATTHEWS AND D. MCALEESE

Table 7 : Comparison of EC Member State Lmport Shares of Developing Country Regions with German Lmport Shares

United Kingdom percentage shares compared to German percentage shares Africa Latin America Middle East

SITC 01 03 05 06 07 08 12 22 24 26 27 28 29 33 34 68 Negative signs

5.6

14.0 41.3 26.0 -0.9 -7.8 36.7

-0.9

-16.3 -5.1 24.1 33.8 7.4

-23.4 52.0

7/16 -20.5

-5.5 -3.8

-15.4 -16.7 -28.6 -39.7

11.6 -50.7 28.7 -1.2 -9.5

-22.5 0.9

10.9 1.1

19.8 10116

-1.3 -2.9 11.0 -1.1 0.4

-0.2 0.2

-0.2 0.2

-2.6 -1.8 -0.1 -1.1 12.7

-41.9 5.2

10116

Spanish percentage shares compared to German percentage shares

SITC 01 -9.6 8.3 -2.1 03 25.2 31.5 -2.8 05 -1.3 -24.4 -8.8 06 11.1 5.9 -1.2 07 -6.6 13.7 0.0 08 -3.4 25.0 -0.2 12 -30.6 44.5 -0.0 22 -1.2 15.8 0.4 24 41.8 4.8 0.0 26 -11.5 -2.5 -0.3 27 43.3 -11.9 -6.4 28 10.8 -5.8 -0.6 29 -3.3 13.4 -13.1 33 -21.8 11.3 11.2 34 60.1 0.2 -49.2 68 -27.6 42.3 -0.6 Negative signs 10116 4116 11116

Africa Latin America Middle East

French percentage shares compared to German percentage shares

SITC 01 -10.2 -22.7 10.7 03 40.1 10.8 -2.0


Far East

0.9 9.8

-12.4 -33.1

4.8 37.1

18.7 -12.8

10.4 -11.0 -1.4 -5.1 0.1 0.0

-1.8 8/16

-3.0

Far East

-0.6

28.2 14.2

-38.3

-2.4 -20.7 -12.9 -9.4

-47.0 15.5

-21.9 -3.2 4.9

-0.5 0.0

-8.2 11/16

Far East

24.9 -36.4

05 26.9 -15.9 1.6 -9.1

S. Europe

0.2 -2.2 2.8 9.7

-2.5 3.7

-1.1 0.5 0.1

-1.5 -1.9 -9.7 -2.1 -0.3

-11.2 -2.6 10116

S. Europe

4.0

6.2 -1.6 -4.7 -0.7 -1.0 -0.7 0.4

-1.2 -3.2 -1.1 -2.0 -0.5

-1 1.2 -6.0

-15.9

13116

S. Europe

-2.8 -12.4 -3.5

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 167 06 07 08 12 22 24 26 27 28 29 33 34 68 Negative signs

78.3 20.1 - 4 5 -6.2

1.9 29.0 8.4

10.8 10.9 26.0

-22.2 73.9

-17.3 5/16

-42.8

25.7 21.3

-17.0

-17.9 -2.4 -0.2 -9.7 4 . 8 -7.2 -2.8 0.1

20.3 11/16

-1.1 0.1

-0.2 0.1 2.0 0.0

-2.0 18.8 -0.9 -7.4 25.2

-62.8 -0.7 8/16

Italian percentage shares compared to German percentage shares

SITC 01 -11.3 -19.7 -1.8 03 34.6 21.8 -2.4 05 3.6 6.5 -2.4 06 26.3 -14.1 -1.2 07 10.1 -3.1 0.0 08 0.7 4.7 -0.2 12 -32.2 47.2 0.0 22 1.1 1.2 3.3 24 3.0 -0.6 0.0 26 -13.4 -12.4 -1.9 27 -9.7 14.5 4.1 28 20.5 -17.9 0.5

