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EU Trade Policy

Selected e-articles

Abstract: Since 1999, the EU and the Mercosur countries have negotiated an Association Agreement (AA) which will include a trade pillar, the Free Trade Agreement (FTA). The latter aims at increasing the amount of goods crossing borders, including products associated with high greenhouse gas emissions or having adverse impacts on forests and other valuable ecosystems. This article assesses whether the adoption of the FTA would contravene the EU’s obligations under international law and EU primary law – with a focus on climate protection.

Abstract: The EU trade policy is increasingly confronted with demands for more transparency. This article aims to investigate how transparency takes shape in EU trade policy. First, we operationalize the concept of transparency along two dimensions: a process dimension and an actor dimension. We then apply this framework to analysis of EU Free Trade Agreements (FTAs). After analyzing transparency in relation to FTAs from the perspective of the institutional actors (Commission, Council and Parliament), the different instruments and policies that grant the public actors (civil society and citizens) access to information and documents about EU FTAs are explored by discussing Regulation 1049/2001, which provides for public access to European Parliament, Council and Commission documents, and the role of the European Ombudsman. The article is based on an analysis of official documents, assessments in the academic literature and case-law of the Court of Justice of the European Union. The ultimate aim is to assess current initiatives and identify relevant gaps in the EU's transparency policies. This article argues that the EU has made significant progress in fostering transparency in the negotiation phase of FTAs, but less in the implementation phase.

Abstract: Hanns-Günther Hilpert und Bettina Rudloff, Stiftung Wissenschaft und Politik, sehen die EU-Handelspolitik in einer Nachhaltigkeitsfalle. Die EU verfolge ihre handelspolitischen Ziele zunehmend durch unilaterale und damit einseitig entschiedene Maßnahmen, deren Wirkung sich entlang internationaler Lieferketten bis zum Handelspartner erstrecke, der aber nicht in die Entscheidungsprozesse eingebunden sei. Deren Bereitschaft für Handelsverhandlungen sinke bzw. ihre Forderungen an die EU steigen angesichts der von ihnen oft als neokolonial verurteilten neuen Nachhaltigkeitspflichten als Bedingung für Marktzugang. Mehr Flexibilität und Zugeständnisse der EU seien vonnöten – nicht nur für handelspolitische Allianzen, sondern auch, um Nachhaltigkeitsziele nicht durch selbst verursachte Handelsumkehr zu anderen Märkten hin zu gefährden.

Abstract: EU trade policy increasingly focuses on the achievement of non‐trade policy objectives (NTPOs) such as the promotion of human rights or environmental protection, motivating research on the political economy determinants and effectiveness of linking trade policy and NTPOs. This research reports selected findings from a new expert survey of stakeholder perceptions of trade–NTPO linkages. These suggest that the views of EU institutions align with those of civil society organizations more than with business, but also reveal significant differences in the perceived effectiveness of trade–NTPO linkage strategies. Many stakeholder groups believe that policy instruments other than trade agreements are more effective tools to pursue NTPOs. These findings suggest that further research on EU trade policy and non‐trade issues should consider the broader range of external policy tools available to the EU in pursuit of NTPOs and the determinants of differences in preferences for alternative policy instruments.

Abstract: Since the Lisbon Treaty, the European Parliament (EP) has considerably increased its competencies in European Union (EU) trade policy. At the same time, a ‘new generation’ of free trade agreements (FTAs), including the Transatlantic Trade and Investment Partnership (TTIP) with the United States, Comprehensive Economic and Trade Agreement (CETA) with Canada, and the agreement with Japan, have been negotiated by the European Commission. Although existing literature has tackled the process of the EP's institutional self-empowerment in this policy area, there is no systematic research investigating the lines of conflict within the EP over FTAs. Through a newly collected dataset of all EP plenary debates between 2009 and 2019 on six relevant FTAs, we extract EP Members’ (MEPs) preferences by means of a manual textual analysis. We then test the explanatory power of the two traditional lines of cleavages within the EP over MEPs stated preferences: position on the left-right axis and support for EU integration. We find that both these dimensions fundamentally shape the conflict in the EP over FTAs. The impact of these two ideological cleavages is magnified in the context of politicized FTAs, namely the TTIP and CETA. Through these findings, the paper significantly contributes to the research on competition in the EP and, more broadly, to the understanding of EU trade policy and its emerging politicization dynamics.

