European Union regulatory politics in the shadow of the WTO: WTO rules as frame of reference and rhetorical device

Abstract

This contribution asks how the World Trade Organization (WTO) affects European Union (EU) regulatory politics. While WTO rules have no direct effect, authors who take a rational choice institutionalist perspective argue that these rules are enforced domestically through the mobilization of exporters triggered by the WTO dispute settlement system. This contribution challenges the plausibility of this argument and offers an alternative perspective rooted in historical and discursive institutionalism. It contends that WTO rules act as both a frame of reference influencing actors' perceptions of the scope of legitimate policy outcomes and as a rhetorical device that may be used by actors in domestic political battles over regulatory policy decisions. Two recent decisions on EU regulation with international trade effects are process-traced to demonstrate the value of the alternative perspective against the rational choice institutionalism model: Registration, Evaluation and Authorization of Chemicals (REACH) and the proposed ‘carbon border tax’ in the framework of the EU emissions trading scheme post-2013.

Keywords:

• Compliance
• discursive institutionalism
• European Union
• historical institutionalism
• rational choice institutionalism
• trade policy
• World Trade Organization

ACKNOWLEDGEMENTS

An earlier version of this article was presented at the ‘Diverging Paradigms on EU Trade Policy’, Jean Monnet Centre of Excellence Workshop, 16–17 December 2010, KU Leuven. I would like to thank all participants of the workshop for their comments and especially the organizers Bart Kerremans and Jan Orbie. I would additionally like to thank Alasdair Young, Sebastiaan Princen, Hendrik Vos and Fabienne Bossuyt and two anonymous referees for the Journal of European Public Policy for their valuable comments on previous versions of this article.

Notes

A similar argument has been made by Cortell and Davis (1996) while not embedding it in a historical or discursive institutionalist tradition.

For more extensive discussions of the REACH decision-making process see amongst others Fisher (2008), Lind (2004) and Selin (2007).

In the previous system, only chemical substances marketed after September 1981 had to be tested, thereby providing disincentives for innovation while ‘old’ chemicals were probably also the most dangerous.

As an indication of the importance of exports for the European chemical industry (and indeed, of the chemical industry for European exports): in 2000 (the year preceding the REACH White Paper) the EU exported chemicals for a value of 103.4 billion euros, and recorded a trade surplus of almost 50 billion euros (CEFIC 2001: 3). The same year, EU chemical exports represented more than 12 per cent of its total exports (WTO 2001: 22).