http://orcid.org/0000-0002-9774-7471
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Abstract
The European Union (EU) has successfully negotiated with the Republic of Korea its first free trade agreement (FTA) under the scheme of the 2006 Global Europe strategy. The EU-Korea FTA has triggered a number of changes, including the emergence of a new paradigm of trade-policy-making. While traditional negotiation was dominated by governments and/or executive agencies, a new political constellation has emerged with stronger involvement by other stakeholders, including parliamentary actors and civil society organizations (CSOs). Through a case study of FTA negotiations between the EU and Korea, this paper shows that the new players have gained weight in the process of negotiation both by increasing their influence in regulatory activities (Contentious Market Regulation) and creating effective channels for their involvement in the policy-making process (Feedback Loop). This paper also argues that though the changes that took place in both parties were similar, they have had different roots and dimensions.
Notes
* This paper was supported by a Korea University grant. The author thanks two anonymous referees for their constructive comments.
1. The intra-EU trade of EU member states account for approximately 65% on average, so that the total (intra- and extra-EU) trade volume of EU member states represents more than 40% of total world trade.
2. In fact, the EU has entered into bilateral FTAs earlier with a few countries, including Mexico, Turkey and EFTA countries. The selection of the EU’s FTA partners was seemingly based on strategic and geographical, as well as Europe-related considerations. Before it adopted the ‘Global Europe’ strategy in 2006, however, EU’s trade policy long favored multilateralism to regionalism.
3. See, for example, Messerlin (Citation2012) and Kang (Citation2012).
4. The European Commission (Citation2006), under the title of ‘Global Europe’ strategy, identified the need to strengthen the EU’s efforts for better market access through expanding FTA networks, and designated a few countries as priority FTA negotiation partners, including Korea, ASEAN and MERCOSUR, etc.
5. As argued by Siles-Brügge (Citation2010), the Global Europe strategy of the EU, with its first FTA negotiation with Korea based on it, can be regarded as an event where politics was reinjected into EU trade policy.
6. See, http://ec.europa.eu/trade/policy/countries-and-regions/agreements/#_other-countries (Accessed September 3, 2016).
7. The EU seeks to expand the growth potential by focusing on more ‘market opening and stronger rules in new trade areas of economic importance …, notably intellectual property (IPR), services, investment, public procurement and competition’, as stated in the Global Europe strategy. See European Commission (Citation2006, 8).
8. The European Commission (Citation2015) in its presentation of the most recent trade policy orientation suggested the following three as the most important principles: (i) policy effectiveness; (ii) transparency of trade and investment policy; and (iii) policy based on values.
9. For a similar argument, see Lee-Makiyama and Velschede (Citation2014).
10. For more details, see Lee and Koo (Citation2006).
11. A similar argument can be found in the Joint Feasibility Study (Citation2007, 111–112) which accented the importance of the timing of the completion of the entire negotiation process: ‘… moving first in an FTA with a certain country provides the opportunity of market-share gains in comparison to the main competitors …’.
12. A CGE analysis conducted by Kim (Citation2007) highlighted stronger gains for Korea from an FTA with the EU than with the US, and he argued that Korea could earn an additional 30% gain in terms of long-term GDP growth when Korea negotiated an FTA with the EU, in addition to the Korea-US FTA. The Joint Feasibility Study (Citation2007, 67–87) submitted to the DG Trade of the European Commission provides an excellent overview and commentaries on a number of quantitative estimations conducted before the negotiation was launched, and points to sizeable potential economic gains for both parties from the EU-Korea FTA.
13. For a comprehensive qualitative discussion on the trade-related bilateral regulatory issues, see the Joint Feasibility Study (Citation2007, 59–65).
14. The Joint Feasibility Study (Citation2007, 110–112) also brings into discussion the advantages that could be generated for EU products and firms by the potentially higher level of liberalization than otherwise would be due to the seemingly stronger negotiation power of the US.
15. Elsig and Dupont (Citation2012), applying the principal-agent theory to the EU-Korea FTA negotiations, argue that the European Commission as an agent played a leadership role in the negotiation, which was not substantially different in Korea with its government playing the leading role in trade negotiations. The politicization of FTA negotiations in Korea, which began during the period of Uruguay Round (UR) negotiations, incrementally changed the policy environment, with a result that ‘due procedure’ is now a prerequisite for successful policy implementation. Parliamentary actors and civil society organizations now have a number of opportunities to intervene and intrude into the negotiation process.
16. The position of the Minister for Trade within the Ministry of Foreign Affairs and Trade (MOFAT) was established in 2004 as the chief negotiation officer for the Korean government, which existed until 2013.