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Domestic Politics in EU External Economic Relations: US-EU Competition in Trade

Part of the Global Power Shift book series (GLOBAL)

Abstract

The European Union (EU) is a key player in international trade relations with its foreign trade policy having a great influence on shaping the international political economy. EU trade policy, however, is equally shaped in response to the trade policies of other actors. Especially EU-United States (US) trade relations are crucial to analysing the EU as a global power in the making. Since the mid-1990s, the EU has concluded free trade agreements (FTAs) with several emerging markets. The first FTA accomplished was with Mexico; its latest FTA concluded was with the Republic of Korea. What drives the EU to accomplish FTAs with some emerging markets and not others? To explain this puzzle a liberal or societal approach will be proposed including two explanatory variables. The first variable draws attention to the global economic context within which EU foreign trade policy is rooted thereby highlighting in particular US-EU competition in trade. The second variable focusses on economic interests dominant in the domestic politics of EU member states. This will be illustrated by a short analysis of the EU-Mexico FTA.

Keywords

  • European Union
  • Trade Policy
  • Trade Liberalisation
  • North American Free Trade Agreement
  • Trade Negotiation

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

I am very grateful to Astrid Boening, Yuan-Juhn Chiao, Michael Franke, Jan-Frederik Kremer, Stefan Schirm, Katerina Smejkalova, André van Loon, Vanessa Vaughn and the participants of the ‘Forschungs- und Abschlusskolloquium’ for their helpful input, comments and/or suggestions on earlier drafts of this chapter.

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Notes

  1. 1.

    FTAs are defined as legally binding arrangements between two or more countries, through which these countries give each other preferential treatment in trade that eliminates trade protection among members. At the same time, each member keeps its own tariff structure in trade with third countries. Regional Trade Agreements (RTAs), Preferential Trade Agreements (PTAs) or FTAs are often synonymously applied to describe trade liberalisation on a regional or bilateral basis. For the purpose of consistency, the term FTA will be used throughout this chapter.

  2. 2.

    Thereby making exemptions to the non-discrimination and most-favoured-nation (MFN) principles of the WTO.

  3. 3.

    For more information on why FTAs have proliferated see Heydon and Woolcock 2009, p. 6 and Mansfield and Reinhardt 2003, p. 830.

  4. 4.

    See also: http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/united-states/ (Accessed February 20, 2012).

  5. 5.

    Original emphasis.

  6. 6.

    http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Co untry = E27 (Accessed May 27, 2012).

  7. 7.

    In contrast or in addition to the EU being a normative power (Manners 2002; Sjursen 2006).

  8. 8.

    See http://eeas.europa.eu/association/docs/agreements_en.pdf (Accessed February 18, 2012).

  9. 9.

    The EU also granted preferential trade conditions either for historical or development motivations to the ex-colonial states of the Africa Caribbean and Pacific (ACP) countries. These preferential trade conditions were however granted on a unilateral and not on a reciprocal basis (Burckhardt 2013).

  10. 10.

    Besides these political considerations, simultaneously offering EU market access within the context of FTAs also promoted economic stability as economic opportunities stimulated growth within these respective countries.

  11. 11.

    According to Feinberg these two countries were “special cases” and selected as FTA partners due to Israel being a strategic ally and Canada due to its geographic proximity (Feinberg 2003, pp. 1020–1021; Barfield 2007, p. 240; Rosen 2004, p. 50–77).

  12. 12.

    In this chapter, domestic interest associations fulfil the three key requirements (organisation, political interest and informality) of interest groups set out by Eising (2009, p. 4). Specifically, these actors are organised, seek to influence trade policy outcomes and are generally not interested in holding office themselves. As such, both the terms interest associations and interest groups will be used interchangeably.

  13. 13.

    Also referred to as the Council of the European Union.

  14. 14.

    Also, with regard to trade negotiations, although the CoM’s voting procedure has been amended several times by subsequent treaties and most issues are now subsequently no longer dealt with by unanimity but by qualified majority voting, in practice the unanimity is still applied. Equally this implies that the Commission is tightly constrained with regard to decision-making concerning trade negotiations.

  15. 15.

    A FTA with the EU however was high on the agenda on Mexico’s 1995 national 5-year development plan http://zedillo.presidencia.gob.mx/pages/pnd.pdf (Accessed August 10, 2011).

  16. 16.

    This reflected the Tequila currency crisis as well as the Asian currency crisis as well as NAFTA discrimination (Preuße 2000, p. 29).

  17. 17.

    Chile was also interested in joining NAFTA.

  18. 18.

    NAFTA parity meant an introduction of a schedule of tariff reductions with the main aim that it would support European exporters to re-establish equal conditions and liberalise access for its exports to Mexico by the same year as the US and Canada (Dür 2007, pp. 843–844).

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van Loon, A. (2013). Domestic Politics in EU External Economic Relations: US-EU Competition in Trade. In: Boening, A., Kremer, JF., van Loon, A. (eds) Global Power Europe - Vol. 1. Global Power Shift. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-32412-3_13

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