33 -16.0 -9.8 25.4

68 -19.5 11.3 0.6 Negative signs 6/16 7/16 8/16


29 4.5 7.2 -14.4

34 71.2 0.0 -65.4

-32.6 1.2

-20 I 2 -15.0

19.5 -26.1 4 . 4

-16.8 -1.1

-12.0 -0.1 0.0

-2.9 12/16

Far East

0.4 -40.2 -4.0

-13.2 -2.4

-16.4 -27.1 -0.1

-27.1 26.3 -9.0 -0.8 -2.1 -0.4 0.0

-6.5 13/16

-1.7 4 . 4 -0.8 -0.2 -0.6 -0.5 -1.9 -3.2 -4.1 0.5

-0.1 -1 1.2

0.7 14/16

S. Europe

32.5 -13.8 -3.6

2.1 4 . 5 11.2 12.1 -0.4 32.5

1.4 0.0

-2.2 4.8 0.7

14.1 6/16

-5.8

Source: Own calculations

The comparison is confined to the 16 SITC classes (at the two-digit level) within the primary category (SITC 0-4 plus 68) for which total E C imports from developing countries exceeded US$lbn in 1987. Only the relative market shares of different developing country regions within the overall total of imports from developing countries are examined. For some of the products covered there is also scope for substitution between developed and developing country exporters, and the analysis could easily be extended to accommodate this.

Table 6 indicates the difference in the market share of each developing country region in Germany compared to the Community average. A negative figure indicates a lower market share in Germany than in the Community at large, and a positive figure a higher market share. Using the


criterion of a simple count of signs (ignoring zeros), Africa has a marginally weaker position in the German market than in the Community market as a whole, while the Far East has a strikingly stronger one.

The national comparisons in Table 7 show a more diverse picture at the national level. In the United Kingdom market, Africa has a relatively stronger position as compared with Latin America, the Middle East and Southern Europe. Spain shows almost the reverse pattern, with a very strong market position for Latin American producers at the expense of the Far East, Southern Europe and also Africa. Africa has a relatively strong market position in France compared to Latin America, the Far East and Southern Europe. The position in the Italian market is less clear-cut; although the Far East has a lower market share than in Germany, the bias in favour of Africa and Southern Europe is less marked than for other EC Members.

The above analysis indicates that sharp differences in import patterns exist among Member States and that they should be taken into account in assessing the 1992 growth effect. But this leads to a question as to whether such pronounced differences in import sourcing will continue to prevail in the integrated E C market post-1992.

Member State trade flows are heavily influenced by geography, historical links, language similarities and national preferences. These factors will not cease to exist after 1992. Nonetheless, one would expect differences in import market shares in EC national markets to be reduced over time (for example, through the emergence of European firms with a global or at least Community perspective to the sourcing of supplies). Our examination of existing import shares may throw some light on the effects of such a levelling process. The implications of an above- or below-average Community market share in a particular national market is not unambigu- ous, and could be interpreted in two ways. It may reflect either a privileged position in this market in the past (with the prospect that the share will fall post-1992) or it may reflect competitive strength in this market and relative discrimination in other markets (with the prospect of an overall improvement in market share post-1992).

This ambiguity could be overcome if we could identify a national reference market which is believed to be relatively open and free from privileged market positions, and which might thus be taken as the Community reference towards which other national markets will tend over time. Germany could well fit this role in view of its weak colonial links with particular groupings of developing countries and its relatively open market. In that case the expectation would be for an approximation to the German norm by all Member States.

Viewed in this way, Britain and France, with their past colonial links, have closer trading links with Africa, and Spain with Latin America, than has Germany. Conversely, ties with the Far East are relatively weak. To

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 169 the extent that these trade patterns are not based on tangible economic factors (such as lower transports costs or a better matching of supply to national preferences), then Africa’s higher market share in some national markets appears vulnerable in the wake of 1992. When added to the earlier finding that African non-oil producing countries will experience a much weaker locomotive effect than other developing country regions, the conclusion must be that 1992 will do little to modify the on-going regional differentiation between developing countries.

This is a very aggregative analysis, at most suggestive rather than conclusive. The next step is to study the incidence of national barriers which stand in the way of the ‘homogenization’ process hypothesized above and which the 1992 programme is designed to remove.

