Abstract
Preferential trade agreements have become a tool for the external institutionalisation of a state’s preferred economic governance model, with the US and EU at the forefront of exchanging market access for acquiescence of their preferred rules. The institutionalisation and codification of the relationship with the TTIP was intended to create the world’s largest market and largest regulatory institutional arrangement, whose structural power and gravitational pull would bring other states towards it and its rules and norms. It should have been the Treaty that would bring an end to bilateral treaties. However, the underlying differences in EU and US preferences on this, as revealed in the comparison on recent agreements in this chapter, the potential for politicisation and contestation, and the importance of power asymmetries in negotiations have derailed negotiations. Yet these challenges were severely underestimated at the highest political levels, when the original ambitions for TTIP were set out.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
Young (2002).
- 2.
In the EU case the emphasis on bilateral trade agreements emerges from the 2006 ‘Global Europe’ trade strategy.
- 3.
These cases were chosen as examples of developed economies that have FTA texts with both the EU and US. Although the EU-Singapore FTA is pending ratification in 2017, the text is available. The EU and US also have FTAs with developing states in Central and South America, and have similar provisions to the agreements with Asian states.
- 4.
Upon taking office as President of the US, Donald Trump signed an executive order halting the ratification of TPP by the US and withdrawing the US from the agreement.
- 5.
March and Olsen (2011).
- 6.
Perrow (1983), p. 119.
- 7.
Regional economic organisations with various degrees of levels of integration and success have appeared in all corners of the globe (e.g. NAFTA, Andean Community, Mercosur, SIECA, Cariforum, ANZERTA, ASEAN, Eurasian Union, EFTA).
- 8.
Association Agreements are broad bilateral agreements establishing a free trade agreement and solid political and economic cooperation mechanisms, and have been signed either with neighbouring states (Ukraine, Moldova) or states that, at least in theory share the EU’s broad values (Central America, Chile, beleaguered negotiations with Mercosur). Political Cooperation Agreements have typically been signed with developing states and set out the political and development cooperation pillars of relationships that can be later enhanced through the negotiation of a free trade agreement (e.g. Vietnam, Thailand). Framework Agreements (which may have more sophisticated names) have been used with more developed states (South Korea, Canada).
- 9.
Free Trade Agreements contain clauses to end the agreement, which include the advance warning required. Rescinding a trade agreement would mean that tariff benefits under the agreement would be cancelled with trade reverting to non-preferential WTO schedules, and that any additional non-tariff barrier trade facilitation measures under the FTA (e.g. mutual recognition of conformity assessments or safety tests) would also cease, and only whatever measures have been agreed at WTO level would apply, so although the agreements can be terminated, there would be consequences and financial losses for exporters potentially facing more barriers in the partner market, and for importers potentially facing higher tariffs on the products they import from the partner country.
- 10.
The controversial Philip Morris vs. Australia ISDS case, where the tobacco company used a subsidiary firm based in Hong Kong to sue the Australian government for plain packaging regulations, led many to reconsider the merits of ISDS. Although the arbitrator panel decided that the case was outside the remit of the agreement, this case raised the salience of ISDS in public discourses. In Germany, the Vatenfall case, where the Swedish company contested the German government’s post-Fukushima decision to wind down nuclear power, also incensed public opinion, and helped to build a NGO platform mobilisation against ISDS, which became a key concern in TTIP negotiations.
- 11.
See Dowd (2017); Statement against Investor Protection in TTIP, CETA and other Agreements signed by numerous anti-TTIP groups, <https://corporateeurope.org/sites/default/files/attachments/s2b_statement_isds_ics_engl.pdf> accessed 23 May 2017; De Ville and Siles-Brügge (2016b), p. 7.
- 12.
European Commission, News archive, ‘Singapore: The Commission to Request a Court of Justice Opinion on the trade deal’, 10 October 2014, <http://trade.ec.europa.eu/doclib/press/index.cfm?id=1185> accessed 25 April 2017.
- 13.
