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Abstract
In 1991, in the midst of the program to create a liberal Single European Market and in the context of a new Joint Declaration for cooperation with Japan, the European Commission brokered a private deal to restrict Japanese imports into the European Community for nearly a decade (1993–1999). These ‘Elements of Consensus’ developed from the collective efforts of European automakers and their business interest associations – the CCMC and ACEA – to shape the Community’s Common Commercial Policy and insulate themselves from the threat of Japanese competition. Drawing evidence from archival documents, this article reconstructs how European automakers lobbied the Commission for protections and how the Commission used these protections as a means for regional market liberalisation. As a result, it contributes new dimensions to scholarship on the influence of corporations in politics in general and the relationship between business and European integration in particular.
Acknowledgements
Neil Rollings, Janick Schaufelbuehl, and Pierre Eichenberger provided invaluable feedback on early drafts of this article, as did Ulrich Krotz, Federico Romero, and participants at the Europe in the World seminar at the European University Institute’s Robert Schuman Center for Advanced Studies in May 2019, the Swiss History Days Conference in Zurich in June 2019, and the Department of Social and Political Sciences Seminar at Bocconi University in January 2020. This article also benefitted greatly from the constructive comments offered by anonymous reviewers. Sebastian Majstorovic facilitated the archival access crucial for revisions of this work, and Harvard Business School offered an ideal institutional environment in which to finalize the text.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 The Commission began to shift its foreign policy approaches in the wake of the Single European Act. It launched industrial cooperation initiatives with Japan which contrasted sharply with the trade disputes of previous years.
2 Commission of the European Communities, ‘Joint Declaration on Relations between the European Community and its Member States and Japan’, The Hague, 18 July 1991.
3 Steven Greenhouse, ‘Issues Linger in Europe’s Japan Auto Pact’, New York Times, 12 August 1991.
4 Rainer Eising also makes the argument that ‘associations with narrower interest domains’ are ‘more efficient actors’. See: Eising (Citation2013, p. 68). For more on the landscape of lobbying in Brussels, see: Greenwood (Citation2003).
5 The foundation for this matrix was developed by: Olson (Citation1965) and Streeck and Schmitter (Citation1981, Citation1999).
6 Several scholars have contributed to scholarship on the role of BIAs, including: Green Cowles (Citation1995), David and Eichenberger (Citation2020), Pitteloud Citation2020, Rollings and Kipping (Citation2008), and Galambos (Citation1966).
7 This tension between free trade and protectionism permeated Commission debates about EC industrial and competition policies. For more on EC competition policy, see: Laurent Warlouzet (Citation2012). Ramírez Pérez also addressed the dichotomy between ‘Europe dirigiste’ and ‘Europe libérale’ in ‘Anti-trust ou Anti-US’ (Citation2006, p. 203), and in (Citation2008).
8 This growing area of research includes work by: Rollings and Warlouzet (Citation2020), Ramírez Pérez (Citation2020), Drach (Citation2020), Rollings and Moguen-Toursel (Citation2012); Rollings (Citation2007), and Jones and Miskell (Citation2005).
9 Others have argued that the Commission had to ‘sell’ carmakers on the proposed accord and that the EOC was ‘a state-dominant process’. See: Mason (Citation1994, p. 442).
10 Ferguson et al. (Citation2011). Laurent Warlouzet also used this framing to examine the European response to globalization in Chapter 1 of his Governing Europe in a Globalizing World (2018).
11 For more analysis of Japanese industrial policy and an explanation of the Japanese ‘miracle’, see: Johnson (Citation1982).
12 European technology firms also appealed to the Commission for regional coordination of R&D to compete with Japan.
13 After the ‘American challenge’ of the 1950s during which major American car companies globalized, the United States became a net importer of automobiles and its trade imbalance surged during the 1970s and 80s.
14 This is according to studies conducted by the International Motor Vehicle Program at the Massachusetts Institute of Technology. For more, see: Jones (Citation1991).
15 Commission of the European Communities, ‘The European Motor Vehicle Industry: Situation, Issues at Stake, and Proposals for Action’, COM(92) 166 final, (Brussels, 8 May 1992): 2.
16 The Organization of International Automobile Constructors (OICA) (1955), the Liaison Committee of the Automobile Industry of the Countries of the European Communities (CLCA) (1958), the European National Car Federation, and the European Association of Manufacturers had all formed around issues of technical regulations.
17 While European automakers saw the development of common technical specifications as a way to block foreign competition, the Commission supported – and in this early period even initiated – the formation of common standards, which advanced its goal of internal market integration.
