Coherence for Governance:
The European Parliament and Trade and Investment Policy
Christopher A. Hartwell
al. Jana Pawla II 61/212, 01-031 Warsaw, Poland
tel.: +48 222 062 900, fax: +48 222 062 901,
[email protected]
Coherence for Governance:
The European Parliament and Trade and Investment Policy
Christopher A. Hartwell
CASE – Center for Social and Economic Research
&
Department of International Management
Kozminski University
ABSTRACT
The idea of policy coherence has gained visibility as a principle of European Union policymaking
over the past decade. However, coherence is still lacking in the EU’s external trade and
investment policies, due to the myriad of competing interests within the Union and a lack of a
clear focus on what the end result of EU trade policies should be. This paper argues that policy
coherence can be achieved by a return to the founding and uniting principles of the European
Union, with the EU re-vitalizing its original mandate of fostering liberalized trade and investment.
This mission should be augmented with a principle of “coherence for governance,” providing
governance assistance and conditionality alongside completion of free-trade agreements or
investment agreements to maximize impact of trade liberalization. Institutionally, the European
Parliament has a substantial role to play in this process, as both overseer and guarantor of
consistency.
Keywords: coherence, trade, investment, governance, European Parliament
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I.
Introduction
The past decade and a half has seen a dedicated move in developed countries towards policy
coherence in national and supra-national policymaking, particularly in regards to development
aid. While the theoretical basis of policy coherence is still evolving (May et. al 2006), Nilsson et. al
(2012:396) provide a definition of coherence as “an attribute of policy that systematically reduces
conflicts and promotes synergies between and within different policy areas to achieve the
outcomes associated with jointly agreed policy objectives.” Additionally, coherence should
properly be measured on two separate axes (Di Francesco 2001): first as a process, in describing
how policy goals are set, how institutions and agencies work together in the pursuit of the same
objectives, and how the political and bureaucratic process shapes incentives in order to reach
these policy goals; and secondly as an outcome, in the sense of various policies achieving
complementary rather than contradictory aims. This would mean that policies, in the more
equivocal phrasing of Barry et. al (2010), “at the very least do not undermine” each other.
Policy coherence has been a key principle for the European Union since the Maastricht Treaty,
focused mainly in the areas of security and foreign policy, but with a shift towards the idea of
“policy coherence for development” (PCD) through the European Consensus for Development
in 2005 and the Lisbon Treaty in 2007 (Carbone 2008). PCD seeks to bring together the disparate
initiatives of the EU, formally the world’s largest foreign aid donor (once the EC and the
member states are combined, (Carbone 2010)), towards overarching development objectives as
elucidated in the UN’s Millennium Development Goals (MDGs). However, as can be expected,
attempting to limit the inevitable difficulties that come with creating policy in such a large and
dispersed organization have been troublesome, with some commentators noting that the very
nature of the EU makes such coherence, especially in the development realm, “mission
impossible” (Carbone 2008).
This policy incoherence extends to areas that are not directly part of the traditional development
agenda, but are intimately connected with development goals. In particular, the areas of trade and
investment have also seen policy coherence as difficult to come by, as a myriad of competing
interests and political viewpoints have influenced the EU’s approach towards trade liberalization
(Meunier 2007). In tandem with the EU’s own internal pressures regarding trade and investment,
global trends have also contributed to policy incoherence, as trade openness internationally has
been in headlong retreat following the global financial crisis (and even the EU itself taken to
concluding trade agreements as a means to protect its own industries (Dür 2007)). This global
economic instability has also affected the EU’s investment policies, as circumstances both
internally-generated (ongoing Eurozone troubles) and exogenously imposed (the Russian
invasion of Ukraine) have colluded to depress global flows of investment and focus the EU on
short-term crisis management rather than long-term strategy (Chaisse 2012). With a world still
reeling from economic crisis and tepid recovery, policy coherence from the EU is needed more
than ever in helping to push a coherent agenda from 2015 onward in these two critical and interlinked spheres.