4. EC Tax Regime, National Restrictions on Imports and 1992

Effects of 1992 Fiscal Regime At present, there are wide divergences between Member State indirect tax regimes. The intention is to bring about substantial approximation of indirect tax rates within the Community. The Commission’s proposals, however, have changed considerably over time. The search for consensus has been made more difficult by (1) the large magnitude of fiscal loss (gain) to individual Member States as a result of approximation, and (2) the requirement of unanimity (instead of qualified majority) at Council level before putting approximation into effect.

Harmonization of VAT rates is complicated by the fact that the standard rate of VAT differs across the Community, and most countries apply, in addition, special lower rates and higher rates (and sometimes more than one). The Commission originally proposed a range of 14-20 per cent within which Member States would have to fix their standard rate, plus a single lower rate in the 4-9 per cent range for foodstuffs, energy products, water supplies, transport, pharmaceutical products, books, newspapers and periodicals. It subsequently accepted that zero rates could be permitted in certain circumstances (a concession to Ireland and the UK which have zero-rated food and children’s clothing). After toying with the idea of a minimum rate of 15 per cent instead of a range for the standard rate, the Finance Council in December 1989 adopted a two-legged approach. For the next two years countries with a standard VAT rate inside the 14-20 per cent band agreed not to move outside it, while countries with VAT rates outside the band agreed not to diverge further away from the band. The present lower rates can be retained until the end of 1991 while Member States try to reach agreement on their convergence. Essentially, the proposal means that the approximation of VAT rates will


be postponed for a further two years. However, it is likely that Member States will use this breathing space to move towards the Community average, so some convergence of VAT rates can be expected in practice.

There have been similar difficulties in agreeing a common rate structure in the case of excise taxes, where rate differences between Member States are even more pronounced. Under the Commission’s current proposals (November 1989), both minimum rates and target rates would be set for alcohol and alcoholic beverages, tobacco and most petroleum products. The target rates are set at considerably higher levels than the Commis- sion’s original proposals to take account of concerns on health, transport, energy and the environment expressed, in particular, by the Northern Member States. While there will be no obligation to adjust rates which are currently higher than the minimum rate, any subsequent adjustment will be allowed only if it is towards the target rate, and not away from it. Both minimum and target rates would be reviewed every two years. Import- antly, excise duties on all other products would be phased out.

The effect of these tax changes on developing country exports of primary goods can, in view of the uncertain outcome of the negotiations, only be roughly sketched. One issue is the impact of the E C tax system on consumption of tropical beverages (Table 8). In the case of cocoa, excise taxes are low or non-existent in the Member States, with the exception of Denmark which accounts for only 0.3 per cent of Community imports. The position as regards coffee is different. Excise taxes are substantial in several of the major importing countries. Germany has a rate of 41 per cent on coffee beans; Italy charges 9 per cent; Belgium 6 per cent; Denmark 15 per cent. Denmark also imposes excise taxes on tea but the major consumers (notably the UK which accounts for 70 per cent of E C consumption) impose no tax.

Table 8: Tax Rates on Coffee and Coffee Products and Cocoa Products

Cocoa products Coffee and coffee products

Excise VAT Excise

Germany 0.0 7.0 40.9 France 0.3 5.5 0.0 Italy 3.9 9.0 9.0 UK 0.0 12.0 0.0 Netherlands 0.0 12.0 0.0 Benelux 0.0 6.0 5.7 Ireland 0.0 11.5 0.0 Denmark 88.4 22.0 15.1 Greece 0.0 0.0 0.0

Source: Davenport (1988) Nofe: implicit rate on cocoa derived from VAT rate on chocolate confectionery

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 171 Any change in excise taxes must be seen in the context of prospective

changes in VAT. Tropical beverages are VAT zero-rated in the UK and Ireland; other Member States apply VAT at different rates. Cocoa consumption is taxed indirectly via VAT on chocolate confectionery. Under present proposals, it is possible that post-1992 VAT rates will not differ much from existing rates but that excise taxes will be abolished. If that should be the outcome, the main beneficiaries would be developing country exporters of coffee. According to Davenport’s (1988) estimates, the effects of excise tax elimination on coffee and cocoa products on exporting countries would exceed 650m ECU, of which 189m ECU would accrue to ACP producers. These figures take account of an estimated 5 per cent rise in the world price of these products as a consequence of the rise in E C demand in response to the tax cut.