18 Volkswagen wanted to ensure that its domestic competitor would be subject to the same standards as they and not be in a position to negotiate separately with either the West German state or the EC.
19 Archive of European Integration (AEI): CAB/VII/130/73: ‘Report on the Future of Europe at the Meeting of the Istituto Affari Internazionali’, by Alterio Spinelli, Rome, 21-24 November 1973. For more on auto standards in the EC, see: Mougen-Toursel (Citation2008a, Citation2008b).
20 European Parliament: ‘Report Drawn Up on Behalf of the Committee on External Economic Relations on Imports of Japanese Cars into the EEC’, Document 1-997/82, 15 December 1982. [‘Filippi Report’] Archive of European Integration, p. 25.
21 Filippi Report, 27–29.
22 Ironically, it was in the Tokyo Round of the GATT, 1973-1979, that signatories moved to revise Article XIX with a view to increased liberalization, but the round ended with no change to the Article. For more on the VRA and its comparison with GATT provisions, see: Kurey (Citation1986, p. 60).
23 Historical Archives of the European Union (HAEU): KM-257: ‘Mr. De Clercq’s Reaction on Japanese Tariff Moves’, IP(85)291, undated.
24 HAEU: KM-257: Press and Information Service, Tokyo, ‘Nakasone, Delors agree on creation of committee to monitor Japan’s effort to import’, Sankei Shimbun, 22 January 1986.
25 HAEU: PSP-11: Commission of the European Communities, ‘Commission Agenda – External Relations (GATT)’, from David O’Sullivan to Commissioner Sutherland, (5 March 1985): 1.
26 This G7 meeting included France, West Germany, Japan, Canada, the US, and the UK. Italy, the seventh member of the group, declined to sign the agreement.
27 AEI: A6170: European Parliament, Committee on Economic and Monetary Affairs and Industrial Policy, ‘The Automobile Industry in the Community’ (1985), 90.
28 Ibid., 97.
29 AEI: A6170: European Parliament, ‘The Automobile Industry in the Community: Evidence given on the European Automobile Industry for the hearing organized by the Committee on Economic and Monetary Affairs and Industrial Policy’ (1985).
30 AEI: A6170: European Parliament, Committee on Economic and Monetary Affairs and Industrial Policy, ‘The Automobile Industry in the Community’ (1985), 101.
31 HAEU: PE2-16864/16878: Livre blanc du Comité des constructeurs automobiles du marché européenne, December 1986.
32 HAEU: KM-257: Commission of the European Communities, ‘1992: The Impact on the Outside World, part of The European Community in a Changing World: Speech by Willy De Clercq EC-Commissioner for External Relations and Commercial Policy’ (Buenos Aires, 2 August 1988): 1.
33 ‘Peugeot: l’Europe au detriment de la France’, Le Figaro, 9 January 1987.
34 HAEU: KM-257: Commission of the European Communities, ‘Europe – World Partner’ (19 October 1988): 1.
35 Honda had invested in Belgium in the 1960s and the United States in the 1980s, setting a precedent for FDI by other Japanese producers and compelling the US to apply immediate pressure on Nissan and Toyota to invest in local transplant production and reduce exports.
36 HAEU: PSP-48: ‘Visit of President Delors to Japan – Debriefing Member States Ambassadors in Tokyo’ (27 January 1986): 6.
37 One outcome of this was regular meetings between the Japanese Automobile Manufacturers’ Association (JAMA) and the European Association of Automotive Suppliers (CLEPA).
38 Commission of the European Communities, ‘Japan: List of Non-Tariff Barriers’, 1987; SEC 87/414.
39 HAEU: PSP-341-347: Papers of Commissioner Peter Sutherland.
40 HAEU: PSP-48: David O’Sullivan, ‘Commission Agenda – Item 13c: President Delors’ Visit to Japan’, 28 January 1986.
41 HAEU: PSP-48: President Delors’ Press Conference in Tokyo, 23 January 1986.
42 COM(95) 73 final, p. 13. These efforts would continue into the 1990s with the Commission’s Commission’s Executive Training Program and ‘Gateway to Japan’ designed to introduce European companies to the Japanese market.
43 HAEU: CPPE: 1491: ‘EC Seeks Pact with Japan to Restrict Auto Imports’, Wall Street Journal, 29 February 1988.
44 Ibid., 1.
45 At the same time, the US initiated Market Oriented Sector Specific Approach (MOSS) and the Structural Impediments Initiative in the following year, both aimed at improving the US-Japan balance of trade and encouraging US FDI in Japan.
