The EU has negotiated numerous bilateral trade agreements with countries around the world during the last two decades. As we move into 2020, Patrick Leblond and Crina Viju-Miljusevic take stock of the changes that have occurred in EU trade policy in the twenty-first century and highlight some key future research agendas

Leblond, Patrick

Viju-Miljusevic, Crina

English

LSE Research Online

Understanding EU trade policy in the twenty-first centuryLSE Research Online URL for this paper: http://eprints.lse.ac.uk/103367/Version: Published VersionOnline resource:Leblond, Patrick and Viju-Miljusevic, Crina (2019) Understanding EU trade policy in the twenty-first century. LSE European Politics and Policy (EUROPP) blog (16 Dec 2019). Blog Entry. lseresearchonline@lse.ac.ukhttps://eprints.lse.ac.uk/ ReuseItems deposited in LSE Research Online are protected by copyright, with all rights reserved unless indicated otherwise. They may be downloaded and/or printed for private study, or other acts as permitted by national copyright laws. The publisher or other rights holders may allow further reproduction and re-use of the full text version. This is indicated by the licence information on the LSE Research Online record for the item.Understanding	EU	trade	policy	in	the	twenty-firstcenturyThe	EU	has	negotiated	numerous	bilateral	trade	agreements	with	countries	around	theworld	during	the	last	two	decades.	As	we	move	into	2020,	Patrick	Leblond	and	CrinaViju-Miljusevic	take	stock	of	the	changes	that	have	occurred	in	EU	trade	policy	in	thetwenty-first	century	and	highlight	some	key	future	research	agendas.Over	the	last	20	years,	the	European	Union	(EU)	has	conducted	an	active	trade	policy,negotiating	a	multitude	of	bilateral	trade	agreements	and	being	strongly	involved	in	negotiations	at	the	World	TradeOrganisation	(WTO).	It	has	also	expanded	the	scope	of	the	trade	agreements	that	it	negotiates,	with	regulatorycooperation,	labour	and	environmental	standards,	investment,	government	procurement	and	competition	policy	nowcore	features	of	such	agreements.The	comprehensive	nature	of	the	EU’s	trade	agreements	has	raised	concerns	among	politicians,	non-governmentalorganisations	(NGOs)	and	the	general	public	about	the	state’s	ability	to	regulate	economy	and	society	according	todemocratic	principles	and	process:	they	fear	that	such	agreements	provide	even	more	privileges	to	business	thanbefore,	thereby	exacerbating	the	costs	associated	with	globalisation.As	a	result,	the	EU’s	trade	policy	has	become	more	politicised.	This	was	certainly	best	exemplified	by	the	high-profile	cases	of	the	Comprehensive	Economic	and	Trade	Agreement	(CETA)	with	Canada	and	the	TransatlanticTrade	and	Investment	Partnership	(TTIP)	with	the	United	States.	However,	this	politicisation	is	not	consistent	and,in	fact,	has	been	quite	limited.As	Sophie	Meunier	and	Rozalie	Czesana	point	out,	politicisation	of	trade	deals	in	Europe	varies	over	time,	acrossnegotiations	and	across	member	states.	For	instance,	trade	relations	with	the	United	States	have	been	much	morecontested	by	the	public	than	relations	with	China	and	Russia.One	might	think	that	the	scope	of	the	agreement	being	negotiated	would	determine	the	degree	of	politicisation	but,as	the	EU’s	recent	trade	agreements	with	Japan	and	Mexico	show,	this	is	not	the	case.	Other	factors	are	at	play:values,	identity,	culture,	institutions,	economic	competition	and	new	technologies.	For	example,	Francesco	Duinaargues	that	trade	politicisation	relates	to	the	fundamental	values	and	identities	associated	with	particular	EU	tradeagreements	(e.g.,	food	quality	and	traditions,	consumer	health,	the	environment,	or	animal	rights),	depending	onthe	scope	of	their	provisions.Shinzo	Abe	with	Donald	Tusk	at	the	EU-Japan	Summit	in	Brussels,	2017.	The	EU	and	Japan	agreed	in	principle	to	an	EconomicLSE European Politics and Policy (EUROPP) Blog: Understanding EU trade policy in the twenty-first century Page 1 of 3		Date originally posted: 2019-12-16Permalink: https://blogs.lse.ac.uk/europpblog/2019/12/16/understanding-eu-trade-policy-in-the-twenty-first-century/Blog homepage: https://blogs.lse.ac.uk/europpblog/Partnership	Agreement	during	the	summit,	which	subsequently	came	into	force	in	February	2019.	Credit:	European	CouncilPresident	(CC	BY-NC-ND	2.0)In	response	to	this	perceived	politicisation,	the	EU	has	attempted	to	make	trade	agreements	and	negotiations	moretransparent.	For	instance,	the	European	Commission	has	implemented	a	series	of	changes	such	as	publishingexplanatory	documents,	textual	proposals	and	third-party	correspondence,	as	well	as	making	public	results	ofmeetings	with	stakeholders	and	policy	officials.The	EU	has	also	been	looking	at	ways	in	which	it	can	make	such	agreements	more	‘progressive’	by	finding	theappropriate	balance	between	obstacle-free	trade	and	the	so-called	‘right	to	regulate’	(e.g.,	to	protect	theenvironment	or	labour	rights,	even	if	such	regulation	creates	obstacles	to	trade),	in	order	to	address	people’sconcerns	and	make	‘free	trade’	more	legitimate	and	acceptable	politically.Perhaps	surprisingly,	the	EU’s	policy	response	to	the	perceived	politicisation	of	trade	policy	does	not	actuallyrepresent	a	major	shift	from	previous	trade	strategies.	