The EU as a Conflicted Trade Power Flashcards
Sources of EU trade power
1) the strength of EU’s internal market: size and integration and economic weight (largest exported of manufactured goods and services and major importer of agricultural products)
2) four decades of experience negotiating bilateral and multilateral tarde agreements
3) structural power: market size (Brussels effect), economic performance and influence
4) bargaining power: institutional frameworks and decision making processes: centralized negotiation through the European Commission (negotiation as a single entity), qualified majority voting, institutional strength
Types of trade power that the EU wields
1) power in trade: securing market access and economic gains.
Market access as a leverage: enormous internal market, bargaining position negotiation FTA (mercosur)
Economic gains: lower tariffs, reduced trade barriers and intellectual property. Bilateral trade agreements (Japan, Canada, South Korea)
Global trade leadership
2) power through trade: using market access to influence global governance and export norms.
Regulatory influence: normative power, Brussels effect (environmental and product safety standards, GDPR)
Trade as leverage for political objectives: provisions in trade agreement to complete with labor standard, human rights (generalized scheme preferences for developing countries)
Influence global governance: WTO
Third face of power: the ability to shape the preferences of behavior of other actors
Dual power: ability to influence economic and political outcomes in the international system
EU vs US in the international trade
Shared commitment to free trade …
… clashed
1) regularity frameworks: EU environment and health regulations vs. US market driven approach. Disagreement in GMO, data privacy, product safety standards (EU has banned US genetically modified crops)
2) subsidies and tariffs: unfair trade practices in sector such as agriculture and aerospace. Eg: Boeing US and airbus EUdispute resulting in a series of WTO disputes, trump administration impose tariffs to EU steel and aluminum products (protectionism even with long standing alliances).
3) failed transantlantic trade and investment partnerships: aim to create free trade, reduce barriers and align regulations
2 important regional agreements of the EU
Secure economic benefits and expand political reach and soft power
1) EU-Mercosur: negotiated between EU and Mercosur countries (Argentina, Brazil, Paraguay and Uruguay). AIM was to reduce trade barriers between this 2 regions + geopolitical influence (EU expanding influence to Latin America traditionally dominated by US trade interests. However concerns about environmental (deforestation) and labor standards by some EU members (Ireland and France).
2) Euro-Mediterranean partnerships (Euromed): to create free trade between EU and the Mediterranean region (including North Africa) + geopolitics (development pd these countries and counter migration pressure )
Trade agreements shaping the political influence of the EU
Aim: trade, strategic alliances and extend normative power.
1) EU - ACP (african, Caribbean and pacific) : preferential market access to these countries in exchange of democratic governance, rule of law and human rights. Developmental purpose
2) bilateral trade agreements with ASiA (south corea, Japan and Vietnam. Strengthen geopolitical position counterbalance china’s influence
Trade agreements shaping the political influence of the EU
Aim: trade, strategic alliances and extend normative power.
1) EU - ACP (african, Caribbean and pacific) : preferential market access to these countries in exchange of democratic governance, rule of law and human rights. Developmental purpose
2) bilateral trade agreements with ASiA (south corea, Japan and Vietnam. Strengthen geopolitical position counterbalance china’s influence
Challenges and tensions in the EU trade power
1) Multilateralism vs. regionalism:
Commitment to multilateralism: promoting the establishment of uniform trade rules for all parties through global institutions (WTO - Doha development round)
Shift toward regionalism: slow process of multilateral trade negotiations, faster liberalization though FTA, bilateral and regional (eg. EU Mercosu, CETA with Canada)
Tension between strategies: while regional agreements can deliver faster economic benefits, they risk of fragmenting the global trading system, creating unequal training blocs and potentially weaken the WTO authority, leading to a less coordinated global trade environment
2) non discrimination vs. preferential relations
Most favored nation principle: enshrined in WTO requiere to treat all trading partners equally, creating a non discriminatory global trading system
Preferential trade agreements: generalized system of preferences for developing countries, or EPA with ACP
Developing goals vs. equitable development = trade distortions
3) internal vs external objectives: balancing internal markets goals/protection (common policies in agriculture, environment and consumer protection that may be barriers to trade, EU green deal) with global trade liberalization (open markets and removal of tariff barriers)
EU as a conflicted tarde power
The contradiction arise from the dual nature of the EU’s trade policy, which attempts to balance economic liberalization with normative values (environmental, protection, labor standards and human rights)
-economic liberalization vs. social and environmental protection
- protectionism vs. market openness
-development goals vs. trade liberalization
+ divert interest of member states (economic, agriculture and protectionism , geopolitical priorities)
EU as a conflicted tarde power
The contradiction arise from the dual nature of the EU’s trade policy, which attempts to balance economic liberalization with normative values (environmental, protection, labor standards and human rights)
-economic liberalization vs. social and environmental protection
- protectionism vs. market openness
-development goals vs. trade liberalization
+ divert interest of member states (economic, agriculture and protectionism , geopolitical priorities)
Conditionality
The practice of tying trade agreements to certain non-economic criteria, such as promotion of democracy, human rights and environmental standards (conditionally clauses). Normative power, using trade to exports its values and foster good governance. Controversy effectiveness (resistance from developing countries, paternalistic imposing western values) and ethics (selective and service).
Conditionality can be a powerful roof for advancing democracy and human rights, but its application must be consistent with and carefully managed to avoid unintended negative consequences