Opinion C-2/15, Opinion pursuant to Article 218(11) TFEU—Free Trade Agreement between the European Union and the Republic of Singapore—‘New generation’ trade agreement negotiated after the entry into force of the EU and FEU Treaties—Competence to conclude the agreement, 16 May 2017, <http://en.euractiv.eu/wp-content/uploads/sites/2/2017/05/CP170052EN.pdf> accessed 16 May 2017.
- 14.
Gill and Claire Cutler (2014).
- 15.
Urata (2005).
- 16.
- 17.
Ravenhill (2010), pp. 178–208.
- 18.
Ravenhill (2003), pp. 299–317.
- 19.
Eckhardt (2013), pp. 989–1005.
- 20.
General Agreement on Tariffs and Trade, Article XXIV, 1994, <www.wto.org/english/res_e/booksp_e/analytic_index_e/gatt1994_09_e.htm> accessed 20 April 2017.
- 21.
Bilateral negotiations also afford asymmetric power advantages to China, however, as China’s economic liberalisation agenda in FTAs, until now, has been much more limited than that of the US and EU, it will not feature in the present discussion.
- 22.
Damro (2012).
- 23.
Koelble (1995), p. 234.
- 24.
This is a key characteristics of the effects of institutions according to new institutionalists. See Hall (1986), p. 19.
- 25.
Schott (2006), p. 103.
- 26.
Phillips (2007), p. 163.
- 27.
The competitiveness agenda was continued in Commissioner De Gucht’s 2010 trade policy, and in Commissioner Mälmstrom’s ‘Trade for All’ policy of 2015, although the later places greater emphasis on transparency and the values agenda. Continuities and changes in priorities in the EU’s trade policy can be found in Garcia (2013).
- 28.
Garcia (2012), pp. 59–71.
- 29.
European Commission, DG Trade, European Commission (2006) Global Europe. Competing in the World, Brussels, <http://trade.ec.europa.eu/doclib/docs/2006/october/tradoc_130376.pdf> accessed 12 March 2017, p. 11.
- 30.
Hufbauer and Wong (2005), p. 12.
- 31.
Small differences in the schedules and timelines for liberalisation of trade in goods depend on the specific characteristics of the bilateral trade relation in a FTA.
- 32.
Some older US agreements (US-Israel) and politically motivated US FTAs (US-Jordan) have reduced coverage in terms of TBT and customs administration. Horn et al. (2010), pp. 1565–1588.
- 33.
Ibid, p. 1575.
- 34.
In 2017 full implementation of any of the EU’s new agreements with investment chapters is still pending.
- 35.
Although the EU has not included investment until recently in FTAs, individual EU Member States have entered into thousands of bilateral investment treaties (BITs), many of which include investor-state dispute settlement along similar lines to US agreements, and using international rules as set out in the ICSID Convention, and UNICITRAL Arbitration rules.
- 36.
Geographical indications (GIs) are collective marks signalling the region from which a product comes. The product characteristics must derive from the land and climate (the ‘terroir’). GIs originated in Europe and are currently available only for agricultural products.
- 37.
See Goldberg (2001), pp. 107–152.
- 38.
See Chiu (2004), p. 489.
- 39.
Letter on Geographic Indications from Commissioner Karel De Gucht to Singapore Minister for Trade and Industry, EU-Singapore Free Trade Agreement, 21 January 2013 <http://trade.ec.europa.eu/doclib/docs/2013/september/tradoc_151779.pdf> accessed 20 March 2017.
- 40.
Moir (2015).
- 41.
O’Connor (2014), pp. 66–69.
- 42.
US-Korea Free Trade Agreement, Chapter 8, 2012, <https://ustr.gov/trade-agreements/free-trade-agreements/korus-fta/final-text> accessed 8 April 2017.
- 43.
Articles 4.3 and 4.4 of the Free Trade Agreement between the EU and the Republic of Korea, 2011, <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2011:127:FULL&from=EN> accessed 10 April 2017.
- 44.
