The European Union and Multilateral Trade Governance

The Politics of the Doha Round

Arlo Poletti

• Publisher: Routledge
• Year: 2012
• Topic: Politics & International Relations
• eBook ISBN:
  9781136513046
• Subtopic: Politics
• Index: Politics & International Relations

What role does the EU play in WTO trade negotiations? What are the implications for the EU of the expansion of the international trade agenda that has taken place in the last fifteen years? The European Union and Multilateral Trade Governance examines the EU's role in global economic governance and the negotiations of the Doha Round.

The book provides a comprehensive overview of the EU's role in the Doha Round of multilateral trade negotiations. The empirical study is grounded in a theoretically driven discussion, in order to understand trade politics dynamics in the present international economic system.

By providing both conceptual and empirical arguments, the volume provides an innovative perspective on the analysis of the EU as a global economic influence. The European Union and Multilateral Trade Governance will be of interest to students and scholars of European Union politics and international political economy.

1 Making Sense of Multiple Trade Politics

In November 2001, with the adoption of the Doha Declaration, member states of the WTO launched a new and ambitious round of multilateral trade negotiations. The start of these negotiations seemed to bring to its highest point the gradual development from negative to positive integration of the international trade agenda. When the Treaty of Rome, which established the GATT, was drafted, trade policy consisted essentially of lowering and eliminating tariffs or quotas. As a result of successive GATT rounds in reducing tariffs to minimum levels, however, the international trade agenda gradually expanded to the domain of regulatory issues to ensure that domestic rules could not become substitutes for tariffs and quotas (Holmes 2006).

Already during the Tokyo Round, besides tariff reductions, new regulations were put in place in order to control the proliferation of non-tariff barriers. The Uruguary Round brought this process one step further. In addition to a path-breaking agreement on agricultural trade liberalization and further commitments in the area of manufactured goods, in the Uruguary Round trade talks opened up to a broader range of domestic regulatory issues (Woolcock 2000). Indeed, with such negotiations, WTO member states agreed to substantially liberalize trade in services with the adoption of the General Agreement on Trade in Services (GATS). With the agreement on Trade-related aspects of intellectual property rights (TRIPs), WTO members imposed the obligation to create domestic intellectual property rights legislation and to establish domestic institutions that can enforce them. An agreement on Technical Barriers to Trade (TBT) was also stipulated in order to reduce the discriminatory trade effects of domestic standards, mandating WTO members to design such standards in conformity with international standards. Also, WTO member states committed to an agreement on the Application of Sanitary and Phytosanitary Standards (SPS), by which any rules adopted to protect human or plant health should be in conformity with international minimum standards, guidelines or recommendations, such as those of the Codex Alimentarius administered under the Food Standards Programme of the Food and Agriculture Organization (FAO) and the World Health Organization (WHO). Finally, The WTO agreement on Trade-Related Investment Measures (TRIMs) set policy standards on local content, trade balancing, foreign exchange balancing and domestic sales requirements and became an integral part of binding WTO rules.

The Uruguary Round planted the seed for further liberalization commitments to take place in a short time-span. To meet the concerns of those WTO members that were aware of the limited potential for agricultural trade liberalization of the Uruguay Round Agreement on Agriculture (URAA), the text included a so-called built-in agenda (Article 20) mandating WTO members to start a new round of negotiations on agriculture by the end of 1999. Similarly, it was clear to negotiators that the GATS architecture and commitments were only a first step towards meaningful liberalization of trade in services and, as a result, further negotiations on services were provided for by a clearly defined time schedule (Bohmer and Glania 2003).

In 1999, the members of the WTO gathered in Seattle in order to launch a new round of multilateral trade negotiations. Besides the socalled ‘in built’ agenda for further liberalization of agricultural and services trade, it was clear that these negotiations were to include a set of new commitments in a wide range of regulatory areas. The EU was particularly adamant in its intention to broaden the agenda of the new Millennium Round to a wide array of regulatory issues. A variety of analyses point out that the EU has enthusiastically supported the emergence of this new trade agenda, particularly since the mid-1990s, undergoing a transformation from reluctant leader in the Uruguay Round, to key sponsor of wide-ranging liberalization in the Doha Round (Baldwin 2006; Falke 2005; Van den Hoven 2002; Young and Peterson 2006). After the the Uruguay Round, Commissioner Lamy gave shape to the so-called ‘multilateralism first’ approach for EU trade policy, putting in place a moratorium on bilateral trade agreements (Elsig 2007), while sponsoring broad-based negotiations embodied in the doctrine of managed globalization (Meunier 2007).