46 Commission Vice-President Andriessen in Osaka on 24 March 1990, ‘Speech Manuscript’, 6, as quoted by Keck, 108.
47 HAEU: KM-257: Commission of the European Communities, ‘1992: The Impact on the Outside World, part of The European Community in a Changing World: Speech by Willy De Clercq EC-Commissioner for External Relations and Commercial Policy’ (Buenos Aires, 2 August 1988): 1, 3, 7.
48 Bangemann had led the German Free Democratic Party (FDP), which advocated for a free market economy.
49 HAEU: KM-257: Martin Bangemann, ‘Letter to Willy De Clercq’ (Bonn, den 29 Juli 1988): 1-2.
50 For more on the evolution of EC-Japan relations in this period, see: Suzuki et al. (Citation2021) and Tanaka (Citation2013).
51 HAEU: FL-714: CCMC Letter to Commissioner Martin Bangemann, (4 October 1989): 2.
52 Ibid., 2.
53 HAEU: FL-714: ‘Aide Memoire: sur le dossier “Automobiles,” European Commission’ (11 October 1989), 2.
54 Ibid., 2.
55 A series of technology and production studies conducted between 1982 and 1990 quantified these advantages enjoyed by Japanese carmakers over their European counterparts.
56 HAEU: FL-714: ‘Note a l’attention de Monsieur Andriessen: conference de presse de M. Bangemann’ (Bruxelles, le 12 julliet 1989): 1. See also: Roland (Citation2000, pp. 125–126).
57 European Parliament: Committee on Economic and Monetary Affairs and Industrial Policy, A6170, p. 107.
58 HAEU: FL-714: ‘Note a l’attention de Monsieur Andriessen: Conference de Presse de M. Bangemann: Importations voitures japonaises’.
59 HAEU: FL-714: ‘Counting Rules for Japanese Vehicles Produced in the Community – Papier Bangemann pour la réunion de la Commission’, Brussels (10 October 1989): 2.
60 European Commission, ‘The European Motor Vehicle Industry’, COM(92) 166 final, (Brussels, 8 May 1992): 3, 17. As early as the 1980s, some British manufacturers expressed concerns in the Trade Union Congress that producers in Central and Eastern Europe could soon pose a greater threat than Japanese competitors. For more on this, see: Suzuki (Citation2020, Chapter 3).
61 Commission of the European Communities, ‘Communication from the Commission to the Council: Europe and Japan: Next Steps’, COM(95) 73 final, Brussels, (08.03.1995): 9. The deficit reduced by about 15% per year between 1992 and 1995.
62 McLaughlin and Maloney (Citation1999, p. 118). These authors enumerate several reasons for the dissolution of the CCMC, including the redundancy of having two organizations (the CCMC and the CLCA) as noted by McKinsey consultants, the CCMC’s refusal to include several major regional producers like Ford Europe, GM Europe, and Volvo AB, and the ability of Scandinavian producers to bypass the CCMC through the CLCA. But within the internal dynamics of the CCMC, the transplant debate brought the group’s problems to such an impasse that dissolution seemed the only way forward.
63 Kendall (Citation2013, p. 230). European parts manufacturers had their own interests: counter-purchasing agreements between Austria and Japan were eventually done in by Austria’s accession to the EU in 1995.
64 HAEU: MID-102: ‘Interview with Ms. Innike Herreman’, ACEA, Brussels, December 1993: 2; McLaughlin and Maloney (Citation1999, p. 120).
65 Calvet once said: ‘There are three things I will never do: reduce the price of my cars; allow the Japanese to enter Europe; and sell PSA to a foreigner’. See: Gandillot (Citation1992, p. 124).
66 HAEU: FL-726: ‘Note pour le president: entretien du president avec J. Calvet’ (13 mai 1991): 1.
67 Ibid., 2.
68 Fondation Jean Monnet pour l’Europe (FJME): JD-242: ‘Discourse de Jacques Delors President de la commission européenne’, European Business Community, (Tokyo le 23 Mai 1991), 4.
69 FJME: JD-242: ‘Press Conference by President Delors’, Tokyo 24/05, Bruxelles le 24 Mai 1991. During these remarks, Delors also worked to defend Calvet’s strong position, which had offended the Japanese, by explaining that ‘Calvet, whom I have known for 35 years, is not a protectionist. He favors the market economy. It was my duty to listen to him, and it is also my responsibility to clarify his position, which is absolutely not anti-Japanese, especially with regard to his own sector of interest, automobiles.’