The paper argues that the failures of policy coherence thus far in the trade and investment
spheres by the EU can be explained by a lack of clarity on what the outcome of these policies
should be; that is, there has been a lack of coherence in trade and investment because there is no
common objective for process or outcomes to be measured against. In the memorable words of
Stevens (2007:221), “it has been hard to provide for the EU’s [trade] regime any simple rationale
other than it exists.” To fill this conceptual vacuum, I propose that policy coherence can be
achieved by a return to the founding and uniting principles of the European Union, with the EU
re-vitalizing its original mandate of fostering liberalized trade and investment, much as it did in the
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1990s (Hanson 1998). However, much as the EU has done for its member countries over the
past 20 years, this mission should be augmented with a principle of “coherence for governance,”
providing governance assistance and conditionality alongside completion of free-trade
agreements (FTAs) or investment agreements. With the European Parliament (EP) playing a key
role in this shift towards “coherence for governance,” using its oversight abilities to ensure
consistency in process, outcome, and evaluation, the EU can help countries outside the union to
achieve maximum impact from their trade and investment reforms.
II.
Literature Review: Opportunities and Obstacles in Policy Coherence
The idea of policy coherence has rightly been noted by May et. al (2006:382) as “elusive concept
that is easily understood but difficult to measure.” While the idea of policies being harmonized in
their intent (if not necessarily in their implementation) had long been a tenet of public
administration, the application of “policy coherence” as its own approach to public policy grew
out of debates regarding development aid in the early 1990s. In particular spearheaded by the
OECD’s “Development Assistance Committee” (DAC), policy coherence was conceived of as
applying at the supra-national level to ensure coordination across donors (Fukasaku and Hiratu
1995), while incorporating all relevant facets (such as trade, agriculture, and the environment)
into the development policy towards a particular country (Forster and Stokke 1999).
These dimensions have been refined by Hoebink (2004) and Carbone (2008:326) as “horizontal
coherence,” or coordination between “aid and non-aid policies in terms of their combined
contribution to development,” and “vertical coherence,” which is the integration of policies
across actors/countries, either in a formal grouping such as the EU or in looser and more
informal groupings (Koehler 2010). Finally, there is also a distinction to be made between
“internal” and “multilateral” coherence, where multilateral coherence is exactly as it sounds,
referring to coordination amongst the UN, the World Bank, and other international financial
institutions. On the other hand, internal coherence is most likely the most common conception
of policy coherence, in that it refers to the consistency of a particular policy across its objectives,
channels in which it’s implemented, and modalities of implementation (Picciotto 2005, Carbone
2008).
With these various facets of policy coherence encompassing multiple actors and interests, from a
public administration standpoint, it is easy to see how the natural state of a government may in
fact be incoherence (May et. al 2006). Indeed, even Nilsson et. al’s (2012) definition of policy
coherence, noted above, is rather unwieldy, giving a hint as to the difficulty of achieving
coherence in a modern bureaucracy. A multitude of studies exist exploring the public choice and
administrative roots of incoherence, including the use of incoherence as its own tool in order to
simultaneously accommodate values that may be directly contradictory (Forster and Stokke 1999)
or to appease different political interests while still achieving a desired but second-best outcome
(Hoebink 2004).
More benignly, however, is the reality that “vast number of programs run by the governments of
industrialized democracies and the competitive and conflicting goals of those programs create a
complex web of interaction between state and society” (Peters and Savoie 1996:282). Indeed, the
more moving parts that are introduced into the public administration equation, the more likely it
is to be prone to failures; in this context, expanding the size of the jurisdiction, country, or
bureaucracy would lead to a greater probability of incoherence, a reality that inter alia
Baumgartner and Jones (1993) have chronicled for the United States. This does not mean that
smaller jurisdictions are not prone to failure, however, as even countries such as the Netherlands,
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acknowledged to have excellent public administrative services, have seen incoherence in their tax
and development policies (Weyzig and van Dijk 2009). In this sense, it is not only size but
complexity of the government apparatus that can lead to incoherence (Teles 2013).