In the preparatory document for the Seattle WTO Ministerial Conference, the European Commission (1999) argued that the new round should aim not only at the opening of markets in agriculture, manufacturing, services, and free electronic commerce, but also at regulating a new host of domestic regulatory policies (Deutsch 2001; Young et al. 2000). For instance, the EU wanted negotiations on intellectual property (especially on indications of the geographical origin for agricultural products), technical barriers to trade, and trade defence measures reform (Deutsch 2001). Furthermore, the EU strongly advocated the inclusion of the so-called Singapore issues in the negotiation agenda: competition, trade facilitation, public procurement and investments. According to the EU, new rules on Foreign Direct Investments (FDI) would provide more unequivocal protection for investors and avoid bidding wars between governments aiming to attract FDI, as well as simplify and complement the existing panoply of bilateral investment agreements, while not putting developing countries at a structural disadvantage vis-à-vis large advanced industrialized countries (De Bièvre 2006). The EU also argued that more transparency in public procurement and the simplification of customs valuation procedures would enhance efficiency, facilitate trade, increase foreign market access, reduce corruption, and contribute to the economic development of developing countries (Woolcock 2005). An agreement on trade facilitation was deemed necessary to facilitate trade through the reduction of the administrative burdens (Woolcock 2000). In competition policy, the EU wanted WTO member states to negotiate rules on against private cartel practices and on how the activities of competition authorities could be coordinated. Finally, The EU also advocated that liberalization agreements concluded under the WTO be linked to commitments on minimum environmental and labour standards (Deutsch 2001).

In the end, the Seattle Ministerial ended in failure, witnessing the vociferous street protests of anti-globalist movements and exposing significant differences among member countries concerning what should be on the WTO agenda as well as shortcomings in the manner in which the WTO conducts its business and interacts with other international organizations and NGOs (Schott 2000). Among the many reasons for the Seattle failure, developing countries’ newly found assertiveness as well as their opposition towards the inclusion of the Singapore issues and skepticism to make commitments in the areas of environmental and labor standards were certainly prominent.

In addition, with the election of the Bush administration, the politics of trade changed. As the Bush administration was less beholden to those domestic interest groups that were critical of trade liberalization and the globalization of American business, such as unions and environmental groups, the US returned to a purely market-access based agenda that would eschew the new issues such as trade and labor and trade and the environment (Falke 2005: 12).

Against this background, an agreement for the launch of a new round of multilateral trade negotiations was finally reached at the Doha WTO Ministerial meeting in November 2001. This agreement was undoubtedly facilitated by the commonly perceived need to send a signal of unity after the terrorist attacks against the US that had taken place only two months before (Bluestein 2009). The Doha Declaration (WTO 2001) set out an ambitious negotiating agenda. In addition to a commitment to further liberalize trade in agriculture, services, and non-agricultural products (NAMA), to further regulate trade-related aspects of intellectual property rights, to clarify WTO rules on anti-dumping and subsidies as well as on regional trade agreements and special and differential treatment, WTO member states decided to start discussions on the establishment of new rules and commitments in areas such as trade-and-environment and technical assistance and capacity building. In addition, all four Singapore issues were also included as negotiating topics in the Doha Declaration, although the decision to open negotiations was postponed until the 2003 Cancun ministerial. In sum, starting in November 2001, WTO member states engaged in a new round of trade negotiations which both set out an ambitious liberalizing agenda for traditional market access issues and further expanded the potential for the WTO to spur positive integration in a wide array of issue areas traditionally regulated at the domestic level.

As already argued, this expansion of the international trade agenda has had profound effects for the domestic politics of trade, eliciting new demands from traditional trade-related domestic groups, but also fostering the mobilization of new societal actors, thus making the trade policy-making environment more politicized and open to normative contestation. These changes brought about new patterns of trade policy-making. Traditional patterns of trade policymaking increasingly co-exist with new ones. In the EU case, for instance, as Young (2007) notes, the EU has consistently and simultaneously pursued different types of trade policies in the Doha Round, ranging from traditional market access issues to so-called ‘social’ trade policies. This author’s analysis offers a first-cut overview of the complex domestic political processes through which the EU has come to define its strategies in these different issue areas, convincingly showing that it is impossible to account for such processes by relying on a singular and stable type of trade politics. Multiple and different patterns of politics have characterized EU trade policy-making in the Doha Round. Political processes played out in a fairly narrow policy community including national and EU officials, and relatively few economic interests coexisted with more contested and politicized types of interactions, witnessing the participation of organizations representing diffuse interests.

Also, the positions taken by the EU in a number of areas can hardly be described as being driven by purely rational and self-interested motivations. Indeed, the EU strongly supported the ‘development’ dimension of the Doha Round (Van den Hoven 2004), sided with developing countries on key matters such as access to medicines, and, more generally, showed to be quite responsive to the concerns of a wide array of organized societal actors pursuing value-based agendas in certain issue areas. Furthermore, while the EU’s support of the Singapore issues was compatible with the new interests of traditional trade actors, these business groups have been largely indifferent with respect to these negotiations (Woolcock 2005).