Indirect taxes on fuel also vary considerably among Member States and explain the high degree of price dispersion for fuel products. At the end of 1987 VAT and excise duty on petrol in the Member States ranged between - 40 per cent and + 60 per cent of the average E C price (Energy in Europe, 1988). For environmental and other reasons, however, we think it unlikely that there will be any significant reduction in net tax incidence which would be of interest to developing country oil exporters as a result of 1992. The demand position could, however, be affected by a tougher E C approach to domestic subsidies, national oil marketing monopolies and special national arrangements with non-EC suppliers.

Abolition of National Trade Restrictions Relatively few national restrictions remain in force within the Community for primary products. To enforce such restrictions, Article 115 permits Member States to restrict imports from other Member States where national interests are likely to be seriously affected by trade deflection. However, recourse to Article 115 has been infrequent for agricultural products and the number of cases has been declining over time. Despite this, one or two problem areas will arise.

Six Member States (UK, France, Greece, Spain, Portugal and Italy) operate separate national regimes for the import of bananas from former colonies and overseas territories. The average price differential between preferred suppliers (mostly of ACP origin) and non- ACP suppliers (mostly Latin American) amounted to 21 per cent in 1987 (Eurostat Trade Statistics). The effect of eliminating the national restrictions could be to reduce ACP producers’ export revenues by up to 300m ECU, but low-cost Central American producers could gain up to 850m ECU in the EC market (Baver et a l . , 1950). Some easing of their position could, and most likely will, be arranged. One possibility would be via deficiency payments, i.e. their bananas would sell on the Community market at the ‘world’ price but


EC subsidies would be paid up to present levels of supply. In that way, their income would be sustained without detriment to the objective of completing the EC market (Stevens, 1990 has a fuller discussion of this topic).

Obstacles to Community-wide trade also exist in the market for energy products. In the case of oil, some countries will operate national marketing monopolies, although on a diminishing scale, and others retain price controls or import licensing systems. Different national specifications for lead and sulphur content also impede trade and raise costs. The adoption of common specifications at the Community level would, according to Com- mission estimates, reduce costs by 500m ECU. This would have implications for states trying to build up export-refining capacity. Measures to encourage the use of domestic energy in electricity production are employed by Member States (coal in UK electricity; turf in Irish electricity). Direct state aids to the E C coal industry amounted to 3.3 bn ECU in 1986. No matter how the energy market is restructured, however, extra-EC oil suppliers are unlikely to gain-a major objective of Community energy is to reduce dependence on imported oil.

At present, the original six Member States (except the Netherlands) prohibit any product labelled chocolate from containing any vegetable oils or fats other than cocoa buttedoil. This was designed to protect continental chocolate producers from UK competition. (The UKpermitsvegetable oils up to 5 percent by weight). The effect of these regulations is to benefit cocoa exporters at the expense of palm-oil exporters - an instance of intra-LDC redistribution. Pressures of competition, under the principle of mutual recognition, will force continental countries to relax their rules. Davenport (1988) estimates a loss to cocoa producers of 49m ECU (1985-6) or 2.5 per cent of their exports to the Community. The extent of the loss will depend on the prevailing cocoa price relative to vegetable oils and fats. The recent steep decline in cocoa prices will reduce the size of the loss from this effect.

Sugar is also subject to quotas but they are covered by a Community-wide regime within the framework of LomC which is fully compatible with the Internal Market. Most ACP supplies are purchased by the UK but this reflects supply peculiarities rather than market segmentation. Pressures on internal Community prices will pass over into lower prices for ACP producers but this is part of CAP reform, not 1992. The removal of the restriction insisting on the use of sugar in French soft drinks could be described as a 1992-effect if it materializes (Mayo, 1989). Dismantling the sugar price regime under CAP would, of course, imply severe domestic EC, and hence ACP, price reductions.

