Power in North-South Trade Negotiations

Making the European Union's Economic Partnership Agreements

Peg Murray-Evans

• Publisher: Routledge
• Year: 2018
• Print ISBN:
  9781138106833
• eBook ISBN:
  9781351588867
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Advancing a constructivist conceptual approach, this book explains the surprising outcome of the Economic Partnership Agreements (EPAs) between the European Union and developing countries in Africa, the Caribbean and the Pacific (the ACP countries). Despite the EU's huge market power, it had limited success with the EPAs; an outcome that confounds materialist narratives equating trade power with market size.

Why was the EU unable to fully realise its prospectus for trade and regulatory liberalisation through the EPA negotiations? Emphasising the role of social legitimacy in asymmetrical North–South trade negotiations, Murray-Evans sets the EPAs within the broader context of an institutionally complex global trade regime and stresses the agency of both weak and strong actors in contesting trade rules and practices across multilateral, regional and bilateral negotiating settings. Empirical chapters approach the EPA process from different institutional angles to explain and map the genesis, design, promotion and ultimately limited impact of the EU's ambitious prospectus for the EPAs.

This volume will be particularly relevant to students and scholars of international trade and development and the EU as an international actor, as well as those researching international political economy, African politics and international trade law.

1 Introduction

I began studying the European Union’s negotiations for Economic Partnership Agreements (EPAs) with former European colonies in Africa, the Caribbean and Pacific (the ACP countries) in 2009. In essence, the EPAs were conceived as preferential trade agreements (PTAs) that would replace the longstanding Lomé Convention. Whereas Lomé had granted trade preferences to the ACP on a non-reciprocal basis, EPAs were reciprocal PTAs, meaning that ACP states would be required to open their markets to EU exports. Further, EPAs were originally proposed as ‘comprehensive’ trade agreements that would apply the reciprocity principle not only to goods, but also to services and a range of trade-related regulatory issues including investment, competition, public procurement and intellectual property. At that time in 2009, the EU and the Caribbean Forum (CARIFORUM) had recently signed the first of an intended series of comprehensive EPAs. Over 20 other ACP countries had concluded ‘interim’ EPAs that covered trade in goods, while negotiations were ongoing to extend the scope of these agreements and to bring into the fold 44 ACP countries that were yet to reach an agreement on an EPA.

The material asymmetries of the relationship between the EU and the ACP, and the former’s perceived imposition of a wide-ranging agenda for trade and regulatory liberalisation on the latter, had been the subject of much critical commentary on the EPAs up to that point (Hurt 2003; Goodison and Stoneman 2004; Farrell 2005; Goodison 2007; Stoneman and Thompson 2007; Brewster et al. 2008). Central to the concerns of these scholars was the fact that since the Lomé Convention was agreed in 1975 many ACP countries had accumulated a heavy dependence on preferential access to the EU market. Because of the non-reciprocal nature of this relationship, the ACP countries had little leverage over the EU with which to counteract this dependence (see Ravenhill 1985). By the time the EPA negotiations began in 2001, the European Union was the destination for 38 per cent of ACP goods exports whereas only 1.5 per cent of EU exports were destined for ACP markets (International Trade Centre 2018). The EU was the world’s largest trading entity and donor of official development assistance, and possessed diplomatic machinery that dwarfed that of the mostly very small and poor ACP countries. On top of this, the decision-making rules that are often thought to mediate these sorts of power asymmetries in multilateral trade negotiations did not apply to the EPAs since these were preferential trade negotiations taking place outside of the World Trade Organization (WTO).

The imbalances between the EPA parties meant that during the early stages of the negotiations it seemed safe to assume that the outcome was firmly in the EU’s hands. The finalisation of the EU–CARIFORUM EPA in 2008 appeared to confirm this. To put this in more general terms, the EPAs seemed to be a case in which asymmetries of market, financial and diplomatic power would – in the absence of mediating institutional structures – be translated into the realisation of developed-country ambitions for ‘deep’ trade integration (Lawrence 1996).

What surprised and intrigued me as I continued my research into EU–ACP trade relations – and as the EPA negotiations reached their final stages – was that the CARIFORUM EPA of 2008 proved to be a high water mark for the realisation of the EU’s ambitious prospectus for the remaking of relations with the ACP. Even where other regional EPAs were later concluded (if not yet signed and ratified)¹ – in West Africa, Southern Africa and the East African Community – this came only after the EU had agreed to drop its insistence on liberalisation in the areas of services and a series of trade-related regulatory issues, as well as to soften its stance on a range of controversial technical measures. This led a number of scholars to highlight the importance of the contestation of the EPAs by ACP and civil society activists (Del Felice 2012; Hurt et al. 2013; Trommer 2013) as well as the political and discursive contingency of the negotiations (Nyaga Munyi 2016; Gammage 2017; Weinhardt 2017; Weinhardt and Moerland 2018). Building upon and extending these contributions, the puzzle that interests me most in this book is why it was that – despite the obvious material asymmetries involved and the apparent lack of power-mediating institutional structures – the EU was able to achieve only limited and uneven success in persuading the ACP countries to adopt the ambitious and comprehensive trade prospectus that was at the heart of its EPA negotiating agenda.