How can this complexity be made sense of? What is the logic underlying patterns of EU trade politics in these negotiations? As the argumentation developed so far suggests, an answer to these questions cannot be provided by relying on theories that describe singular and stable patterns of trade policy-making. Trade politics is illustrative of how ‘within nation-states, policy making increasingly occurs through a complex composite of multiple and shifting modes of governance’ (Yee 2004: 487). On occasions, traditional trade policy theories that conceive of governments’ choices as a result of interest groups pressures may well explain empirical reality while in other instances they do a poor job in accounting for observed patterns of policy-making. It has been convincingly noted, for instance, that while EU requests to include an environmental agenda in the WTO can be easily accounted for by the interests of newly mobilized constituencies, other policy priorities are much more difficult to explain from such perspective (Young and Peterson 2006). To add even more complexity, a question arises as to what extent can rationalist theoretical perspectives account for empirical developments in the trade policy arena. Was it ‘rational’ for the EU to support an environmental agenda in Doha? To what criteria of rationality did the support for the Singapore issues respond? In an increasingly complex, technical, and politicized trade-policy-making environment domestic trade-related interests find it increasingly difficult to define what their interests are, to agree on what purposes should be attributed to trade policy as well as on what strategies could best serve such purposes. In sum, we empirically observe that trade policy making within states increasingly varies along a number of different dimensions.

If this is the case, conceptually refining or empirically testing a single type of politics can do little to adequately grasp the empirical reality of trade politics. But how to proceed then? As Yee (2004) argues, one possible way forward is to devise a more comprehensive theory or framework encompassing multiple types of politics and allowing to identify the conditions under which these vary. The advantage of this approach is not limited to increasing our ability to explain empirical reality. Proceeding in such direction also offers an opportunity to produce substantial theoretical advancements. As Jupille et al. put it,

by identifying the respective turfs and home domains of each theory, by specifying how each explanation works and finally by bringing together each home turf in some larger picture […] each theory is specified independently and the result, if successful, is an additive theory that is more comprehensive than the separate theories’.

(Jupille et al. 2003: 21)

This is particularly relevant given that, reflecting autonomous developments within political science and the need to develop new theoretical and conceptual tools to take stock of the empirical transformations described so far, the trade policy literature has become theoretically much richer. What was until two decades ago regarded as a realism/ liberalism debate, evolved into a more richer and multifaceted one as a result of the influence of the theoretical insights developed within the multiple strands of institutionalism and social constructivism. These developments contribute to make an even stronger case to move away from the entrenched debates between theoretical ‘camps’ and to devise the conceptual and analytical tools that allow one to uncover the conditions by which one or another theoretical perspective holds more explanatory power. Indeed, the result of having a large number of small theoretical lenses to explain an expanding empirical domain of investigation is that each of these theories explains an increasingly smaller portion of such empirical world.

Quite surprisingly, however, very few studies have confronted this challenge. While it is common sense to state that institutions, ideas, interest groups lobbying, international security concerns etc. may represent key variables affecting patterns of trade politics, little attention has been paid to theorizing about when one can plausibly expect one of these analytical perspectives to hold more explanatory power than the others. The reasons for this mainly lie in a methodological bias. As it has been argued,

the emergence of multiple governance modes both intranationally and supra-nationally has posed vexing analytical problems for scholars accustomed to ascertaining and illuminating singular patterns of governance. When confronted with the apparent coexistence of multiple governance modes, they have often relied either on concept refinements to enhance the accuracy of their descriptions of singular governance modes, or on methodological adjudication between competing governance modes to ascertain the one model that best explains the empirical evidence. However, both analytical strategies encounter difficulties when the empirical reality consists of irreducibly multiple and repeatedly shifting modes of governance

(Yee 2004: 515)

Of course, some notable exceptions exist in the trade policy literature. Yet, these studies suffer from two weaknesses: either they analyze and account for variation along one single dimension of variation of patterns of trade policy-making, or they take a descriptive stance and fail to specify the causal mechanisms driving such variation.

In the remainder of the chapter, I seek to fill these voids. More specifically, taking simultaneously into consideration two dimensions of variation, I devise a theoretical framework to explain how, and under which conditions, different patterns of trade politics are likely to be observed. In a nutshell, I contend that trade policies determine trade politics. The political salience of an issue affects patterns of societal mobilization, which in turn influences decision makers’ room for maneuver and configurations of state–society relations. Whether the effects of prospective policies can be anticipated determines the logic of action of the actors involved in the trade policy-making process, hence how they behave and interact.

The argumentation develops in three steps. First, I define my dependent variable. I do so by constructing a four-cell taxonomy of trade politics that clarifies and systematizes the complex empirical reality of trade politics into a conceptually coherent range of finite trade politics types. In other words, in order to be able to explain variation across politics types, I begin by identifying what are the relevant dimensions of variation of such political processes. Second, I define my independent variables. I do so by developing a set of hypotheses on how issue characteristics affect patterns of trade politics. The choice is motivated by a desire to avoid developing an ad-hoc theory of EU trade policy-making. Finally, I devise a theoretical framework that connects independent and dependent variables, showing how and under what circumstances trade politics vary.

The Dependent Variable: Integrating the ‘Whom’ and the ‘How’ of the Trade ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of tables
• Preface
• Acknowledgments
• Abbreviations
• Introduction
• 1. Making sense of multiple trade politics
• 2. Pressure politics in agricultural negotiations
• 3. Deliberative politics in trade-and-competition negotiations
• 4. Civil politics in trade-and-environment negotiations
• 5. Executive politics in technical assistance and capacity building negotiations
• Conclusion
• Appendix
• Notes
• Bibliography
• Index