Coherence in a European Context
Given the obstacles to policy coherence even within a small national government, it is little
wonder that the European Union has exhibited difficulties in uniting various policies around
coherency. Carbone (2008) has noted that policy coherence in the EU is most likely a “‘mission
impossible,” due to the various political interests and the differing commitment to various
policies (in this case development) from the specific member states. The European Union also
has a further exacerbating factor, in that it has been expanding since its creation, with the waves
of accession becoming more frequent over the past two decades. Where the institutional
framework of the Union might have accommodated coherence on a smaller scale, the continual
growth of the club has led to strains on existing institutions and promoted incoherence (Kirman
and Widgren 1995).
Specific obstacles to coherence are present in each sphere that the EU operates, with some of the
earliest scholarship on the EU’s difficulties in coherence focusing on the (lack of a) common
foreign and security policy (Tietje 1997, Missiroli 2001, Smith 2004, Nuttall 2005) and the
dualism of the EU’s policies versus those of member states (Schmalz 1998). As noted above, the
issue of policy coherence for development (PCD) emerged as a topic for researchers in the early
2000s, although work was done in the mid-1990s that focused on the EU’s attempts in the
Maastricht Treaty to better coordinate its external policies (Loquai 1996). The early barrier noted
by researchers in achieving coherence in development for the EU centered on the EU’s own
unclear conception of what coherence was to achieve; based on EU documents and early actions,
the original conception of coherence appeared to be narrowly limited to EU member states
coordinating their development policies with each other rather than taking a more holistic view
(Hoebink 1999).
With little guidance on how coherence should appear in reality and no real legal basis (Gauttier
2004), this approach led to “considerable ambiguity and room for maneuver in PCD application
by EU member states” (Picciotto 2005:315), which the member states then seized upon to pursue
their own interests rather than a European objective in development (Egenhofer et. al 2006).
Moreover, as Richardson (2000) noted, the EU became an alternative venue for single issueminded actors, with policy entrepreneurs taking their ideas to Brussels when they were shut out
of their national policy networks. It wasn’t until considerable outside pressure from the OECD
and the creation of the UN’s Millennium Development Goals (MDGs) in 2000 that the EU
began to move towards policy coherence as a defining principle in its “European Consensus on
Development” document in 2005 (Greig et. al 2007). These tenets and their recommendations for
implementation were also couched in the “Code of Conduct on Complementarity and Division
of Labor” from the EC in May 2007 (Carbone 2008). But the biggest legal move on policy
coherence was its incorporation into Article 208 of the Lisbon Treaty in 2007, obliging
signatories to promote global development in their policies (Robles 2014).
However, once policy coherence was given a legal framework, an issue was immediately noted in
administration; in particular, the EU’s double role as implementer of its own development
policies and as the coordinator of member states’ policies makes coherence simultaneously easier
in theory but more difficult in practice (Orbie and Vansluys 2008). Perhaps not surprisingly, the
EU’s own assessment of its progress in PCD, issued as a bi-annual report in 2007, found that the
EC’s progress was satisfactory in driving coherence; the problem in forging coherence lay in the
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member states, where “the general commitment to PCD depended upon political support,
capacity and knowledge, degree of involvement of development co-operation staff and attitude to
the trade-off between development and non-development policy objectives” (Dearden 2008:122).
Other research has been less sanguine about the EC’s own progress, noting that, in many cases,
even the introduction of new administrative tools reinforced the divisions leading to policy
incoherence rather than ameliorating them (Adelle and Jordan 2014).
Even with these substantial hurdles, all is not lost for policy coherence, as the extant literature has
also been able to draw conclusions on the ways forward for PCD in the EU context. While
member countries have had their own difficulties in overcoming institutional fragmentation to
implement PCD at the national-level, the “much-needed innovation” of PCD has focused
attention on the need to build new or utilize existing institutional structures for inter-sectoral
coordination (Larsen and Powell 2013). In particular, a major “challenge for the EC is to create
formal mechanisms for ensuring that policy coherence is considered during policy formation”
(Dearden 2008:123), a reality that will require substantial “skills of the staff involved, in particular
in the areas of policy analysis and international development, and the existence and quality of
processes for the evaluation of the impact and coherence of policies on and towards developing
countries” (Barry et. al 2010: 221). Given this need for skills, as well as the high turnover in
national-level institutions concerned with PCD (Galeazzi et. al 2013), current research suggest
that the EU should ensure its own institutions are in order for coherence; in this manner, the EU
can act as a leader in fostering coherence in the member states and at the Union-wide level.
