Sofia Maragkidou
Phd student
Department of International and European Studies,
University of Macedonia, Greece
[email protected]
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Methodology (Stages)
A. Constructing the subject under research
 Starting point: the phenomenon of the proliferation
of Regional Trade Agreements (RTAs), particularly
of Free Trade Agreements (FTAs) and its links with
the phenomenon of globalization in the context of
the US and EU trade policies
 Research on the objectives of the US and EU
trade policies focusing on the dynamic region of
East Asia
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Methodology (Stages)
B. Formulating the research question and the problematic
 Research question: To what extent and how the EU and US
“deep” FTAs strategies reinforce EU and US actorness in the
world trade scene and particularly in the region of East Asia?
 Problematic: The EU and the US are trying to
shape/influence the international trade rules by promoting
their objectives, norms and standards in their external
relations.
 Principal argument: the use of “deep” FTAs as an
alternative means for “managing globalization”
exporting
values, norms and standards on the basis of their respective
interests.
C. Developing the theoretical framework: Regionalism
 multidisciplinary approach: IPE and IR perspectives
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Reasons for the proliferation of FTAs
 RTAs/PTAs
are concluded among a group of states or state-like actors which may
or may not be geographically close and which involve
intergovernmental cooperation
 mechanisms of economic integration (FTAs looser form)
 External factors:
 Securing markets and providing export opportunities for domestic
companies
 Increasing costs of being excluded from FTAs due to trade diversiondomino effects
 Non-conclusion of the Doha Round
 Internal factors
 Economic growth
 Lock-in mechanisms for domestic reforms
 More flexible-linked to the laboratory rationale
 'Non economic' foreign policy and national security objectives

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Old vs New Regionalism
2
or 3 waves/generations
regionalism:
of
 1st wave
end of the WWII-1950s:
Customs Union+CAP by 6 european
states (old regionalism)
 2nd wave
1980s-today: US shift to
the use of FTAs-NAFTA, EU,
MERCOSUR, AFTA, SAFTA (new
regionalism)
 New “deep” FTAs:
 Are increasingly cross-regional
 Focus on deep integration issues
 Include foreign direct investment
 Promote harmonization of domestic
tax, and macro-economic policies
and legal regulation
 Provide for the establishment of
institutions to facilitate integration
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WTO Working Document n°12 “Multilateral Trade Agreements: A changing
landscape, 2006”
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Regionalism and the WTO
 FTAs are exempted from the Most
Favored Nation (MFN) principle under
certain conditions:
 elimination of tariffs and other trade
restrictions
to
be
applied
to
“substantially
all
trade”“substantially all sectors” (art. 24 of
the GATT+ art. 5 of GATS)
imprecise wording, unclear scope
 FTAs may promote trade diversion,
reduce welfare and deprive resources
from the WTO
 FTAs may prompt non-PTA countries
to
pursue
multilateral
trade
liberalization,
may
serve
as
laboratories
for
international
cooperation (WTO+ provisions) and
increase
competitiveness
and
welfare.
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EU’s trade policy: A tool for enhancing its
global actorness
 The EU constitutes the largest trading block in the world and it is
becoming a power through trade:
 uses the incentive of market access as a bargaining chip to
promote its values, objectives and geo-economic interests.
 most WTO members seek deals with the EU and increasingly adapt
to its standards
the EU has become the world's largest
regulatory power across a range of sectors (e.g. food, chemicals)
 Lisbon Treaty: greater consistency and coherence between the
EU’s commercial and foreign policies.
 Overall, the EU seeks to :
 write the rules of the game
 develop the institutional architecture to monitor those rules
 build the capacity of international organizations to enforce them
 expand its territorial reach by negotiating FTAs that establish
advantageous rules of trade.
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Rationale of the EU’s new FTAs strategy
 Until 1999 :
 de facto moratorium on the negotiation
of EU FTAs
 prevalence of the doctrine of managed
globalization in the EU’s external trade
policy
 focus on multilateral trade liberalization
2006 onwards: Shift to an ultra liberal
policy (Communication Global Europe)
and use of deep FTAs due to:
 Increasing geo-economic competition with
its main competitors (US, Japan, China,
India) -“race for markets”
 The US competitive liberalization strategyincreasing focus on the area of Asia
Pacific
 Doha Round dead-end
need to put
forward its deep integration agenda with
its trading partners
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Aims of the EU’s new FTAs strategy
 The
2006
Global
Europe
Communication aimed at promoting:




Reciprocal market opening
The
improvement
of
global
standards
The
deepening
of
strategic
cooperation
with
the
EU’s
international partners
Increasing EU competitiveness and
influence at global level
 FTA priority partners: ASEAN, South
Korea, MERCOSUR, India, Russia
and Gulf Cooperation Council Criteria:



Market potential (economic size
and growth)
Level of protection of protection
against EU exports
Potential partners’ negotiations
with EU competitors
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US Trade Policy
 The US was the champion of multilateralism for the first decades of the





GATT
It entered late the regionalism game (1st “shallow “FTA” with Israel in
1983)
Breakthrough: NAFTA (1994)-model for future FTAs
After failed multilateral trade negotiations in Doha the US progressively
turned to bilateral and regional routes
Clinton administration:
 Trade policy with strong mercantilistic flavor
 “Economic security” was the main focus of US diplomatic initiatives
 Focus on increasing US competitiveness
 Asia emerged as the most important priority for new trade initiatives
(APEC, FTAA, Big Emerging Markets initiative)
George W. Bush administration:
 Explicit linkage between trade and foreign and security policies of the
US (FTAs in Middle East and East Asia)
 Doctrine of competitive liberalization
 Increase of the number of FTAs under negotiation
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US Trade Policy
 Obama
administration aims at reinvigorating US
economy and global economic leadership
Emphasis
on the TTP and TTIP :
 Follows the strategy of competitive liberalization
 Aims at influencing the formulation of standards and the
establishment of norms in the Asia Pacific, while deepening
shared US-EU norms
create benchmarks for future
multilateral liberalization
In particular,
 The TPP aims at a “rebalance” of the US in Asia
 The TTIP aims at generating regulatory coherence,
repositioning the US-EU relationship vis-à-vis third
countries and strengthening the ground rules of the
international order
 Overall, both agreements are expected to have WTO+
provisions
 However the Trade Promotion Authority has not been renewed
yet, the EU leadership will change and Senate elections will
take place in the US
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Comparing US and EU FTAs approaches
 US approach
 FTAs are an evolving version of NAFTA
 Scope is structurally standardized
 Content of provisions fairly uniform
 Symmetry and reciprocity
 EU approach
 Differentiation of provisions and partner
commitments
 Flexibility
 Relatively modest ambition in terms of open
marketing
 Bruegel study (2009): differences in coverage
(services, investment and enforceability of
provisions)
 EU FTAs exclude relatively more agricultural
lines and are less ambitious on services and
IPR
 However, after the KOREU FTA, EU FTAs try
to match the US FTAs template and scope
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Conclusions
 Regionalism is likely to be the
only game in town for at least
the next few years
 Competition dynamics
between the EU and the US
FTAs strategies:
 race for market access,
 expansion of their territorial
sphere of influence
 shaping the rules of global trade
 Cooperation dynamics: TTIP
 create a modern “gold standard”
FTA for future FTAs on the basis
of regulatory convergence
 strengthening the EU-US
leadership in the WTO
 rebalancing their influence vis-àvis the emerging economies
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THANK YOU FOR YOUR
ATTENTION!
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