Transformations in Global Economic Governance: Integration via Free Trade Agreements

Lead Research Organisation: Bournemouth University
Department Name: Faculty of Management

Abstract

The seminar series aims to generate new research, create networks, foster capacity building and user engagement by providing an interdisciplinary forum for debate and discussion on: (a) the regulatory, economic and social aspects of regional integration through FTAs; (b) what FTAs bring to partner countries; and (c) the current state of play in FTA activity in the EU, USA and Asia. By providing a wide geographical spread of seminars that focus on specific themes of regional trading agreements, its effects and the move towards a common regulatory framework, we propose to engage with academics, early career and established researchers from all over the world to create new research networks and build on existing works as well as engage with and bring together stakeholders, i.e. policy makers, small and medium sized businesses and civil society groups, that have an interest in FTAs being negotiated in and by Asia, EU and America.

Broadly the seminar series focuses on: first, understanding the rationales behind FTAs and how the EU, USA and Asian FTAs interact with one another; second, how FTAs under negotiation could affect the policy choices of governments and business environments around the globe; and third, gaining a comprehensive overview of how the move to common regulatory systems under bilateral FTAs are likely to determine future rules of global trade governance.

Seminar 1 highlights the general trends in FTAs. Main issues for discussion include: rationale for growing FTAs, and the recent developments that provide momentum for countries to negotiate FTAs. How are the EU and USA driving FTA negotiations in Asia? What are the economic and social impacts of FTAs? Is the internal and external environment important in setting trade policy agenda? Are the dynamics of negotiations driven by constructivist or neo-realist framework of international relations? (Seminar venue: Keele)

Seminar 2 looks at the EU's rationale for negotiating FTAs with Asia and USA. This includes a discussion on social, economic, political, geo-political and political economy aspects of FTAs, and how trading agreements are an integral part of 'Global Europe' strategy and foreign policy. (Seminar venue: London)

Seminar 3 offers a comprehensive analysis of Asian FTAs, its rationale, and comments on factors that drive FTA negotiations in the region. This sheds light on the growing inter-linkages between Asian and European global production networks, and comments why India unlike (China and ASEAN) has not been able to benefit from regional value chains. It also addresses the questions as to how can Indian firms integrate into FTA production chain activity? (Seminar venue: New Delhi)

Seminar 4 looks at the state of play of ongoing bilateral FTA talks between EU and USA. The seminars takes stock of the current state of negotiations and comments on contentious issues that have emerged in ongoing talks. This also examines how and why the Transatlantic Partnership is driven by aim of eventual regulatory convergence between the trading partners. (Seminar venue: Bath)

Seminar 5 evaluates EU and US FTAs including those with Asian countries, commenting on areas of differences/commonalities in FTAs negotiated and the general move towards regulatory convergence/divergence. This provides a comprehensive, comparative and systematic research on the scope and enforceability of regulatory norms negotiated under FTAs. The seminar also highlights the importance of labour and social standards within FTAs and the relevance of addressing these issues within the context of global trade governance. (Seminar venue: Brussels)

Seminar 6 examine the emerging dynamics of FTAs, debates whether such agreements can be a stepping stone to future multilateral liberalisation or whether this could lead to fragmentation in world trade. It also comments on what role the EU and USA play as global actors in shaping a functioning multilateral order. (Seminar venue: London)

Planned Impact

The seminar series and outputs will benefit three distinct groups of stakeholders:
1. Policy-makers, particularly EU trade negotiators and policy-makers, as well as EU Member States' policy-makers
2. Civil society groups and think tanks
3. European business community, especially SMEs and European Business Associations

Policy-makers will be able to refine future policies and negotiating strategies on the basis of the knowledge generated throughout the seminar series, with an emphasis on the understudied business and social consequences of economic integration through FTAs.

Civil society groups, including environmental groups, trade unions, NGOs, community groups, consumer groups will have access to the same information as policy-makers regarding the benefits and pitfalls of economic integration, thus broadening their perspectives on these matters and enabling them to enhance their engagement in the policy-making process. Further, the findings will feed into think tanks work on FTAs.

Businesses, especially SMEs, are the stated targets of economic integration policies. However, they often lack the knowledge and resources to follow developments in FTAs and take advantage of new market access and trade facilitation measures that have been negotiated by policy-makers. Thus, the seminar series will transfer up-to-date information on FTAs and business practices to SMEs.

After each seminar, a brief indicating the main discussions and their conclusions will be prepared by the PI and CO-I, and published on the project website. Participants will be asked to facilitate updated bibliography on register their projects (if any) on the project website so that resources are readily available to the policy makers, practitioners, academics, and the general public.