TPP brings together 12 Pacific states (United States, Canada, Mexico, Chile, Peru, Japan, Vietnam, Brunei, Malaysia, Singapore, Australia, New Zealand). After years of negotiations it was signed in February 2016, and ratification processes commences in the states. Following the election of President Donald Trump in November 2016, the United States announced it would not proceed to ratify the agreement and would withdraw from TPP (BBC, ‘Trump Executive Order pulls US out of TPP’, 24.1.2017, <www.bbc.co.uk/news/world-us-canada-38721056> accessed 10 April 2017). The remaining 11 states are looking at ways to continue the ratification of TPP, and engaging the United States. At the time of writing in April 2017 the future of the agreement remains uncertain, but there are possibilities of an altered version re-emerging. Moreover, counterparties have suggested that President Trump use novelties in TPP in his renegotiation of NAFTA (Financial Times, ‘Mexico calls on Trump to use TPP deals to reanimate NAFTA’ 30.4.2017, <www.ft.com/content/ebb7605e-2c1a-11e7-9ec8-168383da43b7> accessed 10 April 2017).
- 45.
TPP Chapter 25 Regulatory Coherence, (25.4.2), <https://ustr.gov/sites/default/files/TPP-Final-Text-Regulatory-Coherence.pdf> accessed 10 April 2017.
- 46.
Ibid. 25-3.
- 47.
Chapter 22 of CETA establishing the Regulatory Cooperation Forum does not mandate consultation with stakeholders, unlike the Chapter on Sustainable Development (Labour and Environment) and Trade. However, it is common practice for stakeholders to participate in policy making in both Canada and the EU (e.g. through online stakeholder consultations in impact assessments), so it is likely that the parties will engage stakeholders.
- 48.
Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA) Chapter 21, 2016, <http://data.consilium.europa.eu/doc/document/ST-10973-2016-INIT/en/pdf> accessed 15 April 2017.
- 49.
Chase and Pelkmans (2015), p. 9.
- 50.
Horn et al. (2010).
- 51.
For more on this see Kolben (2006), pp. 225–258.
- 52.
The US has not ratified all of the ILO Core Conventions, however, it uses their language in FTAs and requires of the signatory parties in its FTAs domestic measures that ensure these principles.
- 53.
The ILO enforces its conventions by means mostly of scrutiny through regular reports on states, monitoring and requiring governments to provide information on what they are doing to enact those conventions (sunshine), and by offering states technical support in creating regulations to give life to the conventions (carrot). The ILO can receive complaints over mistreatment of workers in states, and can raise consultations, issue reports and recommendations. Although rarely used, the ILO under Article 33, the ILO has some opportunity for the use of punitive powers (sticks) to encourage states to adopt its recommendations, as it can leave it to the discretion of members to withhold trade as a punitive measure on should they wish to, although this has not been done. See Elliot (2000).
- 54.
The US approach reflects the lobbying of unions and the importance of Congressional elections as Congress has typically been split between representatives of states suffering from declining industry opposing trade liberalisation and advocating labour clauses in trade agreements to prevent ‘social dumping’ alongside trade unions (see Kerremans 2003, pp. 517–551). In the EU, too, there has been a cacophony of voices calling for more and less binding social clauses, but, crucially, Member States had different positions leading to a softer EU approach (see Bossuyt 2009, pp. 703–722).
- 55.
Free Trade Agreement between the United States of America and the Republic of Korea, 2010, <https://ustr.gov/sites/default/files/uploads/agreements/fta/korus/asset_upload_file934_12718.pdf> & <https://ustr.gov/sites/default/files/uploads/agreements/fta/korus/asset_upload_file852_12719.pdf> accessed 2 April 2017.
The USA was first required to include binding labour clauses in NAFTA in 1994 to allay Congressional and trade union fears regarding business relocation to Mexico.
- 56.
For more on these mechanisms, including pitfalls see: Martens et al. (2016).
- 57.
Free Trade Agreement between the United States of America and the Republic of Korea, 2010, Chapter 19.
- 58.
In addition to the Labour, Environment Committees mentioned and Regulatory Fora, EU and US FTAs create a Joint Committee (at ministerial level) which oversees the implementation of the FTA and work of all committees and working parties, as well as a variety of Committees to exchange information on work on the implementation of the major chapters and discuss issues as they arise. These can vary slightly from FTA to FTA but typically cover Committees for Agriculture, Trade in Goods, SPS, Technical Barriers to Trade, Financial Services, Professional Services (working groups to investigate ways to move towards mutual recognition of professional qualifications to facilitate cross-border services provision), Textile and Apparel.
