‘We care about you, but …’: the politics of EU trade policy and development

Abstract

The European Union (EU) is one of the most important markets for developing countries, and trade policy has long been one of its most important instruments for promoting development. There is, however, a paradox at the heart of the relationship between the EU's trade policy and development. On the one hand the EU's trade as development policy has undergone a paradigm shift, the objective shifting from supporting the former colonies of the EU's member states to addressing poverty and with a greater emphasis on reciprocal liberalization. On the other hand, the EU's conventional trade policy initiatives—particularly its market access objectives in the Doha Round and in commercially motivated bilateral trade agreements—have adverse consequences for developing countries, as does its tendency to adopt stringent product regulations. We argue that this paradox is explained by differences in how much traction the emphasis on the development implications of trade has had in the EU's various trade policy subsystems.

Notes

¹ In 2010 the EU had the world's largest economy in purchasing power parity terms (International Monetary Fund (IMF), World Economic Outlook Database September 2011) and was the leading importer and exporter of both merchandise goods and commercial services (WTO, International Trade Statistics 2011, Tables I.9 and I.11, < http://www.wto.org/english/res_e/statis_e/its2011_e/its11_world_trade_dev_e.htm>, accessed 15 March 2012).

² Although what is now the European Union has changed names several times over the years, we use ‘EU’ throughout for the sake of simplicity.

³ The Youandé and Lomé Conventions also had significant aid dimensions, but they are not the focus of this article.

⁴ Our focus here, as with most aid and trade policies, is on states, rather than people. It should be noted, however, that Sumner (2010) estimated that in 2008 three-quarters of the world's poor lived in middle-income countries and only one-quarter in the world's 39 low-income countries.

⁵ Decision of 28 November 1979 on ‘Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries’ (L/4903).

⁶ The rapid economic growth and increased international economic engagement of a number of developing countries—most strikingly Brazil, China and India—during the 1990s and 2000s, in sharp contrast to the situation in the least developed countries, gave additional impetus to this re-focusing of EU trade as development policy (European Commission 2012a, 5).

⁷ The European Commission's (1996b) Green Paper cited this benefit like a mantra (see iii, xiii, 19, 34, 43, 49, 55, 66, 67). See also Brülhart and Matthews (2007, 485); Elgström and Pilegaard (2008, 368).

⁸ For reasons of space, we do not discuss them in detail here.

⁹ Interviews with a Commission official, and a Council Secretariat official, Brussels, 29 and 30 March 2011.

¹⁰ Timing is critical to disentangling different plausible motivations. The EU adopted its political commitment to enhance access to its markets for the world's poorest countries in 1997 before the shift of responsibility for trade with developing countries to DG Trade and before the EU began pushing hard for an inclusive trade round, let alone before the development focus that emerged after the 1999 Seattle WTO Ministerial. Moreover, the EBA benefited the countries that have the least influence in multilateral trade negotiations, while disadvantaging, in relative terms, other developing countries, not least the ACP and Brazil, which carry more weight in multilateral trade negotiations. It thus seems unlikely that it was a negotiating ploy. The Commission was certainly aware that the EBA would present a challenge to the EU's sugar regime and at least those in DG Trade were not unhappy about that prospect. This was a desirable (for those in DG Trade) side-effect, however, rather than a central motivation (interview with a Commission official by telephone, 20 June 2011).

¹¹ Compare Bartels (2007, 872) with European Commission (2011b, Table 1-1).

¹² Interview with a Commission official, Brussels, 7 March 2012.

¹³ The poorest countries do not compete with the countries most likely to be excluded from GSP (Stevens and Kennan 2011, 2). In addition, there is a high congruence among the countries likely to be excluded from GSP—including Brazil, China and India (European Commission 2011a, Annex I)—and the emerging economies with which the Commission is eager to negotiate bilateral trading agreements (see below).

¹⁴ The 2008 draft modalities represent the extent of progress in the round as of May 2012.

¹⁵ The ‘Singapore issues’ were designated as such because four working groups—one in each area—were created and tasked with these issues at the WTO Ministerial held in Singapore in 1996.

¹⁶ Peter Mandelson, Trade Commissioner, testimony, 24 June 2008 (House of Lords 2008, E81-2); Peter Balas, Deputy Director-General, DG Trade, testimony, 23 June 2008 (House of Lords 2008, E51); interviews with Commission officials, Brussels 11 November 2011 and 6 and 7 March 2012.