Abstract: This article provides an overview of the judgments of the Court of Justice of the European Union (CJEU) regarding EU’s trade defence instruments (TDI) in the year 2022, in particular, with respect to admissibility, dumping, injury and procedural aspects.

Abstract: The outbreak of COVID‐19 in March 2020 led to substantial upheaval in the EU's trade policy. Over the course of a year, EU Trade Policy as a field witnessed the launch of hitherto unthinkable ideas; the proliferation of a range of new buzzwords such as resilience, autonomy, and reshoring; and ultimately the arrival of a new consensus in the Trade Policy Review of February 2021. This article uses a discourse‐theoretical approach (PDT) to retrace the political process that unfolded throughout this year, from the start of the COVID‐19 crisis, to a fundamental dislocation of EU trade politics, and ultimately to the consolidation of a partial, temporary, and frail new hegemony within the policy field. Our goal is to explain the trajectory and the dynamics of this process by studying the discourses, the framings, and the political strategies that comprised the hegemonic struggle underlying it.

Abstract: The EU has famously been described as plagued by a ‘joint decision trap’: Member States are obliged to work together yet have difficulties making comprehensive steps forward given high decision‐making thresholds. This contribution states that against the background of the politicization of European integration, the prospect of a ‘politicized decision trap’ (PDT) emerges, where de facto veto positions develop that cannot easily be accommodated in the spotlight. To account for the observation that deadlock is often avoided, even in the face of visible conflict, the literature on exiting the JDT is rehabilitated by categorizing mechanisms as ‘anticipating’, ‘engaging’ or ‘defusing’ vetoes. Empirically, this framework is applied to EU trade policy, as several EU trade agreements in the past decade were (expected to become) confronted with the PDT, yet experienced remarkable resilience. By reviewing contemporary EU trade literature, various me

Abstract: The EU's Forest Law Enforcement, Governance and Trade Action Plan (FLEGT) adopted in 2003 includes bilateral trade agreements known as Voluntary Partnership Agreements (VPAs) signed between the EU and timber-supplying countries. The EU has invested more than 1.5 billion euros in VPAs; however, only one of the seven concerned countries has managed to complete all the necessary requirements to expire FLEGT licences. Since there is no research that comprehensively integrates the scientific evidence regarding the effects of this policy, this study systematically reviews all empirical scientific studies on the effects of VPAs. We found that almost all relevant studies are case reports that use qualitative data and focus on only one country at a time, mainly Ghana, Cameroon, or Indonesia. The evidence suggests that while VPAs have contributed to the establishment of governance structures, tools, and procedures they have not been able to solve social problems (i.e., inequality and injustice) and have potentially harmed the economies of EU timber suppliers. Evidence on the effects of VPAs on illegal logging and trade and the environment remains limited. Thus, future research should focus on more countries; use a greater range of methods, including comparative experimental designs; explore possible intended effects on under-researched categories; and systematically investigate unintended effects on other categories within and outside the forestry sector. •We reviewed the literature on the effects of FLEGT Voluntary Partnership Agreements.•These are bilateral trade agreements between the EU and timber-supplying countries.•Most studies are case reports using qualitative data, focusing on one country at a time.•VPAs can contribute to the establishment of governance structures tools, and procedures.•VPAs are not able to solve social problems and can even harm the economy.