- 59.
Statement from United States President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso, 13 February 2013, <http://europa.eu/rapid/press-release_MEMO-13-94_en.htm> accessed 25 March 2017.
- 60.
Van Ham (2014), p. 7.
- 61.
Obama (2016).
- 62.
Sapir (2007).
- 63.
European Commission Press Release, ‘European Commission publishes TTIP legal texts as part of transparency initiative’, 7 January 2015, <http://europa.eu/rapid/press-release_IP-15-2980_en.htm> accessed 8 April 2017.
- 64.
European Commission, EU-US Transatlantic Trade and Investment Partnership, Trade Cross-Cutting Disciplines and Institutional Provisions, EU Initial Position Paper, 2013, p. 5, <http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151622.pdf> accessed 8 April 2017.
- 65.
Ibid.
- 66.
United States–European Commission High-Level Regulatory Cooperation Forum Common Understanding on Regulatory Principles and Best Practices, 2011, <http://trade.ec.europa.eu/doclib/docs/2011/july/tradoc_148030.pdf> accessed 8 April 2017.
- 67.
European Commission, EU-US Transatlantic Trade and Investment Partnership, Trade Cross-Cutting Disciplines and Institutional Provisions, EU Initial Position Paper, 2013, <http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151622.pdf> accessed 24 May 2017.
- 68.
European Commission, EU Proposal for institutional, general and final provisions in TTIP, July 2016, <http://trade.ec.europa.eu/doclib/docs/2016/july/tradoc_154802.pdf> accessed 8 April 2017.
- 69.
European Commission, The Precautionary Principle, COM(2000)1, 2000.
- 70.
Bartl (2016), p. 5.
- 71.
Despite a Citizen’s Initiative signed by around 3 million citizens across the Union, a pan European platform #StopTTIP, and demonstrations (of variable sizes) across the continent, the bulk of the opposition was located in Germany, Austria and France, were issues regarding food safety gained visibility and salience due to Greenpeace and other campaigns. As the media reported on these, the issues gained increased notoriety. The level of mobilisation and media attention and public debate on TTIP varied greatly from state to state. In the UK, The Guardian newspaper ran a series on TTIP, mostly highlighting threats, but has a readership of around one million, and NHS workers organised some (small) demonstrations, but otherwise the matter went largely unnoticed by the bulk of the population.
- 72.
In Germany and other Central European states the issue of chlorinated chicken, hormone treated beef and GMOs food from the US became rallying cries of civil activism and fears.
- 73.
De Ville and Siles-Brügge (2016a), p. 95.
- 74.
The Independent, ‘TTIP Greenpeace leak shows how US can pressure EU to compromise health and the environment under trade deal’, 5 May 2016, <http://www.independent.co.uk/news/business/news/ttip-leak-greenpeace-trade-deal-eu-us-tpp-ceta-health-environment-a7014731.html> accessed 10 April 2017.
- 75.
The leaks can be accessed at https://ttip-leaks.org/ttip/ Greenpeace stands by the veracity of the documents, however, when dealing with leaked documents there is always a certain degree of uncertainty.
- 76.
Chase and Pelkmans (2015), p. 14.
- 77.
European Commission, Communication from the Commission—Towards a reinforced culture of consultation and dialogue—General principles and minimum standards for consultation of interested parties by the Commission COM/2002/0704 final, <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52002DC0704> accessed 15 April 2017.
- 78.
Chase and Pelkmans (2015), p. 15. This is, in fact, what is incorporated in the European Commission’s Better Regulation Agenda of 2015.
- 79.
Greenpeace, TTIP Leaks, <https://ttip-leaks.org/faq/> accessed 10 April 2017.
- 80.
Bartl (2016), p. 15.
- 81.
Wiener and Alemanno (2016).
- 82.
Over the years the US and EU have agreed on numerous issues from transfer of passenger name records to mutual recognition of conformity assessments for marine equipment. For more see Chase and Pelkmans (2015).