Some countries apply seasonal quotas to Mediterranean products (potat- oes, lettuces, tomatoes, beans and grapes) which may not be enforceable after 1992. E C imports of vegetables and fruit (including tropical fruit) from the developing countries amounted to US$6.3bn in 1987, over 7 per cent of

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 173 the Community’s total primary imports. This is a sizeable sum. Future prospects for these products, however, will be more influenced by reform of C A P than by the 1992 programme.

Approximation of Technical Standards National regulations relating to environmental and consumer protection will have to be approximated in order to create an effective Internal Market. Article lOOA of the Single European Act provides that such measures will take as their base ‘a high level of protection’. Of most importance for primary exporters will be action in the field of animal and plant health. A Community plant health regime already exists but it will need to be amended to take account of the abolition of frontier controls. In the case of animal health, it is proposed to transfer inland the controls concerning intra-Community trade, and to step up common actions to eliminate diseases such as swine fever, tuberculosis, brucellosis and leukosis. Other areas where technical standards will be harmonized include the permitted use of drugs, implants and other pharmaceutical products, residue tolerance levels, seed regulation, and the marketing and registration of plant protection products. Common standards are also envisaged relating to animal welfare and waste disposal.

The conversion of national to Community-wide regulations will have implications for primary exporters, particularly of food and tobacco. Imports of fish are subject to a Community-wide regime, but a 1992 effect via new health regulations cannot be ruled out - a point of relevance to Morocco and other suppliers. Developing country exporters of ores, minerals and fuels will also need to become more conscious of the environmental aspects of their output - the case of phosphates has been noted earlier. It is not clear how these exports will be affected but the net effect of forthcoming change is certain to favour producers of higher quality products from an environmental and safety point of view. This suggests the need for more investment in upgrading product quality among LDC suppliers.

5. Agricultural Protection and 1992

The regulations of the Common Agricultural Policy (CAP) provide some of the most extensive protection to production within the Community. This protection severely restricts, and in many cases, virtually eliminates access to the Community market for third country suppliers of temperate and Mediterranean-type agricultural produce. Notwithstanding this, food exports to the E C from developing countries amounted to US$23bn, almost half of their non-fuel primary exports.


In recent years E C agricultural policy has been progressively modified as a result of severe budgetary pressures, but the basic principle of providing income support to farmers through commodity price intervention has not been fundamentally altered. However, the reforms agreed at the European Council in Brussels in February 1988, which included a ceiling on agricultural price support expenditure in the future, the completion of the set of ‘budgetary stabilizers’ which provide for mandatory reductions in price support once production ceilings are breached, and the introduction of a series of accompanying structural measures (set-aside, aid for forestry, aid for earlier retirement, direct income aids, etc.), are expected to curtail the growth of EC agricultural production in the future compared to the past. The new rules imply that in coming years market support expenditure cannot grow by more than about 2 per cent in real terms; this compares to an average of 6 per cent (at constant prices and exchange rates) between 1980 and 1987.

More fundamental reform may be in prospect if the agricultural negotiations in the G A T T Uruguay Round are brought to a successful conclusion. While negotiations have well passed their half-way mark, the outcome is still unclear. At the postponed mid-term review meeting in Geneva in April 1989, Ministers concluded that there was a broad consensus that agricultural policies should be more responsive to international market signals, protection should be progressively reduced and domestic support provided in a less trade-distorting manner.

In October 1989 the United States tabled a detailed proposal calling for the elimination of export subsidies within five years and the withdrawal of most other forms of agricultural support (with limited exceptions for items such as publicly-funded research and extension, as well as payments to farmers not linked to production and bonafide food aid programmes). The EC, in its detailed negotiating position submitted in December 1989, insists that agriculture must be treated as a specific sector with its own problems. It rejects any idea of long-term elimination of support in favour of a gradual (though unspecified) programme of reductions. It has gone some way towards accepting the US idea of ‘tariffication’, which would turn variable protective devices such as the EC’s variable levies into fixed tariffs as a prelude to their dismantling. It demands as a quid pro quo the right to ‘rebalance’ protection levels for individual commodities (meaning that protection for one product could be increased provided the overall trend was downward). Any eventual compromise between these US and E C positions will have clear implications for primary commodity market access.