This puzzle speaks to a broader set of issues within the politics of international trade and North–South relations in international politics more generally.² Specifically, the case of the EPAs presents a challenge to dominant materialist accounts of the operation of power in international trade while encouraging us to look more closely at the institutional structures in and through which trade power operates as well as the agency of both ‘weak’ and ‘strong’ trade actors. In order to address these issues, this book develops a conceptual framework based on constructivist theories of International Relations (IR) and International Political Economy (IPE), and particularly the work of authors who incorporate a central role for legitimacy within their analyses. My key claim in advocating for this approach is that power is a function not only of actors’ material capabilities, but also of their ability to successfully contest and define what constitutes legitimate behaviour. This contestation is in turn constrained and enabled by the complex social landscape of the trade regime, in which rules, norms, policies and practices at the global, regional and national levels help to set the parameters for appropriate behaviour, albeit in ways that are often ambiguous and subject to challenge and manipulation.

In the case of the EPAs, this framing allows me to argue that the EU’s ability to realise its prospectus for trade and regulatory liberalisation through these negotiations was more constrained than is frequently acknowledged. Specifically, I contend that the EU’s attempts to design and promote a replacement for the Lomé Convention played out within the context of a densely institutionalised and complex international trade regime that incorporated rules and norms embedded in the multilateral trading system, the legacies of past EU–ACP relations, the existing structures and practices of regionalism in the ACP, and the embedded trade and development ideas, policies and trajectories of individual ACP states. These provided a set of constraints and opportunities that EU policy-makers had to engage, navigate and narrate in order to seek to convince ACP countries that the adoption of its prospectus for comprehensive EPAs was necessary and/or desirable. Its attempts to do so, I argue, generated a series of tensions within the EPA prospectus and the discursive tools that the EU used to promote it. These tensions and ambiguities, in turn, provided opportunities for a variety of critical responses from ACP actors whose actions were themselves enabled and constrained by distinctive national and regional contexts. These responses ultimately drew a series of concessions from the EU on key parts of its EPA prospectus. In sum, the complex social landscape of the trade regime shaped both the EU’s approach to the EPAs and the way in which the negotiations played out, while the strategic agency of ACP actors – embedded within divergent regional and national contexts – was also key to the contestation of important aspects of the EPA agenda.

Power in the trade regime

As I have already suggested, the case of the EPAs presents a challenge to conventional materialist understandings of the operation of power in trade politics, as well as in international politics more broadly. Within the disciplines of IR and IPE power has been conventionally understood as a function of the capabilities or resources that fall under the control of states. In trade politics, this focus on material capabilities has drawn attention to the importance of market size and the externalities of asymmetrical trading relationships in shaping international power dynamics. Such understandings of power have been augmented by institutionalist approaches that emphasise the way in which the decision-making rules of multilateral institutions serve to mediate imbalances in market power, for example through consensus-based decision-making, coalition building and issue linkage. Drawing on these central insights of the literature on trade politics, numerous authors have suggested that while weaker states have been able to exert a degree of influence within rules-based negotiations in multilateral trade rounds as part of the General Agreement on Tariffs and Trade (GATT) and WTO, their ability to do so outside of this setting in PTA negotiations with stronger partners is much more circumscribed given the power-based logic of these types of interactions (see, for example, Gallagher 2008, 2014; Hurt 2013; Lee 2013). Such arguments, however, make it difficult to understand the successful resistance to key aspects of the EPAs by a large proportion of the ACP group.

The core conceptual argument that I put forward in this book is that dominant materialist conceptions of power in IR and IPE – and in trade politics specifically – understate the extent to which the operation of power is deeply embedded in institutional landscapes that not only structure decision-making and negotiating processes, but also help to set the parameters of legitimate action in the international arena. Here, institutions are defined broadly, to encompass a complex set of organisational structures, rules, norms and embedded practices that have authority by virtue of shared belief in their legitimacy by (some) states and their diplomatic agents. These institutions are often ambiguous and partial or overlapping and contradictory, leaving space for interpretation and contestation by strategic agents, whose understandings of their own interests are themselves infused by the social norms of the environment they inhabit. In this context, as noted above, the exercise of power is dependent not only on the use of strategic material resources by the strong to incentivise or coerce certain behaviours on the part of the weak, but also depends on the ability of actors to successfully contest and define what constitutes legitimate behaviour within the context of a particular institutional landscape. Importantly, such an approach emphasises the institutionally embedded agency of both strong and weak actors in international trade politics.