III.
Coherence in Practice: Trade and Investment Policy in the EU
In addition to issues of complexity, size, and coordination that are already present in the quest for
PCD in the European Union, the dual issues of trade and investment policy present their own
unique obstacles in achieving policy coherence. While properly thought of as part of a package
under the “development” banner, in reality the conduct of trade and investment policies can be a
powerful motivator or inducement for other forms of development, a reality that has been
neglected as “the political economy of development cooperation leads to excessive focus on aid
and too little attention to other issues that could be remedied relatively easily” (Barder et. al. 2013:
847).1 Similarly, trade and investment policy can also be utilized as a lagging reform, reinforcing
other critical liberalization reforms in a particular country.
As with development writ large, the EU’s approach to trade and investment liberalization has
reflected the difficulties inherent in achieving coherence in these two areas. A blunt assessment
comes from Brown (2005:3) who says that “the EU is not maximizing the development gains
from its trade policy. In practice, developing countries are often excluded from EU markets.”
This has not always been the case, as indeed the creation of the EEC in 1958 led to a “farreaching liberalization of external trade relations” that extended for many years (Dür 2008); with
the EEC granted exclusive competence for a Common Commercial Policy (CCP), the supranational institutions of the Commission were able to work in other multilateral fora such as the
General Agreement on Tariffs and Trade (GATT) to secure liberalization throughout the world
in the 1960s (Woolcock 2009). The 1970s and 1980s were characterized by a more protectionist
outlook for the EU, but throughout the 1990s the EU once again became a proponent of
multilateral trade deals, done through large international institutions such as the WTO (Smith and
Woolcock 2001).With global appetite for further trade liberalization stalled by the 2000s, the EU
1
This is not to say that trade and investment policies are easy remedies, although facets of them (such as
removal of administrative barriers or relaxation of investment requirements) are relatively easier than multilateral initiatives.
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continued to press for more liberal policies, but they became increasingly done in a bilateral and
regional manner (Faber and Orbie 2008).
This gyrations in the overall focus of the EU’s trade policies – are they meant to protect
European businesses? Open new markets for European firms? Ease entry to the single market
for developing countries? – combined with the various modalities (unilateral, bilateral, regional,
multilateral?) have necessarily created difficulties in achieving policy coherence across the EU.
Indeed, policy coherence as a concept is useless if there is nothing to cohere around: that is,
harmonization of methods and goals is necessary, but only if a clear and simple sense of mission
is realized. This fragmentation of the EU’s trade policy has been noted as a clear function of its
own institutional make-up, where there exists a sort of “imposed coherence:” as Elgström and
Pilegaard (2008:364) note, “while the EU formally acts as one united body in the negotiations, the
disjointed character of EU policy making means that the negotiation stance of the Union is
fundamentally ambiguous and characterized by significant tensions and conflicts between policy
objectives.”
The poster child of these difficulties, and indeed, of the policy of deliberate incoherence, is the
EU’s Common Agricultural Policy (CAP). While it is debatable if the EU needs an agricultural
policy at all, the original goals of a common policy (as defined in the founding documents of the
Commission) “need not per se conflict with the goals of development policy” (Schmieg 1997:34).
However, in practice, the political pressures from the member states have at times directly
contradicted development policies, and even a series of reforms of the CAP to lessen the burden
on developing countries have not aided in generating growth or removing all distortions
(Mathews 2008). While the utilization of price supports (one of the market-distorting of all trade
instruments) has declined in recent years and been replaced by direct payments, tariffs and export
subsidies still remain in place (te Velde et. al 2012). The mere size of the CAP (45% of the EU’s
budget in 2010) means it absorbs an inordinate amount of time and energy of the EU (Boulanger
et. al (2010) place the benefits to the EU alone of eliminating the CAP at €38 billion), placing it
primus inter pares in terms of policy coherence for development. That is, there may be coherence
for the trade policy of the EU in agriculture, and it is maintaining the CAP; under this
conception, other development initiatives are merely used as a public relations effort so that CAP
can continue unchanged. Policy incoherence would not enter into this debate, as the goal is clear.