The impact of the 1992 programme for agricultural policy must be evaluated in the light of these other pressures reshaping the CAP. Its main impact will be in respect to areas where the Community’s market for agricultural products remains fragmented because of national restrictions

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 175

or derogations, or where levies and subsidies continue to apply in intra- Community trade. The most important reason for the continued fragmentation of the Community market has been the unwillingness of governments to face up to the consequences of currency realignments for domestic agricultural prices. A complex agri-monetary system has been devised which allows governments to modulate the impact of devaluations or revaluations of their currency on national agricultural price levels.

As a result, national support prices, when converted into ECU at market exchange rates, can differ significantly by country and by product. At end December 1987, the highest support price levels on average for all products prevailed in Germany and the Netherlands (7 per cent above the Community’s effective average), and the lowest prices prevailed in the United Kingdom and Greece (12 per cent and 38 per cent, respectively, below the Community average). Inter-country price differ- entials for individual products were even more striking. In the case of cereals, for example, support prices in Germany were 8 per cent higher than in France and Ireland, 26 per cent higher than in the United Kingdom and 64 per cent above the Greek level. These differences in national price levels require that monetary compensatory amounts (MCAs) in the form of border taxes and subsidies must be applied in agricultural trade. The removal of MCAs is therefore a prerequisite for completing the Internal Market in agricultural products. For third countries, its significance lies in the mechanics of how this will be done. In particular, will the elimination of MCAs be associated with a lower or higher level of external protection for Community agriculture than might otherwise be the case? On balance, a reduction in EC agricultural protection would be welcomed by LDCs (see Matthews, 1985 for a fuller discussion). Hence the interest in asking how the level of protection would be affected by the elimination of MCAs.

Since 1987, considerable progress has been made in eliminating national price differences due to the agri-monetary system, at least for countries within the Exchange Rate Mechanism of the European Monetary System (EMS). At the 1987-8 farm price review, agreement was reached on a timetable to dismantle newly-created monetary gaps. Subsequently, agreement was also reached to phase out the stock of existing negative MCAs in four stages up to 1992. This elimination of national price differences in recent years has been greatly facilitated by the introduction of the so-called ‘switchover system’ in 1984. The effect of this system is to increase the value of the ECU used to denominate EC farm support prices by the highest appreciation of any currency following an EMS alignment (the so-called ‘green ECU’). Under this system, support prices in national currencies have been additionally increased by almost 14 per cent since 1984, despite the apparent freeze on nominal support prices during this period.


What might happen after 1992? One alternative is to abolish the agri- monetary system altogether. This would leave E C agricultural markets to operate like any other, on the basis of market exchange rates for currencies. Support prices would vary in national currency as exchange rates for currencies between national currencies and the ECU fluctuated. While exchange rates within the EMS have been relatively stable in the last two years, the liberalization of capital movements between the major EMS countries after 1990 could lead to increased realignments in the absence of closer monetary co-ordination. Whether Member States would be willing to accept the implied instability in their agricultural prices is an uncertain issue. The weakening of the intervention system means that there is now a less direct relationship between changes in support and market prices than was the case before. Progress towards economic and monetary union (EMU), though not a 1992 effect, would, by fixing exchange rates irrevocably, make the problem redundant.

The other alternative would be to keep the agri-monetary arrangement with its system of green exchange rates, but perhaps to establish limits to the amount by which they would be permitted to vary from central or market rates before being brought back into line by devaluation or revaluation as necessary. Within these limits MCAs would no longer be applied (technically, this could be achieved by increasing the size of the existing neutral margins ignored for the purposes of calculating MCAs from the present 2 per cent limit to whatever size of monetary gap would be allowed). The resulting monetary gaps could then be eliminated gradually over time.