Abstract: In September 2022, the Commission adopted a proposal for a Regulation on prohibiting products made with forced labour on the Union market. This arises in a context of rising concern over many years about breaches of workers’ fundamental rights and core standards of the International Labour Organization in supply chains of products that are marketed in Europe, particularly where multinational corporations have offshored production to states without the high labour standards enforced in the EU. There has also long been widespread concern, particularly from trade unions, that such offshoring enables manufacturers to undercut labour protections of European workers. Furthermore, the offshoring of manufacturing has enabled certain third countries to develop their industrial and technological capacities in ways that create geostrategic risks for the EU and its Member States, as these third countries become ‘systemic rivals’ of the Union. First, this article argues that the proposed Regulation fits with Anu Bradford's theory of the ‘Brussels Effect’ exposited in her 2019 book of that name, and that the Union should take advantage of Bradford's insights in developing the Regulation and future legal instruments. Bradford established the Brussels Effect as an empirical reality; this article makes a normative case that, in this instance, the EU institutions should actively embrace it as a means to advance its goals. The proposed Regulation is an example of the Union leveraging market power to accomplish normative goals, by exporting its values to third countries. This offers room for the EU to be a force for good in the world, answering some of the qualms raised in Bradford's work about the potential ‘imperialism’ of the Brussels Effect. The present article argues the Union should go further, try to ‘externalise’ more of the social acquis in the field of labour law, leveraging its international market power to both improve labour standards around the globe. This article challenges Bradford's original contention that the Brussels Effect does not apply to labour standards, arguing instead that it is possible, and normatively desirable, for the Union to follow this Regulation with a broader suite of measures aimed at globalising European labour standards, with benefits for both third-country nationals and citizens of the Union. Second, the article links the proposed Regulation to concern about the geostrategic vulnerability of Member States and the Union as a whole, where essential products are manufactured in third countries. This became apparent during the Covid-19 pandemic, with many critical supplies predominantly manufactured outside the Union. The ‘strategic autonomy’ agenda of the EU implies re-shoring of important industry, which is more easily accomplished where EU regulation lessens the ability of third countries to undercut the EU with low labour standards. This will have long-term economic benefits for the Union and its citizens, as well as depressing the potential for systemic rivals to the Union to develop their industrial and technological capacities at the expense of the Union and its Member States, and deprive governments that disregard fundamental rights of workers of revenues from investment, manufacturing and exports to the Union.

Abstract: This paper analyses the effect of trade policy uncertainty in a customs union on export‐platform foreign direct investment (FDI). First, I develop a partial equilibrium framework with heterogeneous firms based on the proximity–concentration trade‐off that involves trade policy uncertainty about trade costs inside a customs union. Second, I derive an empirical equation that I test by exploiting the 2016 Brexit referendum as a natural experiment and using data on manufacturing greenfield FDI projects. The results show that trade policy uncertainty impacted negatively the decisions of firms to invest in export‐platform activities in the UK following the Brexit referendum. Moreover, I find that extra‐EU manufacturing firms preferred EU countries as opposed to the UK for new investments after the 2016 referendum.

Abstract: Using firm-level export and import transactions and by applying an event study methodology, we quantify the impact of the UK’s withdrawal from the EU’s single market and customs union on Spain–UK trade flows. We find that Spanish exports and imports to the UK decreased by 24% and 27%, respectively, compared to the period before the Brexit referendum. The probability of Spanish exporters and importers starting a trade relationship with the UK decreased and the probability of ending one increased. Products subject to sanitary and phytosanitary measures, stringent rules of origin, and whose technical standards had not been harmonized before disintegration experienced a stronger decline in trade flows. Large firms faced a more severe decreas

Abstract: In the final days of 2020, the European Union and the United Kingdom concluded a Trade and Cooperation Agreement (TCA) covering a broad range of policy areas, including cooperation of law enforcement authorities and social security systems. The EU-UK TCA is unique as concerns the circumstances of its negotiation and adoption, as well as its substance. However, contrary to the argument of the EU institutions, the agreement will have broad implications for the understanding of the EU's external competence and Member States’ ability to act in areas that are national competence and rely on national budgets. We are critical of the legitimacy of the TCA's conclusion process, consider that the lack of a deep constitutional analysis of the consequences of EU-only conclusion of the TCA, and of the TCA itself, are problematic, and believe that the choices made are likely to create difficulties for the implementation and enforcement of the agreement.

