Constructing European Union Trade Policy

In the previous chapter I showed how much of the literature on EU trade policy has tended to work with an implicit acceptance that the EU is somehow an ‘exceptional’ entity as a result of its institutional structure, with the latter seen as the main factor explaining EU trade policy. This body of work, I argued, struggled to explain the timing and content of the EU’s preferential trade strategy, which increasingly resembled that of its principal commercial rivals. In this chapter, my aim will be to arrive at a theoretical framework that draws on a broader literature in IPE in order to explain these developments. This framework is developed in two steps. I begin by considering a rationalist IPE literature which has emphasised the important ‘domestic-societal’ and ‘systemic’ drivers of preferential trade liberalisation. I argue that recent strands of this literature (in particular Manger 2009), seeking to combine insights from both ‘levels of analysis’, represent an improvement on rational institutionalism in that they draw attention to important features of the current wave of North-South preferential liberalisation of which the EU is a participant. Following on from this, my second purpose in this chapter is to show that, although the mainstream IPE literature begins to answer some of the questions raised in this volume regarding the EU’s preferential trade strategy, it still does not appreciate the important role of ideas in trade policymaking.

‘Global Europe’ was the defining document in EU trade policy from 2006 until late 2010, when it was superseded by the 2010 ‘Trade, Growth and World Affairs’ strategy (see Chapter 6). After the long strategic lull that followed the failure of the EU’s ambitious Doha agenda at Cancún — and given the increasing perception after the 2005 Hong Kong Ministerial that the Doha Round was moribund — it announced an end to the moratorium on FTAs and a more activist trade policy premised on securing market access for exporters through FTAs. Although clearly bearing the imprint of Trade Commissioner Peter Mandelson under whose watch it originated, ‘Global Europe’ shaped EU trade policy beyond his tenure. It did so most visibly in terms of the trade agreements it spawned but also, and very importantly, by forming a key part of an emerging neoliberal trade order with clear antecedents in the SMP. In both senses, it became a key strategic reference point for officials working in DG Trade and also played a major role in shaping its successor, the post-Lisbon Agenda ‘Europe 2020’ trade strategy. One cannot, therefore, understand the drivers of the EU’s recent (preferential) trade agenda without first charting the rise of ‘Global Europe’.

In October 2009, after a series of controversial talks, the EU and South Korea initialled (provisionally signed) the FTA they had been negotiating for just over two years. The agreement was then approved by the Member States in October 2010, ratified by the EP in February 2011 and implemented in July 2011. The importance of the EU-Korea FTA lies in that it serves as the most visible expression so far of the ‘Global Europe’ communication and is widely held up as the EU’s most ambitious trade agreement to date (see, for example, European Commission 2013c). As I noted in Chapter 3, ‘Global Europe’ emphasised negotiating bilateral trade agreements containing strong regulatory and services provisions with emerging East and South Asian economies. It also implicitly targeted Europe’s few remaining pockets of protection, seeking reciprocal concessions where EU firms were competitive. In both of these respects, the EU-Korea FTA is a case in point, obtaining substantial gains for European service suppliers and investors in South Korea in exchange for a significant opening of the automobile sector, still reeling from the effects of the economic crisis.

In ‘Global Europe’ the Commission was careful to distinguish between Europe’s ‘ain trade interests’ predominantly in East and South Asia, and its trade agreements with the ACP — seen as the flagship of its development policy — which supposedly served ‘evelopment objectives’ (European Commission 2006g:10–11). Since ‘lobal Europe’- and although arguably this is not an entirely novel development as commercial considerations have played a role in EU-ACP relations in the past — it has become increasingly difficult to disentangle the EU-ACP relationship from the EU‘wider ’ommercial’trade relations. After a period of relative neglect under Lamy, Mandelson’s DG Trade strongly insisted for the new EPAs being negotiated with ACP states — what amount to ‘symmetrical’¹ FTAs featuring a development assistance component which replace the EU’s previous Lomé regime of non-reciprocal trade preferences — to feature ‘WTO-plus’, regulatory liberalisation provisions; this is notwithstanding the fact that the original justification given for these agreements was one of WTO compliance, as Lomé was judged to be in contravention of multilateral trade rules (see Heron 2013: Ch. 2). These provisions, in turn, have borne a striking resemblance to the texts of several of the EU’s ‘Global Europe’ FTAs.

Earlier in the book, I provided a glimpse into the EU’s trade policy after the start of the Financial Crisis by focusing on the signature and ratification of the first ‘Global Europe’ FTA, signed with South Korea in 2010. The aim in this chapter is to provide more detailed analysis of how the ‘Global Europe’ offensive trade agenda of free trade negotiations has developed in what many consider the most significant economic downturn since the Great Depression. In the aftermath of the 2008 Financial Crisis and given the unfolding Eurozone Crisis, the greatest perceived threat in the eyes of EU trade policymakers has been the potential for protectionist tendencies to develop, as these threaten not only the EU’s offensive trade agenda but also the liberalism of its import policies. This has been rendered all the more significant by the rise of the EP as an actor in the EU trade policymaking machinery as, in the eyes of some, it might contribute to politicising a previously ‘insulated’ EU policymaking arena (for example, Woolcock 2008: 5).

The main argument in this book has been that trade is what actors make of it; ‘a global idea of Europe’ has been reproduced by actors and has led to an increasingly neoliberal orientation in EU trade policy. The more specific aim I set up in the introduction was to address three separate, albeit interrelated, research puzzles raised by conventional understandings of (EU) trade policy. Firstly, I was interested in why the EU adopted a preferential trade strategy at the time that it did. Secondly, I wanted to explore why this strategy was premised on trading away protection for market access and how the EU’s trade negotiators in DG Trade were able to achieve this, particularly at a time of economic crisis and against the opposition of powerful sectoral interests. Finally, I sought to explore the reasons behind the increasing entwinement of the EU’s ‘commercial’ and ‘developmental’ trade agendas. Deliberately eschewing institutionalist and purely rationalist IPE approaches, I arrived at a constructivist IPE explanation.