A Geo-Economic Turn in Trade Policy? : EU Trade Agreements in the Asia-Pacific

Contemporary trade policy is increasingly framed in geo-strategic terms. But how much of that rhetoric is reflected in actual policy choices by the EU or its trading partners? This book provides a first systematic study of the broader international context in which EU trade agreements are conceived, negotiated, and designed. Building on a refined conceptualisation of geo-economics, the book develops a cogent framework that combines insights from scholarship on the design of free trade agreements with ideas from foreign policy analysis. Empirically, the analysis focuses on the relations between the EU and the Asia-Pacific. Following the United States’ pivot to Asia and the EU’s Global Europe strategy, China’s backyard has become the main arena in which global powers’ geo-economic strategies overlap. Building on a series of case-studies, combining the perspectives from the EU and its trading partners, the book shows that the rhetoric of geo-economic competition is yet to catch up with the actual negotiation and design of free trade agreements. This volume will be of great interest to scholars, students and practitioners who want to gain a holistic understanding of contemporary trade negotiations. Preface Contents List of Contributors List of Figures List of Tables Part I Introduction 1 Geo-economic Motives and the Negotiation of Free Trade Agreements: Introduction Introduction Geo-economics and the IPE of Trade Systemic Approaches Power in Trade Negotiations Analyzing the Geo-economic Dimension in FTA Negotiations Selecting a Negotiating Partner Bargaining Power During Negotiations Harnessing Externalities in the Design of FTAs Research Design and Structure of the Book References Part II A Geo-Economic Trade Environment 2 The Politics of FTAs in Asia: The Role of China and Implications for EU Trade Policy Introduction The Strategic Context An ‘Assertive’ China China’s Conflict Behavior The Belt and Road Initiative EU Trade Policy Toward Asia Trade Interdependence Between the EU and China EU Trade Agreements with Asian Countries China’s FTAs with Asian Countries Comparing EU and China’s Trade Agreements Challenges and Opportunities for EU Trade Policy The EU–China Comprehensive Agreement on Investment Conclusion References 3 US Trade Policy: Japan vs. China, from Politically Economic to Existential Introduction US Response to Japan’s Economic Ascent Continuity in the US’ Trade Policy Toward Japan and Toward China Dissimilarities in US Trade Policy Toward China as Compared with Japan The United States as a Geostrategic Trade Power Conclusion References 4 Global Value Chains and EU–East Asia Trade: An Antidote for Geo-Economic Competition? Introduction The Liberal Thesis Two Alternative Perspectives: Geo-Economics and Fair-Trade Geo-Economics and Global Value Chains Fair Trade and Global Value Chains EU–East Asia Trade Agreements as Tests for These Perspectives EU Discourse on Global Value Chains and Trade Agreements with East Asia Key Revealed Preferences in EU–East Asia Trade Agreements Conclusions References Part III Designing Geo-Economic Trade Agreements 5 Intellectual Property Rights. EU and US Initiatives in the Asia–Pacific: Competition, Coordination or Duplication? Introduction Treaty Making The Use of Treaty Making: Countries The Use of Treaty Making: IPR Issues Coercion The Use of Coercion: Countries The Use of Coercion: IPR Issues Socialization The Use of Socialization: Countries The Use of Socialization: IPR Issues Conclusion References 6 Most-Favoured Nation Clauses: A Double-Edged Sword in a Geo-Economic Era Introduction The Origins and Changing Motives Behind MFN MFN as Shaped by Mercantilist and Free Trade Ideas The Multilateral High Water Mark of MFN The Return of Geo-economic Motives: Contemporary Use of MFN in FTAs Regional and Issue-Specific Variants of MFN-Design and Their Strategic Potential Increasing Use of MFN Clauses Uneven Regional Distribution Variants of MFN in EU-Asia Trade Relations and Strategic Implications The Implications of MFN Clauses: Not so Strategic After All? Conclusion References 7 Product Regulations: You Can Drive My Car, Otherwise Let It Be Introduction Regulations, Trade, and the Potential for Regulatory Competition and Conflict The EU’s Practice of Regulatory Cooperation Not Exporting