As	Alasdair	Young	argues,	the	‘balanced’	elements	of	theEU’s	new	trade	strategy	are	related	to	ensuring	that	trade	partners	respect	their	obligations	and	unfair	practices	areaddressed,	while	the	‘progressive’	elements	are	focused	on	defending	and	exporting	EU	regulations	and	norms,increased	transparency	of	negotiations	and	implementing	a	new	framework	for	screening	foreign	direct	investment.But,	as	Young	notes,	this	approach	is	not	significantly	different	from	what	the	EU	has	done	in	the	past,	which	is	whyhe	concludes	it	will	ultimately	have	limited	impact	on	reducing	politicisation,	when	and	where	it	occurs.The	varying	degree	of	politicisation	in	EU	trade	policy	is	not	the	only	consequence	of	the	structural	changes	tointernational	trade	that	have	occurred	in	the	21st	century,	such	as	the	rise	of	global	value	chains	(GVCs),	the‘servicification’	of	trade,	and	digitisation.	Given	the	importance	of	GVCs	for	its	economy,	it	is	important	for	the	EUthat	international	trade	rules	are	respected	and	improved	so	that	borders	remain	open	to	goods,	services,	capital,ideas	and	data/information.The	EU’s	relative	trade	bargaining	power	is	thus	particularly	important,	especially	at	a	time	when	the	WTO	is	facingan	existential	crisis	as	a	result	of	the	United	States	blocking	the	appointment	of	new	members	to	the	AppellateBody	and	invoking	national	security	as	a	reason	for	adopting	protectionist	measures.However,	GVCs	may	not	matter	much	for	the	EU’s	bargaining	power	when	dealing	with	major	economic	partnerssuch	as	China	and	the	United	States,	whose	governments	are	currently	challenging	existing	trade	rules	to	promoteGVC	network	domination	by	their	country’s	firms	–	on	a	regional	(if	not	global)	basis,	most	especially	in	high-techsectors	associated	with	the	digital	economy.	As	Anke	Schmidt-Felzmann	demonstrates	in	her	analysis	of	the	EU’strade	and	energy	relations	with	Russia	over	the	last	two	decades,	the	EU’s	ability	to	influence	the	standards	andpractices	of	an	important	economic	partner	remains	limited.Finally,	in	an	era	of	deep	and	comprehensive	‘third	generation’	trade	agreements,	trade	politics	and	policy	do	notend	when	an	agreement	has	been	reached.	The	implementation	of	trade	agreements	has	become	a	major	issue.When	agreements	were	focused	mainly	on	tariffs,	implementation	was	easy:	customs	administrations	just	had	topublish	new	tariff	schedules	on	the	day	the	agreement	came	into	effect.	As	a	result,	once	such	agreements	weresigned,	politicians,	bureaucrats	and	businesses	moved	on.This	is	no	longer	the	case.	Agreements	with	provisions	on	regulatory	and	administrative	matters	require	significantand	sustained	cooperation	between	the	parties	to	the	agreement	if	the	latter’s	benefits	are	to	be	realised.Agreements	must	therefore	plan	for	such	cooperation	to	take	place	once	the	agreement	has	come	into	force.Institutional	mechanisms	have	to	be	devised	to	ensure	that	cooperation	and	coordination	occurs.With	new	trade	agreements	being	increasingly	about	regulatory	cooperation,	it	is	crucial	to	understand	how	suchagreements	are	implemented	once	they	have	come	into	force.	If	there	are	differences	in	the	degree	(or	quality)	ofimplementation	between	agreements	and/or	between	the	EU	and	its	trade	partners,	it	is	important	to	know	why	thatis	the	case.	The	study	of	trade	agreement	implementation	should	thus	also	be	added	to	the	research	agenda	for	EUtrade	policy	in	the	twenty-first	century.For	more	information,	see	the	authors’	accompanying	paper	at	the	Journal	of	European	Public	PolicyPlease	read	our	comments	policy	before	commenting.LSE European Politics and Policy (EUROPP) Blog: Understanding EU trade policy in the twenty-first century Page 2 of 3		Date originally posted: 2019-12-16Permalink: https://blogs.lse.ac.uk/europpblog/2019/12/16/understanding-eu-trade-policy-in-the-twenty-first-century/Blog homepage: https://blogs.lse.ac.uk/europpblog/Note:	This	article	gives	the	views	of	the	authors,	not	the	position	of	EUROPP	–	European	Politics	and	Policy	or	theLondon	School	of	Economics._________________________________About	the	authorsPatrick	Leblond	–	University	of	OttawaPatrick	Leblond	is	Associate	Professor	and	CN-Paul	M.	Tellier	Chair	on	Business	and	Public	Policy	inthe	Graduate	School	of	Public	and	International	Affairs	at	the	University	of	Ottawa,	Canada.	Hisresearch	interests	focus	on	financial	and	monetary	integration,	financial	regulation,	international	tradepolicy,	and	business-government	relations.Crina	Viju-Miljusevic	–	Carleton	UniversityCrina	Viju-Miljusevic	is	Associate	Professor	in	the	Institute	of	European,	Russian	and	Eurasian	Studiesat	Carleton	University,	Canada.	Her	research	interests	include	the	economic	effects	of	different	tradepolicies	applied	within	the	EU,	US	and	Canada,	European	economic	integration,	economies	intransition	and	EU	enlargement.LSE European Politics and Policy (EUROPP) Blog: Understanding EU trade policy in the twenty-first century Page 3 of 3		Date originally posted: 2019-12-16Permalink: https://blogs.lse.ac.uk/europpblog/2019/12/16/understanding-eu-trade-policy-in-the-twenty-first-century/Blog homepage: https://blogs.lse.ac.uk/europpblog/

Understanding EU trade policy in the twenty-first century

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Understanding EU trade policy in the twenty-first century

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