In this second scenario, the key issue for third countries is what would happen to the switchover system. If the arrangement was continued as at present then the green E C U would be gradually revalued over time, allowing further scope for increases in national support prices and in the level of external protection. If the system was discontinued, however, then countries with revaluing currencies would have to be prepared to see this revaluation ultimately reflected in lower national support prices and the impact on agricultural protection levels of future EMS realignments would be broadly neutral.

To summarize, the incompatibility of border taxes and subsidies on agricultural trade with a Single Market after 1992 will force changes to the Community’s agri-monetary system. This will have implications for the future level of Community support to its agriculture. The need to remove national restrictions as part of the 1992 programme is often associated by third countries with the fear that the common Community level of external protection will be strengthened as a result (‘fortress Europe’). However, the reform of the Community’s agri-monetary system holds out the prospect of lower external protection in the future than would be the case under the continuation of the current rules. The central issue is what will

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 177 happen to the switchover system, which implicitly increases the value of the ECU used in farm price support by the amount of the largest appreciation in the value of any EMS currency at the time of an EMS realignment. The abolition of this system, a likely but not inevitable part of the 1992 process, would reduce the level of CAP protection in the future compared to what it would otherwise be under the existing rules. If rapid progress is made towards E M U following on the inter-governmental conference called for late 1990, then the problem would become redundant.

6. Conclusions 1992 will create scope for increased primary exports from developing countries via its stimulative effect on EC economic growth. The amount involved could be as much as US$Sbn. This is a preliminary estimate but it indicates theorder ofmagnitude. Therecould beafurthergain of US$0.4bn due to firmer primary product prices as a result of increased EC demand. Still larger gains might accrue if, as some predict, the 1992 GDP growth effect is larger than Cecchini’s modest 5 per cent figure on which the above estimates are based.

Next in importance is the effect of the post-1992 approximated tax regime. Davenport (1988) estimates an increase in tropical beverages exports of developing countries of US$O.Gbn if excise taxes on these products are removed. The effects of the 1992 tax regime on fuel imports is unlikely to be favourable.

Removal of national preferential restrictions will cause localized problems, primarily affecting ACP countries. The case of bananas is well documented, where losses of 300m ECU to ACP countries are possible.

Removal of technical barriers will result in the need for upgrading of quality of developing country primary exports. Health, safety and pollution requirements will increasingly have to be improved in order to gain access to the E C market. This will be particularly relevant to food, tobacco and fish exports as well as to certain minerals. It raises the question whether 1992 will encourage or discourage EC investment in LDC primary export industries.

C A P reform will have an important bearing on extra-EC suppliers, but the 1992 process will have only a relatively minor impact on this. Among the 1992 effects the continuation or not of the switchover mechanism in the agri-monetary arrangements was identified as an important variable - discreetly and unnoticed, this has led to a 14 per cent rise in national EC prices since 1984. Production limits on EC farmers may of course have limited some of the spillover effect of this price increase on world markets.

Member State import patterns differ markedly. Some of these differences are due to the different incidence of national restrictions. The search for the most plausible ‘norm’ continues. If Germany is employed for this

178 A. MATTHEWS A N D D. MCALEESE

purpose, comparison of German import patterns with the EC average indicates the prospect of losses to ACP countries, but corresponding gains to the Far East and Latin America.

Finally, while this article focuses on 1992 effects on developing country exports of primary products, it is worth noting that developing country primary producers may gain via lower import prices as well as via the export volume and export price effects discussed here. The 1992 programme is expected to have a significant impact on EC costs and competitiveness in manufactured goods, particularly in the capital goods and intermediate sectors. As net importers of such products, developing countries may gain substantially from the resulting lower import prices.

Appendix Bond (1987) has assembled estimates of income elasticities of demand by commodity for the world as a whole as well as deriving her own estimates by commodity and region. Her estimates of income elasticities for imports from all developing countries and from Africa are compared with other estimates in Table A. The column headed ‘average’ is based on an appropriately weighted average of elasticities for individual commodities obtained from a wide range of studies, while the Goldstein and Khan (1985) results are an average of the demand elasticities obtained in their survey of import equations. The range in values is clearly evident, with Bond tending to the higher and Balassa (1987) to the lower end of the range.