Using this conceptual approach, the book aims to build on existing contributions to trade debates that emphasise the role of ideas, language and symbolism in shaping power politics within the WTO (see, for example, Eagleton-Pierce 2013; Hopewell 2016). In so doing, I suggest that it is fruitful to examine how such dynamics operate not just within the trade regime’s central multilateral institution, but more broadly outside of this setting in a regime that is made up of overlapping organisations, norms, rules and practices at global, regional and national levels. In this way, I hope to problematise the conventional distinction between the rules-based logic of interactions taking place within the WTO and power-based negotiations taking place outside of this setting and to instead examine the ways in which power, institutions and legitimacy intersect in complex ways right across the trade regime.

The EPAs in context: trade power in a changing global order

The arguments presented in this book speak to a broader set of debates about the role of developing countries in a shifting global trade order. In particular, the analysis of the power dynamics of the EPAs as a set of North–South preferential trade negotiations takes on additional significance in the context of debates about the contemporary fragmentation of global trade governance. Concerns about the impending collapse of the multilateral trade system have been a recurrent feature of the post-1945 governance of global trade (Wilkinson 2014; Muzaka and Bishop 2015). In their most recent guise, such anxieties have stemmed from the stagnation of talks for a new multilateral trade round in the WTO and the eventual abandonment of the Doha Development Agenda at the Nairobi Ministerial in 2015 following agreement on only a small proportion of the round’s original programme. This stagnation and eventual breakdown – caused to a large extent by cleavages between developed and developing countries – encouraged the former to pursue an agenda for ‘deep’ trade and regulatory liberalisation via alternative means, most notably through megaregional and preferential trade agreements with key partners.³

These developments raised a series of concerns for developing countries. Specifically, a number of scholars highlighted the prospect that in highly asymmetrical North–South preferential trade negotiations such as the EPAs, developing countries would be under additional pressure to accept new regulatory commitments that they had rejected in the Doha round (Shadlen 2005, 2008; Gallagher 2008, 2014; Sánchez-Ancochea and Shadlen 2008; Heron 2011; Manger and Shadlen 2014). The concern with regard to megaregionals such as the Transatlantic Trade and Investment Partnership (TTIP) and the Transpacific Partnership (TPP), meanwhile, was that these large exclusionary agreements would leave developing countries outside of the process of setting global trade rules altogether (Draper et al. 2014; Kornegay 2014; Ramdoo 2014; Berger and Brandi 2015; Brandi 2016, 2017). While megaregionals appear to have faded from the US trade agenda following the election of Donald Trump, the latter’s brand of anti-WTO economic nationalism has done little to assuage concerns about the health of trade multilateralism. Even within the WTO itself, the recent rise of minilateralism has arguably meant a return to forms of global trade governance less inclusive than those which had emerged during the Uruguay Round (Wilkinson 2017). For those interested in the place of developing countries within the trade regime, the overarching anxiety is that the detrimental impact of the weakening of trade multilateralism will fall most heavily on developing countries, since they are reliant on this ‘rules-based’ system in order to have any influence in the wider trade regime.

The arguments in this book do not allay such worries. Indeed, they make clear that norms embodied in the multilateral trade system – universality, inclusivity and the sovereign equality of states – have proved useful for developing countries seeking influence both inside and outside the WTO. Thus, any decentring of multilateralism within trade governance is likely to have a detrimental effect on developing countries. Yet the book also cautions against the idea that further fragmentation of the global trading system will necessarily presage a binary shift from a rules-based to a power-based mode of governance, in which the latter offers little or no room for agency or influence on the part of weaker states. Instead, I emphasise the way in which rules and power interact and constitute one another, as opposed to existing as separate logics of action and explanation inside and outside multilateral institutions. Furthermore, I stress that complexity in the trade landscape is not altogether new, and that the EPAs are a case in which developing countries made use of aspects of this complex institutional setting to their advantage.

As well as its apparently impending fragmentation, shifts in the locus of economic power in the global system are a central feature of current debates on trade governance (see, inter alia, Gu et al. 2008; Narlikar 2010; Efstathopoulos 2012; Hopewell 2016). While these shifts are not the principal focus of this book, it is te...

Table of contents

• Cover
• Citation
• Half Title
• Title
• Copyright
• Dedication
• Contents
• List of illustrations
• Acknowledgements
• 1 Introduction
• 2 Power, institutions and legitimacy in trade politics
• 3 The evolving rules and practice of trade with developing countries: from Lomé to Cotonou
• 4 North–South PTAs and the multilateral system: contesting the EPAs
• 5 Regionalisms collide: the EPAs in Africa
• 6 Institutions and agency on the periphery: the SADC EPA
• 7 Conclusion: trade power in a shifting global order
• Index