The issue with investment policy has been somewhat different than trade in terms of coherence,
mainly because of the issue of ownership of the policy. It took many years for foreign direct
investment (FDI) to be enshrined in the CCP, a change that came about with the Treaty of
Lisbon in shifting to the EC what was once a shared competence (Shan and Zhang 2010).
Indeed, the pre-Lisbon years were also somewhat ones of intended incoherence in investment
policy, with little attention paid to if member states and the Commission’s investment interests
were in complete harmony. With the shift of authority exclusively towards the Commission and
the creation of post-Lisbon consensus on the EU’s role in investment matters, however, the idea
of policy coherence in investment as well has just started to gain prominence in the EU’s
investment agreements. This is important, as the prior incoherence appears to have survived by
sheer dint of inertia, and “no consensus has emerged” amongst the three principal organs of the
EU (the Commission, the Parliament, and the Council) in regards to where EU policy on
investments should go (Calamita 2012). Lack of transparency and uncertainty about the transfer
of bilateral investment treaties from the member state to the Union level (Kleimann 2011) also
have (and will continue to) bedevil attempts at coherency, coupled with continued disagreements
between member states on the balance between investor protection and regulatory discretion
(Calamita 2012).
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IV.
Coherence on the Path to Good Governance?
As the previous section made clear, policy coherence in trade and investment is difficult because
there is oftentimes no consensus to cohere around; policy coherence as a goal is only practical if
there is a defined metric of success. With domestic political and business interests focusing on
protectionism and zero-sum thinking in regards to trade, trade and investment policies can be
highly contentious and goals diffuse even within a member state, much less at the level of the
EU. However, this section focuses on moving policy coherence towards a goal that is widely
acknowledged to be of critical importance to developing countries, as well as key for the
European Union to better target its trade and investment powers: better governance in partner
countries.
Introducing Governance
In its 2013 report (EC 2013:41), the Commission explicitly stated that “effective trade policy is
critical in boosting growth and jobs both in Europe and abroad and in projecting EU values and
interests in the world… However, trade in itself is not sufficient to secure development. Good
governance and sound domestic policies are needed to maximize the benefits of trade-induced
growth and make it work for inclusive and sustainable growth.” In regards to investment as well,
the development of quality institutions such as property rights and rule of law both attract FDI
and increase a country’s ability to use it (Mayer 2006).
Beyond these policy pronouncements, the economic evidence regarding the need for governance
(or, more simply put, good institutions) in improving all manner of economic metrics is
overwhelming, as is the work done in governance amplifying the benefits of liberalized trade and
investment. Work by scholars such as Dani Rodrik (1999) explores how good institutions are
needed to keep countries on a growth path, while Dollar and Kraay (2003) show the correlation
between good institutions and reaping the benefits from trade and Bevin et. al (2004) note
empirically how good institutions influence the flows of foreign direct investment.
Given the overwhelming preponderance of economic evidence that good governance has a oneto-one correlation with development and growth, it is difficult to understand why such a focus
has not already been linked to trade and investment policies. In some sense, a governance focus
has existed in EC projects, but it too has fallen prey to its own incoherence. The rubric of
governance has been utilized in other initiatives of the EU, most prominently in democracy
promotion, a tactic which has fallen out of favor since the days when Santiso (2003:1) could
outline a policy to devise “the right mix of positive and negative measures to respond to
democratic decay and crises of governance” in developing countries. But even in these halcyon
days of the early 2000s, Olsen (2000) was pointing out the difficulties inherent in democracy
promotion and how it could (and has) hinder the broad-based goals of national governments and
the Commission in general. Moreover, the track record of the EU’s democracy promotion efforts
has not been successful, to say the least, with the most obvious failing occurring in Ukraine, right
on the EU’s doorstep (Solonenko 2009).