The estimates shown in Table A are not strictly comparable (Bond’s estimates refer to the impact of a rise in world income, while Balassa’s estimates refer to a rise in the income of OECD countries) and are not necessarily relevant to calculating the effect of a rise in economic activity in

Table A: Estimated Income Elasticities of Demand for Primary Commodity Imports

Study Bond Bond Bond Goldstein Balassa and Khan

(all LDCs) (Africa) (average)

0.98 } 0.60 Food 1.20 1.01 0.50 Beverages 0.68 1.34 0.35 0.98

and tobacco Agricultural raw materials 0.56 0.54 0.80 0.85 0.30 Energy 3.53 5.10 - 1.22 1.90 Minerals 2.16 3.85 2.80 - 0.70

Sources: Bond (1987); Balassa (1987); Goldstein and Khan (1985)

LDC EXPORTS TO THE EC: PROSPECTS POST-1992 179 the EC on import demand from developing countries. Whether past import elasticities will be a good guide to future trends might also be questioned. One argument is that future EC growth will be less materials- and commodity-intensive than in the past. A second argument is that 1992 liberalization is expected to be particularly important in the services sector, and thus a higher proportion of the expected increment of EC growth than might be predicted, even taking account of secular trends, may occur in this sector. Both arguments suggest that the elasticities in Table A may be biased upwards for future projections. For this reason, the estimates of the volume effect of ‘1992’ on LDC primary product exports shown in Table 4 in the article are based on Balassa’s more conservative figures.

In order to estimate the terms of trade effect, information is needed on the EC’s share of world imports, its income elasticity of demand for imports of each product, and demand and supply price elasticities for imports and exports respectively. Bond has also assembled information on the relevant price elasticities and, based on her data, the following estimates have been used to derive the figures in Table 5.

Demand Supply Income

Food and beverages Agricultural raw materials Minerals

-0.4 0.8 0.6 -0.5 0.5 0.3 -0.8 0.3 0.7

The projected increase in world prices is calculated as the percentage increase in world demand divided by the sum of the absolute values of the demand and supply elasticities. The percentage increase in world demand is, in turn, the product of the EC share of the world market, the predicted 5 per cent increase in EC GDP as a result of completing the Internal Market, and the income elasticity of EC import demand.

References Balassa, B . (1987) ‘The Adding Up Problem’, World Bank Working Paper WPS30

Baldwin, R. (1989) ‘The Growth Effects of 1992’, Economic Policy, 9, November. Bond, M. (1987) ‘An Econometric Study of Primary Commodity Exports from Developing

CEC (1988) Energy in Europe (Luxemburg: OOPEC). Cecchini, P. (1988) The European Challenge 1992: The Benefits of a Single Market

(Aldershot: Wildwood House). Commission of the European Communities (1988) ‘The Economics of 1992: An Assess-

ment of the Potential Economic Effects of Completing the Internal Market of European Communities’, European Economy, March.

Davenport, M. (1988) ‘European Community Trade Barriers to Tropical Agricultural Products’, OD1 Working Paper 27 (London: Overseas Development Institute).

(Washington: World Bank).

Country Regions to the World’, IMFStaff Papers, 34,2, pp. 191-227.


Frisch, D. (1989) ‘1992 and the Developing Countries’, Trocaire Development Review, pp. 9-24.

Goldstein, M. and Khan, M. (1985) ‘Income and Price Effects in Foreign Trade’. In R. Jones and P. Kenen, eds., Handbook of International Economics, I1 (Amsterdam, North-Holland), pp. 1041-105.

Matthews, A, (1985) The Common Agricultural Policy and the Less Developed Countries (Dublin: Gill and Macmillan).

Mayo, E. (1989) ‘Beyond 1992: The Effect of the Single European Market on the World’s Poor’ (London: World Development Movement).

Stevens, C. (1990) ‘The Impact of Europe 1992 on the Maghreb and Sub-Saharan Africa’, this Journal.

UN Monthly Bulletin of Statistics (New York: United Nations Statistical Office).

LDC Primary Exports to the EC: Prospects Post-1992

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