70 FJME: JD-242: Japan Times, Press and Information Service, Tokyo, 25 May 1991.
71 FJME: JD-242: ‘Le Travaux d’approche de Jacques Delors a Tokyo: Le president de la commission européenne se rend en visite officielle au Japon’, l’Economie.
72 FJME: JD-242: ‘Delors Discussions with Prime Minister Kaifu’, Visite de Jacques Delors au Japon (Tokyo), 5-6.
73 HAEU: FL-713: ‘Elements of Consensus’, Brussels, (31 July 1991): 1.
74 Article 115 granted the Council to ‘issue directives for the approximation of laws, regulations, or administrative provisions of the member states as directly affect the establishment or functioning of the internal market’. In effect, national policies made prior to member state accession were allowed to remain in place.
75 Whole vehicle type approval was a major concern for automakers in the 1992 Program. The Commission’s Elements of Consensus agreement extended type approval for Japanese imports by 1993 and anticipated: ‘[t]he EC side will achieve full Community acceptance of type approval for motor vehicles by the end of 1992’.
76 HAEU: FL-713: ‘Elements of Consensus’, Brussels, (31 July 1991): 2-3.
77 ‘Completely knocked down’ or CKD products are delivered as parts needing to be assembled at their destination. As such, they are not subject to the same trade restrictions as finished goods because they require local labor input.
78 The document noted that the motor industries – and leading firms – of the UK and Japan had ‘periodically exchanged their views on the market conditions therein’.
79 HAEU: FL-713: Section 8: ‘Operation of Monitoring System at Both Levels: Monitoring Twice Yearly Consultations’, 2 August 1991.
80 HAEU: FL-713: ‘International Declaration by the Commission concerning the Operation of the Monitoring System’, 31 July 1991.
81 For more on the Japanese position, see the account by Hisoshi Owada in his Japan and the New Europe. Bloomsbury Press, 1994.
82 Keck, ‘1990-1995: Trade and Economics from Confrontation to Conversation’, 132.
83 HAEU: FL-636: Commission of the European Communities, ‘Automobile: Affaire Nissan’ (Bruxelles, 10 Octobre 1988): 1.
84 Diana T. Kurylko, ‘No Fear: Europe’s Makers Put Away Protectionism as Japanese Import Quotas Run Out’, Automotive News, 1 July 1999.
85 HAEU: PE3-6745: ‘Written Question no. 2730/91 by Mr. André Sainjon to the Commission: QXW2730/91EN’.
86 HAEU: PE3-6745: Reponse donnée par M. Bangemann au nom de la Commission (6 mars 1992): 1.
87 HAEU: FL-713: ‘Declaration du VP Andriessen à M. Nakao: Voitures japonaises: déclarations “conclusives” version finale’, 31 July 1991.
88 HAEU: FL-713: ‘Réponse de M. Nakao à M. Andriessen: Voitures japonaises: déclarations “conclusives” version finale’, 31 July 1991.
89 HAEU: FL-713: Le Cabinet du President – Francois Lamoreaux, ‘Note pour le president: voitures japonaises: déclarations “conclusives,” Bruxelles’, 31 julliet 1991.
90 Ibid., 1.
91 Charles Goldsmith, ‘EC Denies Curbs on Japan “Transplants”’, International Herald Tribune, 19 September 1991.
92 While many European automakers had embraced the Single Market Program at its launch in the 1980s, its acceptance was not universal. Some producers were wary of internal competition and the loss of state aid.
93 By this time, the Commission had also developed a new policy tool, the Trade Assessment Mechanism (TAM), which was much more flexible than its previous approaches. The Commission’s updated Communication on Japan, A Consistent and Global Approach, A Review of the Community’s Relations with Japan (1992), introduced its new method as a statistical analysis, designed to identify ‘obstacles to the normal development of sales by Community firms on the Japanese market’.
94 Commission of the European Communities, ‘Communication from the Commission to the Council: Europe and Japan: Next Steps’, COM(95) 73 final, Brussels, (08.03.1995): 6.
95 Ibid., 15.
96 HAEU: MID-102: ‘Interview with Ms. Innike Herreman’, ACEA, Brussels, December 1993.
97 Commission, ‘Next Steps’, Section 3.
98 HAEU: MID-102: ‘Interview with Ms. Innike Herreman’, ACEA, Brussels, December 1993: 2.
99 Bourke (Citation1995, p. 149). Not only was there discord among the Commissioners about the EOC, but the Consensus did not, in the long run, resolve the problems of the Common Commercial Policy.