However, coherence for governance (CFG) is a different creature, as it goes beyond (and around)
democracy promotion and, indeed, goes much further than mere aid. Trade and investment are
classic areas where the EU can extend carrots as part of technical assistance, trade reforms, or
investment opening; reforms are best implemented when there is a clear benefit that can be
explained politically and economically, and linking governance reforms to trade or investment
liberalization will both multiply the effect of the opening as well as make the reforms easier to be
accepted. This alone distinguishes trade and investment reforms, which have more tangible
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benefits, than issues of foreign policy writ large, and thus offer a greater chance of success than in
the less tangible cases that Thomas (2012) documents.
Indeed, there are many benefits of the governance approach from the EU side. In the first
instance, given the evidence and the EC’s own pronouncements, the idea of better institutions is
a concept that all member states can get behind. As noted above, trade and investment coherence
has been handicapped by the diverging interests of member states, but the demonstrable need for
better institutions is an area that can only benefit the EU and the partner countries. Secondly,
trade and investment policy negotiations are often long and drawn-out affairs, and the benefits of
liberalization may take years to materialize. A CFG agenda will maximize the impact of trade
policy in a more compact timeframe and prove tangible results that EU policymakers can point
to. In a similar vein, CFG will also serve an important purpose in policy coherence, by (as Schout
and Jordan (2007) note), helping to ensure that EU money is spent in more effective ways. With
an emphasis on governance issues built in to trade agreements, separate technical assistance
projects (that may have been following their own schedule or donor needs) can be combined to
both maximize impact and minimize cost.
In terms of implementation, and perhaps more importantly, this type of governance
conditionality has already been a part of the EU’s agenda. As McGuire and Lindeque (2010:1338)
detail under the heading of “regulation,” the EU has pushed stringently for reduction of
regulatory barriers and improvement in “trade facilitation, competition policy, investor
protection, and government procurement.” While McGuire and Lindeque (2010) note that this
emphasis hit its zenith in the early stage of the WTO’s Doha round, these so-called “Singapore
issues” have endured through EU policymaking and are reflected in the Lisbon Treaty (Woolcock
2011).2 There even has been a nascent attempt to implement these issues via the negotiation of
Economic Partnership Agreements (EPAs), which have tied together Singapore issues with the
idea of market access (Faber and Orbie 2007). While controversial in terms of application to the
African, Caribbean, and Pacific (ACP) nations, the EPAs have had some success elsewhere,
including in the EU’s agreement with Mexico (Szymanski and Smith 2005).
Beyond EPAs, however, there is an even more powerful example of coherence for governance,
based on institutional conditionality, an example that has reaped huge dividends for the EU: the
accession of the Central and Eastern European (CEE) countries to the EU. The collapse of
communism in the countries of the former Warsaw Pact opened up huge opportunities for trade
and investment for both the EU and these countries, while also allowing for a fundamental
transformation of the governance of the EU’s neighbors to the east. The transformation that did
occur was driven by internal politics and the pace of institutional change in each country
(Hartwell 2013), but as the shock of the transformational recession subsided and the early
transition was completed, continued governance reforms were conditioned on one simple thing:
chances of accession to the EU.3 As Grabbe (1999:2) correctly notes, the closer the CEE
countries came to accession, the more conditionality was applied, with the EU “increas[ing]the
scope of its political and economic conditions for CEE, moving from external relations based on
trade and aid to areas at the heart of domestic policy-making.” These so-called “Copenhagen
conditions” made it clear that institutional stability was the first and most important condition for
accession, forcing institutional change before any other issues of enlargement could be
undertaken.
2
They are called “Singapore issues” as they were first tabled at the WTO Ministerial meeting in Singapore in
1996.
3
Of course, there is a strong element of reverse causality here as well, as European accession was also more
likely for countries that had better governance. Thus, a country had a higher chance of accession if it made
progress in reforms, but progress in reforms was also conditioned on the likelihood of accession.
