SMALL TRADE FLOWS AND PREFERENCE UTILISATION: THE CASE OF THE EUROPEAN UNION

Abstract

Abstract A significant number of preference eligible goods are imported into the European Union (EU) from developing countries at relatively low values. In 2008, more than 90% of the number of preferential import flows (at eight‐digit level) represented together about 5% of the value of EU preferential imports from developing countries. While the overall utilisation of EU trade preferences is high, preference utilisation rates of these low‐value imports are markedly lower. This fact is unobserved in the aggregate figures, and thus rarely noticed. This paper examines the extent and the importance of this phenomenon. It attempts to identify exporting countries and products that are particularly affected, and relate these findings to the preferential margin offered on the EU market as well as to the requirements of rules of origin.

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