- 83.
Whilst there is still uncertainty regarding President Trump’s eventual trade policy and international policy, the 2017 Trade Policy released in March hinted at lack of enthusiasm for international institutions, including the WTO, which would suggest there may not be much enthusiasm in the administration for an international investment court.
- 84.
Comprehensive Economic and Trade Agreement between the EU and Canada, 2016, <http://ec.europa.eu/trade/policy/in-focus/ceta/ceta-chapter-by-chapter/> accessed 15 April 2017.
- 85.
Joint Interpretative Instrument on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States, 27 October 2016, pp. 3–4 <http://data.consilium.europa.eu/doc/document/ST-13541-2016-INIT/en/pdf> accessed 15 April 2017.
- 86.
March and Olsen (2011).
- 87.
French and German Ministers complained about the lack of substantive progress in the negotiations to warrant concluding the negotiations ahead of the end of President Obama’s term as had been hoped.
- 88.
In the US, anti-globalisation mobilisation has coalesced around TPP, whereas TTIP failed to achieve the same degree of public salience.
- 89.
Euractiv, ‘Ryan: Washington will ‘chart a path forward on TTIP’, 24 April 2017, <www.euractiv.com/section/economy-jobs/news/ryan-washington-will-chart-a-path-forward-on-ttip/> accessed 3 May 2017.
- 90.
European Commission, Better regulation for better results-An EU agenda, COM(2015)215, 2015, https://ec.europa.eu/info/sites/info/files/communication-better-regulation-for-better-results-an-eu-agenda_may2015_en.pdf accessed 2 May 2017.
References
Baldwin R (1993) A Domino theory of regionalism. Centre for Economic Policy Research, London, Working paper 857
Bartl M (2016) Regulatory convergence through the back door: TTIP’s regulatory cooperation and the future of precaution in Europe. Amsterdam Law School Research Paper 2016-07: 2016-01
Bossuyt F (2009) The social dimension of the generation of EU FTAs with Asia and Latin America: ambitious continuation for the sake of policy coherence. Eur Foreign Aff Rev 15(4):703–722
Chase P, Pelkmans J (2015) This time it’s different: turbo-charging regulatory cooperation in TTIP. CEPS Special Report No. 110/June 2015
Chiu K (2004) Harmonizing intellectual property law between the United States and Singapore: the United States-Singapore free trade agreement’s impact on Singapore’s intellectual property law. Transnat Law 18:489
Damro C (2012) Market power Europe. J Eur Public Policy
De Ville F, Siles-Brügge G (2016a) The truth about TTIP. Polity, London, p 95
De Ville F, Siles-Brügge G (2016b) Why TTIP is a game-changer and its critics have a point. J Eur Public Policy: 7. https://doi.org/10.1080/13501763.2016.1254273
Dowd C (2017) ‘Winter is Coming’ Business and Human Rights Resource Centre, https://business-humanrights.org/en/winter-is-coming-how-tpp-and-ttip-threaten-to-chill-positive-developments-in-business-and-human-rights. Accessed 23 May 2017
Dür A (2007) The EU trade policy as protection for exporters: the agreements with Mexico and Chile. J Common Market Stud 45(4):833–855
Dür A (2010) Protection for exporters: power and discrimination in transatlantic trade relations, 1930–2010. Cornell University Press
Eckhardt J (2013) EU unilateral trade policy-making: what role for import-dependent firms? J Common Market Stud 51(6):989–1005
Elliot K (2000) The ILO and enforcement of core labour standards. International Economics Policy Briefs, IIE Institute for International Economics, Number 00-6, https://piie.com/publications/pb/pb00-6.pdf. Accessed 2 April 2017
Garcia M (2012) Competitive fears: the EU, US and the free trade agreements in East Asia. EU External Aff Rev 2:59–71
Garcia M (2013) From idealism to realism? EU preferential trade agreement policy. J Contemp Eur Res 9(4)
Gill S, Claire Cutler A (eds) (2014) New constitutionalism and world order. Cambridge University Press