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Applying this precedent into a new coherence for governance agenda would require less of a
policy shift than may at first appear. While EU accession is not the end objective for the vast
majority of countries that the EU enters into trade and investment agreements with (even for
those in the European neighborhood), the same sort of ratcheting effect for governance can be
applied for trade and investment reforms. Building on the EPA approach, and by tying trade and
investment reforms to institutional reforms in a single document or negotiation process, CFG
could be viewed as a comprehensive package of assistance, aid, and access. And like the CEE
accession process, it would provide a tangible goal for the partner countries.
Difficulties in a Governance Agenda
Of course, the issues that would accompany the implementation of a CFG agenda are also legion,
but should not act as a prohibitive deterrent. As shown above, and as noted by Schout and
Jordan (2005), the fact that the EU’s own complicated institutional framework exhibits dispersed
governance may make advocating for good governance elsewhere a problematic issue. In such a
situation, any governance conditionality would become a case of “do as I say and not as I do.”
This is also true in regards to the somewhat spotty record of the EU in general in advancing free
trade (Schuknecht 1991, Winters 1994), much less good governance to accompany trade
liberalization. It would be helpful, not to say likely necessary, for greater coordination amongst
EU institutions in a more transparent manner to make CFG less of a developed country lecture
and more of a concrete plan for development.
There is also evidence that, even if the EU does coalesce around a policy goal and displays policy
coherence, the results still might not be as planned. Thomas (2012) notes that there is a one-toone correlation in most policymaker’s minds regarding coherence and effectiveness, in that
coherence is a sufficient and (possibly) necessary precondition for a certain policy to be effective.
However, he details the EU’s difficulties in common foreign policy, with reference to the
International Criminal Court (ICC) and the attempt to block American initiatives for “nonsurrender agreements,” concluding that “unfortunately for proponents of EU foreign policymaking, the evidence does not support the familiar expectation that EU coherence facilitates EU
effectiveness” (Thomas 2012:471). In regards to governance issues, there is always an issue of
policies not being followed through (sanctioning mechanisms are difficult to implement and
likely even less desirable to rely on), and thus even coherence for governance is no guarantee that
the needed reforms will be sustainable. By integrating governance into the trade and investment
agenda, however, it is more likely to highlight these issues and possibly create some movement
than the current EU approach.
Finally, the governance agenda may also clash with the ideas of donor recipients, recipients who
may have the ability to constrain the EU in its policy desires (McGuire and Lindeque 2010). As
Bhesharati (2013:37) points out, cooperation and institutional mechanisms in developing
countries “originate from different histories, follow different inspirations, paradigms and
premises, and operate under different models, approaches and delivery mechanisms.” Having
already been faced by ideas of conditionality from multilateral financial institutions, developing
countries may not want to be exposed to “the constraints and pressures of externally imposed
rules and accountability mechanisms set by the North” (Ibid.). Moreover, McGuire and Lindeque
(2010) also posit that there are diminishing returns to the EU’s leverage (given the shifting
patterns of international trade), with many countries valuing their ideas of regulation and
protectionism more than market access in the EU.
10 | P a g e
But the brilliance of the CFG concept lies in its voluntary nature, in that countries that want to
enter into trade and investment agreements with the EU do so of their own accord (that is,
North Korea is not pushing for an agreement, and would likely not follow any CFG
conditionality). In this sense, countries that can benefit most from trade and institutional reforms
will self-select into the CFG framework. And where they do not, lack of institutional reform and
trade liberalization thus falls on the leaders of the country in question, not on the EU. Similarly, it
is far too early to completely discount the world’s largest trading bloc and its continuing allure,
which still may convince many poorer countries at the margin to follow a CFG agenda. That is, I
make no claims that policy coherence from the EU regarding governance will lead to sustained
improvements in all countries, but the act of cohering around governance may induce changes
that would not otherwise have occurred. CFG would thus improve both EU-level decisionmaking and governance in developing countries, even if the impact was at the margins.
V.
The Role of the European Parliament in Coherence in Governance
Implementing such an idea as coherence for governance has been tried already at the EU/EC
level in the EPAs, but has thus far lacked an oversight body to ensure that the coherence is
actually adhered to. The last innovation in a CFG agenda would be to introduce such an
oversight mechanism that can ensure that the political momentum is sustained, that disparate
executive initiatives are adhered to, and that ongoing agreement negotiations are monitored for
their coherence.