Abstract: Depuis le début des années 2010, une série de nouveaux accords ou de processus de négociations commerciaux entre de grands blocs géographiques ont émergé dans le monde. L’Union Européenne (UE) et les États-Unis ont à ce titre joué un rôle de premier plan dans ces initiatives et dans leurs proliférations. Face à l’impact grandissant de la globalisation sur le quotidien des citoyens, les assemblées législatives tendent à s’impliquer progressivement dans ces processus diplomatiques et à gagner en importance et en visibilité dans leur fonction vis-à-vis de ces accords. Si bien qu’aujourd’hui, toute personne s’intéressant de près ou de loin à l’étude des accords commerciaux ne peut plus ignorer le rôle qu’y jouent les parlements des États impliqués dans ces processus. Les négociations du Partenariat Transatlantique de Commerce et d’Investissement (TTIP), de l’Accord Économique et Commercial Global (CETA) et de l’Accord de Partenariat Transpacifique (TPP) représentent ainsi de bons indicateurs du rôle, des atouts et des limites que les interventions d’un parlement dans un processus de négociation peuvent rencontrer en fonction du contexte politique ou institutionnel et de l’appui de l’opinion publique. Le Parlement européen et le Congrès américain constituent respectivement des assemblées législatives relativement puissantes, représentant un nombre de citoyens conséquent et ayant d’importantes prérogatives constitutionnelles ou institutionnelles en matière commerciale, mais évoluant dans des cadres significativement différents. Via leurs outils institutionnels et à travers des pressions formelles et informelles de la part de ces deux pouvoirs législatifs, les exécutifs se retrouvent souvent contraints de prendre en compte certaines revendications des parlementaires faisant voix aux revendications d’une partie de la société civile. À défaut, le risque de voir une négociation échouer faute de ratification de l’accord par le pouvoir législatif est important. Néanmoins, l’influence du pouvoir législatif n’est pas la même pour chaque négociation et le contexte de celle-ci va dès lors jouer un rôle important pour en déterminer l’amplitude et la visibilité d’une assemblée dans ces différents processus.

Abstract: This paper examines how EU-China trade affected intraEU trade. The estimation shows that when a country’s share of trade with China increased, its share of trade with EU partners declined. This suggests that stronger trade links with China resulted in weaker trade links among EU countries. Furthermore, the “disintegration” effect of the export to China was stronger than that of import from China, meaning that the influence of China as an export destination was greater than that of China as a source of import. An extended analysis shows that the disintegration effect was most strongly felt in trade links among EU core countries, less strongly felt in trade links between EU core and periphery countries, and least strongly felt in trade links among EU periphery countries. In comparison, we find that EU import from the United States and India significantly weakened and strengthened intra-EU trade, respectively. Estimation results using product level data demonstrate that the effects depend on the types of products we are concerned with. Whether using gross value or value added, the conclusions remain valid.

Abstract: This article examines imports by Swedish firms and the utilization of the tariff preferences offered by the EU–South Korea Free Trade Agreement. To benefit from tariff preferences, the importer must make a formal request to use the preferences and also document the origin of the imported products (with a certificate of origin provided by the foreign exporter). This may be costly, and some importers choose to pay import tariffs even when tariff preferences are available. Hence, the preferences are not fully utilized. Using a detailed firm–transaction level data set on Swedish imports from South Korea, we analyse the determinants of preference utilization and how firms learn to use preferences. The results show that preference utilization is strongly correlated with potential duty savings, which depend on the preference margin and the size of the import transaction. From a learning perspective, we find that preference utilization is closely related to the number of import transactions undertaken by the firm, suggesting a learning-by-doing mechanism. The length of time the firm has been involved in importing activities plays a smaller role.

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