Goldberg S (2001) Who will raise the white flag? The battle between the United States and the European Union over the protection of geographical indications. Univ Pa J Int Econ Law 22:107–152
Hall P (1986) Governing the economy: the politics of state intervention in Britain and France. Oxford University Press, p 19
Horn H, Mavroidis PC, Sapir A (2010) Beyond the WTO? An anatomy of EU and US preferential trade agreements. World Econ 33(11):1565–1588
Hufbauer G, Wong Y (2005) Prospects for regional free trade in Asia. Peterson-Institute Working Paper Series No. 05-12, p 12
Kerremans B (2003) Coping with a nettlesome dilemma: the long road to the US trade act of 2002. J World Invest 4(3):517–551
Koelble T (1995) The new institutionalism in political science and sociology. Comp Polit 27(2):232–243
Kolben K (2006) The new politics of linkage: India’s opposition to the workers’ rights clause. Indiana J Global Leg Stud 13:225–258
March JG, Olsen JP (2011) Elaborating the ‘New Institutionalism’. In: Goodin RE (ed) Oxford handbook of political science. Oxford University Press
Martens D, Orbie J, Van den Putte L, Williams Y (2016) Civil society meetings in EU trade agreements: recommendations and lessons for EPAs. ECDPM Briefing Note, https://biblio.ugent.be/publication/8112040/file/8112076. Accessed 15 March 2017
Moir H (2015) European trade treaties: key intellectual property demands. ANUCES Briefing Paper Series, December 2015, vol 6(4), http://politicsir.cass.anu.edu.au/sites/politicsir.anu.edu.au/files/documents/ANUCES_Briefing_Paper_6-4_2015_pdf.pdf. Accessed 20 March 2017
O’Connor B (2014) The European Union and the United States: conflicting agendas on geographical indications–what’s happening in Asia? Global Trade Customs J 9(2):66–69
Obama B (2016) Barack Obama op-ed: the TPP would let America, not China, lead the way on global trade. Chicago Tribune, 2 May 2016, http://www.chicagotribune.com/news/opinion/commentary/ct-barack-obamatrade-china-tpp-20160502-story.html
Perrow C (1983) Complex organisations: a critical essay. McGraw Hill, p 119
Phillips N (2007) The limits of securitization: power, politics and process in US foreign economic policy. Gov Oppos 42(2):158–189
Ravenhill J (2003) The new bilateralism in the Asia Pacific. Third World Q 24(2):299–317
Ravenhill J (2010) The ‘new East Asian regionalism’: a political domino effect. Rev Int Polit Econ 17(2):178–208
Sapir A (2007) Europe and the global economy. In: Sapir A (ed) Fragmented power: Europe and the global economy. Bruegel, Brussels
Schott J (2006) Free trade agreements and US trade policy: a comparative analysis of US initiatives in Latin America, the Asia-Pacific region, and the Middle East and North Africa. Int Trade J 20(2):95–138
Urata S (2005) ‘Proliferation of FTAs in East Asia’ PECC Trade Forum, Jeju, Korea on May 23–24, 2005
Van Ham P (2014) TTIP and the Renaissance of Transatlanticism. Regulatory Power in the Age of Rising Regions, Clingendaele Report, Netherlands Institute of International Relations, p 7
Wiener JB, Alemanno A (2016) The future of regulatory cooperation: TTIP as a learning process toward a global policy laboratory. Duke Law Contemp Probl Symp 78(4)
Young A (2002) Extending European cooperation: the European Union and the ‘new’ international trade agenda. Manchester University Press
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer International Publishing AG, part of Springer Nature
About this chapter
Cite this chapter
Garcia, M. (2018). Building Global Governance One Treaty at a Time? A Comparison of the US and EU Approaches to Preferential Trade Agreements and the Challenge of TTIP. In: Fahey, E. (eds) Institutionalisation beyond the Nation State. Studies in European Economic Law and Regulation, vol 10. Springer, Cham. https://doi.org/10.1007/978-3-319-50221-2_13
Download citation
DOI: https://doi.org/10.1007/978-3-319-50221-2_13
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-50220-5
Online ISBN: 978-3-319-50221-2
eBook Packages: Law and CriminologyLaw and Criminology (R0)