Figure 1 – The Coherence Cycle
1. Political
commitment and
policy statements
3. Systems for
monitoring, analysis
and reporting
2. Policy
coordination
mechanisms
Source: OECD (2009)
Institutionally, the European Parliament (EP) is well-suited towards making this shift towards
CFG a reality. As shown in Figure 1 from the OECD, the Policy Coherence cycle consists of
three phases, and the EP has an important role to play in each phase. Phase I has, in many
respects, already begun, as the EU has already begun the important shift of policy statements in
favor of governance. The entire EPA initiative and the Singapore issues that have been giving the
EPAs their foundation have already been agreed-upon at the Union level, and thus it only
remains for clearer policies to be drawn out internally on how to make CFG operational. Given
its oversight abilities regarding the Commission, the EP can ensure that governance remains a
11 | P a g e
part of both the political commitments and policy statements emanating from Brussels regarding
trade and investment projects and reforms, keeping the entire EU “on message” in regards to the
importance of institutional development. Indeed, the EP has already begun to move in this
direction, passing resolutions strongly supporting the principles of PCD, specifically in relation to
fisheries policy (European Parliament 2014).
Perhaps more importantly, the EP can also ensure that CFG is a key part of any package for
trade and investment liberalization, and exerting its control over the purse strings of Europe can
help to verify this is the case. As Kleimann (2011:1) correctly notes, there has been a significant
elevation of “the European Parliament’s role in the trade policy-making process vis-à-vis the
European Commission and the European Council of Ministers—particularly by giving the
European Parliament final and credible authority to approve or reject all trade and investment
agreements and co-decision power in adopting framework legislation.” With the EP recognizing
that it needs to wield this power more broadly and also help to build the institutional framework
needed for more coherence, adding CFG to its list of responsibilities would help rather than
hinder this process. Moreover, it will make it easier for the EP to provide key oversight and
monitoring roles in verifying that governance is appropriately integrated and carried out in
Commission projects (an action that the European Parliament made explicit in its resolution of 6
April 2011 on the future EU international investment policy, where it asked the Commission to
include, in all future agreements, a reference to the updated OECD Guidelines (van der Zee
2013)).
As with the theoretical basis behind CFG, however, there are also issues that need to be dealt
with in making the EP the guarantor of external consistency for the Union. As Kleimann
(2011:28) points out, the political nature of the Parliament and the need for MEPs to adhere to
their constituent’s desires makes the EP “ill-suited to promote the consistency of EU trade and
investment policy with EU external action principles.” However, the proposal of this paper is not
to force MEPs to act in a manner that would conflict with their national economic interests.
While the motivating force behind CFG is the need for the EU to return to its founding tenets of
economic liberalization, in some sense, the EU also self-selects into various trade and investment
treaties. By integrating CFG with the EP’s competencies, the EP will be focused on the
conditions offered to other countries that have already begun a treaty negotiation; thus, the bargaining
over the conditions of market access will have already been concluded, and the EP’s input would
be on the terms of acceptance by the partner country. In short, while MEPs may be protectionist
at heart, integrating CFG into their responsibilities would allow them to oversee EU process in
keeping governance at the top of the agenda while also overseeing the adherence to governance
tenets in existing agreements. This would not be a contradiction, but rather an extension to an
already-existing political process.
VI.
Conclusions
This paper has shown the way towards a new cohesive approach for policymaking in the
European Union, the idea of coherence for governance. By extending a strategy that has been
utilized piecemeal in previous EU agreements and making it a core principle for the EU’s trade
and investment policies, it will help to bring coherence to an area that has been lacking it.
Moreover, this paper has highlighted that this new approach can be implemented by the
European Parliament, which has recently assumed a much more important duty in overseeing the
EU’s external policies. While the coherence for governance idea may find some difficulties, it will
represent not only a way for developing countries to reform at the same time they are benefitting
12 | P a g e
from access to the EU; coherence for governance will also represent an institutional step forward
for the EU in line with the Union’s original mandates.
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