European Union trade policy after enlargement: larger crowds, shifting priorities and informal decision-making

Abstract

The article focuses on the effects of Eastern enlargement on EU trade policy-making. On interest constellation, the article makes a case that protectionist forces have been strengthened relative to liberal forces. This slight protectionist turn is mostly witnessed in the area of anti-dumping and with respect to the Doha trade round. On preference aggregation, guided by a principal–agent framework, it is argued that the growth in the number of actors (principals and interest groups) has not constrained the role of the European Commission (agent). However, it has led to an increase in informal processes and has empowered large trading nations vis-à-vis smaller and less ‘comitology-experienced’ member states.

Keywords:

• Business groups
• comitology
• decision-making
• enlargement
• principal–agent theory
• trade policy

ACKNOWLEDGEMENTS

An earlier version of the paper was presented at the Annual Meeting of the American Political Science Association, Boston, 28–31 August 2008. The author acknowledges support of the NCCR International Trade Regulation of the Swiss National Science Foundation (http://www.nccr-trade.org). I wish to thank Ewa Świaniewicz for research assistance and Susan Kaplan for editorial assistance. Thanks also go to Eugénia da Conceição-Heldt, Andreas Dür and Jappe Eckhardt for valuable comments.

Notes

International Herald Tribune, 14 July 2008, Action on a Doha Trade Deal (signed by responsible ministers from the Czech Republic, Estonia, Latvia, Slovenia, Sweden and the UK).

The dominant literature on post-accession and NMS has largely focused on compliance; see Sedelmeier and Epstein (2008).

This categorization has been prominently used in relation to trade in agricultural products and in textiles and clothing. Yet generalizations need to be treated with caution, as countries may manifest different positions even within sectors (e.g., services) as a function of competitiveness of sub-sectors (e.g., financial industry, energy services).

NMS-8 is defined here as the eight Central and Eastern European countries that acceded in 2004 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic, Slovenia). NMS-10 includes Malta and Cyprus. NMS-12 refers to the NMS-10 plus Bulgaria and Romania.

The above data needs be supplemented by a more detailed analysis of competitiveness of various sectors. In addition, a closer examination of border protection (e.g., tariffs), non-tariff barriers to trade (e.g., standards) and internal support (e.g., subsidies) would allow a more precise prediction of the positions taken with respect to liberalizing strategies; see World Trade Organization (2007).

Trade defence instruments include AD, anti-subsidies and safeguard measures by importing countries. The most important instrument is AD where the Community takes border measures (raising tariffs) against alleged practices of dumping by foreign firms.

Hungary was part of the Cairns Group that pushed for further liberalization of agricultural markets during the Uruguay Round. Since its accession, Hungary’s position on agricultural support has markedly changed.

Interview, trade official, 133-Deputy, 25 June 2008; Agence Europe, 14 June 2007.

Interview, trade official NMS, 133-Deputy, 17 May 2006.

Agence Europe, 18 October 2005, 19 June 2006, 17 July 2006, 19 February 2008, 11 March 2008.

Interview, trade official, 133-Deputy, 25 June 2008.

On Estonia’s liberal trade policy reforms in the 1990s, see Feldmann and Sally (2002).

Current trade flows to China, other dynamic Asian economies and Latin America represent a small part of their extra-EU exports; see Table 2.

Interview, trade official NMS, 133-Deputy, 17 May 2006.

Agence Europe, 18 July 2008.

Trade official NMS, 133-Deputy, 24 June 2008.

The development of EU exports from 2000 to 2005 underscores the growing importance of markets of the Commonwealth of Independent States (increase from 3.8 to 7.5 per cent). During this period, other export markets have remained stable (Asia: around 23 per cent; Africa: 8 per cent) or have declined (US from 37 to 31.6 per cent), WTO (2007).

Interview, trade official NMS, 133-Deputy, 17 May 2006.

Interview, business lobbyist, 2 July 2008; interview, lawyer specialized in AD cases, 24 June 2008.

In order to measure the positions, I selected three key questions that suggest a more liberal approach to balancing interests (the interests of European companies that have moved some parts of their production, interests of importers, consumer interests and other EU foreign policy objectives). I added three procedural questions where the Commission seeks additional obstacles to using AD (minimal market shares to accept claims, prior consultation with foreign countries and the thresholds for dumping and injury assessments). Responses were coded without knowing the name of the member state that submitted the response; with the exception of the submissions of Estonia and the Slovak Republic which were written in the national language.

See Global Antidumping Database, http://people.brandeis.edu/~cbown/global_ad/.

In particular, the competition from China has been felt (interview, business lobbyist, UNICE [today BusinessEurope], 16 May 2006).

For the purpose of this article, I do not consider various PA relations within the Commission and within DG Trade.

This assumption needs some qualification, as trade officials’ interaction with interest groups might affect previously held positions, e.g., an AD official might increasingly internalize the concerns of the business alliances that favour protectionist measures.

In particular British Trade Commissioners have pushed for liberal reforms in recent years, including Leon Brittan (1995–1999) and Peter Mandelson (2004–2008).

Interview, business lobbyist, UNICE [today BusinessEurope], 16 May 2006.

Interview, business lobbyist, chemical industry, 3 July 2007.

Interview, trade official, DG Trade, 16 May 2006; interview, senior trade official, DG Trade, 25 June 2008; interview, trade official NMS, 133-Deputy, 23 June 2008.

Interview, trade official NMS, 133-Deputy, 17 May 2006; trade official NMS, 133-Deputy, 24 June 2008.

Not to forget the historical role of state-owned companies; interview, trade official NMS, 133-Deputy, 23 June 2008.

Interview, trade official NMS, 133-Deputy, 24 June 2008.

Interview, business lobbyist, national federation, 2 July 2008.

Interview, trade official NMS, 133-Deputy, 23 June 2008.

Ibid.

Interview, business lobbyist, national federation, 2 July 2008.

Interview, trade official NMS, 133-Deputy, 24 June 2008; no service provider from the NMS-12 has yet joined the ESF, http://www.esf.be, accessed 13 August 2009.

Interview, business lobbyist, chemical industry, 13 October 2006.

Interview, trade official, 133-Deputy, 25 June 2008.

Ibid.

Interview, trade official NMS, chair and 133-Deputy, 25 June 2008.

The chair can remove or add issues. Chairs from small member states do not have large resources which puts them at a disadvantage; interview, trade official NMS, chair and 133-Deputy, 25 June 2008.

Interview, trade official NMS, chair and 133-Deputy, 25 June 2008.

Interview, business lobbyist, national federation, 2 July 2008.

Interview, trade official, 133-Deputy, 25 June 2008.