Rules, Except... Power or Preferences: Explaining the EU’s Approach to Regulatory Cooperation The Implications for Others: Very Little Prospect for Agreement Clash Conclusions References 8 Rules of Origin: Bridging Regions to Withstand Turbulent Times Introduction Overview of ROOs Role of ROOs Main Criteria for ROOs Different ROOs Templates Effects of ROOs on Third Parties Non-Restrictive ROOs Restrictive ROOs NAFTA ROO for Ketchup Product-Specific ROOs in the PEM Convention USMCA ROOs for Passenger Vehicles Bridging Regions with ROOs Conclusion References 9 Sustainable Development in EU–Asia Trade Relations Introduction The Design of Sustainable Development Chapters in FTAs Explaining the Soft Approach: Irrelevance of International (F)actors (I) Explaining Variation in EU–Asia Agreements: Irrelevance of International (F)actors (II) Conclusion Annex References Part IV Case Studies 10 EU and South Korea: A Model Example for Foreign Trade Policy Relations? Introduction Negotiations in the Shadow of KORUS EU Perspectives Korean Perspectives KOREU: The Negotiation and Agreement Design The Negotiation Process The Agreement Design Assessment Effects on Trade and Investment Economic and Political Assessment Conclusion References 11 Australia and the EU: From Trade Tensions to FTA Negotiations Introduction The Current EU–Australia Trade Relationship Geo-economic Influences on Trade Partner Selection FTA Negotiations and the Design of the FTA Conclusion References 12 EU–Singapore Negotiations: Overlapping Negotiations, Conflicting Interests? Introduction Conditionality and EU Trade Policy EU–Singapore Negotiations in an International Context of Parallel and Overlapping Negotiations Negotiation Dynamics: Trading off Values for Commercial Interests Negotiated Outcomes: Results and Comparison Conclusion References 13 The Vietnam-European Union Free Trade Agreement: Victim of Changing Times? Introduction Geo-Strategic Motives for Launching and Concluding the EVFTA Vietnam’s Motivations EU’s Motivations Negotiation Challenges and Their Impact on Agreement Design Government Procurement Human Rights Sustainable Development Challenges in the Ratification Process Conclusion References 14 EU-Indonesia Trade Relations Introduction Geopolitical Considerations Commercial Interests (EU) Commercial Interests (Indonesia) Regulatory Issues Palm Oil and EU Environmental Regulations Indonesia’s Reaction to the RED II Conclusion References Part V Conclusion 15 Geo-Economic Motives in EU FTA’s with the Asia–Pacific: More Discourse Than Design? Introduction Beyond Rhetoric? Assessing the Policy Impact of Geo-Economic Motives Setting the Scene Designing Trade Agreements to Meet a Geo-Economic Purpose Tracing Geo-Economic Motives in Bilateral Trade Relations Contributions to the Literature Emerging Research Agenda References Index Introduction -- Part I. Negotiating trade amidst geo-economic turbulence -- Chapter 1. China growing assertiveness and its implications for EU trade policy in the region -- Chapter 2. US mercantilism and its implications for EU trade policy in the region -- Chapter 3. The changing nature of trade policy, global supply chains and EU-Asia relations -- Part II. Designing trade agreements to withstand turbulent times -- Chapter 4. Most Favoured Nation -- Chapter 5. Rules of Origin -- Chapter 6. Intellectual Property Rights -- Chapter 7. Regulatory cooperation -- Chapter 8. Sustainable development -- Section III: Parallel negotiations and overlapping agreements -- Chapter 9. EU Trade relations with Korea -- Chapter 10. EU Trade relations with Australia -- Chapter 11. EU Trade relations with Singapore -- Chapter 12. EU Trade relations with Vietnam -- Chapter 13. EU Trade relations with Indonesia -- Conclusion Contemporary trade policy is increasingly framed in geo-strategic terms. But how much of that rhetoric is reflected in actual policy choices by the European Union or its trading partners? This book provides the first systematic study of the broader international context in which EU trade agreements are conceived, negotiated, and designed. Building on a refined conceptualisation of geo-economics, the book develops a cogent framework that combines insights from scholarship on the design of free trade agreements with ideas from foreign policy analysis. Empirically, the analysis focuses on the relations between the EU and the Asia-Pacific