The list below provides an overview of some government and non-government organisations which have been identified as having a potential interest in the findings of this seminar series as well as in the (further) activities generated in and by the website:
Government agencies: Department of Trade and Investment; European Commission Trade directorate, trade negotiators of USA, EU and Asian countries.
Institutions: European Commission DG Trade, European Parliament International Trade Committee, ECIPE, Temasek Foundation Centre for Trade & Negotiations. Centre for Sciences Humaines in New Delhi, which is a French government institution for research, has expressed a keen interest in the seminar series and has offered to provide local assistance in hosting the seminar in New Delhi (in June 2015). This highlights the significance of our seminar series for businesses and the wider academic community in Asia.
NGOs: OXFAM (UK); FRIDE (Belgium); CUTS (India); Medecins sans Frontiers (France); WIDE-Network (Netherlands).
Business Associations: Confederation of British Industries; Business Europe; EuroChambres; AmCham; European Services Association; Asian Business Federations.

Publications


10 25 50
Khorana S (2016) India and the Indian Ocean region in Journal of the Indian Ocean Region

Related Projects

Project Reference Relationship Related To Start End Award Value
ES/M002586/1 31/12/2014 31/07/2015 £28,411
ES/M002586/2 Transfer ES/M002586/1 01/08/2015 31/03/2017 £20,972
 
Description KEY FINDINGS: that emerged from the various presentations, and from the discussions and exchanges amongst participants, at the two recent workshops, held in New Delhi and Bath in November 2016 and January 2017 respectively, can be classified under the following broad categories:
1. 'Unintended' consequences of TTIP on third parties:
Discussions uncovered how the consolidation of TTIP negotiations is limiting the policy space available to developing and emerging nations to propose alternatives to the USA-EU led, 'deep' trade liberalisation agenda, that they had collectively rejected at the WTO Doha Round. ('Deep trade' agenda involves the liberalisation of service trade, facilitation of trade through regulatory cooperation or convergence, opening of government procurement markets, convergence of competition policies). Although TTIP presents some potential opportunities for developing states (e.g. possible reduction in trade costs if EU and USA agree to same regulatory standards, potential for both parties to harmonise their rules of origin in their respective Generalised System of Preferences for developing states), these states have expressed concerns about the potential for investment diversion, and the possibility that TTIP standards may result too costly for capacity-constrained developing states). Trade diversion from TTIP is unlikely to be significant for developing states in Africa, however, now that the USA has signed the Trans-Pacific Partnership (TPP) which includes middle income nations in South East Asia, African textile exporters will suffer from preference erosion in the American market, showing how developing states can be impacted by 'mega' trade agreements outside of their control (Vickers). It was suggested the EU and USA could pre-empt possible negative spillovers from TTIP for developing states by taking a more pro-active approach to harmonising their own trade policies towards developing states, engaging developing states more and facilitating financial support and assistance to enable developing state producers and bureaucracies with compliance costs and adaptation to new standards created by TTIP (Vickers). TTIP's long shadow casts is also impacting the preferences and strategies of governments across the globe. After decades of disarray within Mercosur, in part due to the changing preferences of various Brazilian and Argentine Presidents over time, in particular, Argentina's Cristina Kirchner's ambiguous position regarding trade and liberalisation and Mercosur and the Bolivarian Alternative for the Americas, states within the Mercosur, especially Uruguay and Paraguay, are ready to break ranks within Mercosur and are actively attempting to negotiate individual free trade agreements with the USA and EU. Mercosur states are increasingly feeling the pressure of being some of the few remaining Latin American states in Latin America (and more generally) without preferential trade agreements with the EU and USA, and as these two powers further their rapprochement through TTIP, the perception of being an outsider and in a disadvantageous position increases (Gomez). Although TPP (through the possibility of further accessions to the treaty) and TTIP (through the aim of creating global standards and then uploading TTIP to WTO) aim to curtail the diffusion of 'spaghetti bowls' of criss-crossing FTAs with divergent regulations, its effect in Mercosur, thus far, is one of disintegration and expansion of FTAs, as Mercosur states attempt to devise individual (rather than a collective) strategies to remain relevant in a climate of increased preferential trade deals.
2. TTIP and conceptual understandings of the EU as foreign policy actor: Recent conceptual models which characterise the EU's external action as a Market Power, have the advantage of combining various other conceptualisations of the EU (as a single market, as a regulatory authority, and as a locus for interest contestation). Market power is exercised through positive (aid, preferences) and negative tools (boycotts, reduction of aid, suspending preferences) in order to achieve behavioural changes in other states that comply with EU preferences and interests (Damro). TTIP presents a crucial case for the validity of this conceptualisation, as the USA shares the market power characteristics that the EU displays, raising questions as to the EU's ability to externalise its power and preferences when faced with an equal counterpart. In this case, thus far, rather than outright externalisation of preferences, what we are witnessing is externalisation via coordination. Given the similar levels of regulatory capacity in the EU and USA, it is expected that reciprocal externalisation of preferences will occur via coordination and a process of policy adjustment. In the longer term, as transatlantic regulators coordinate their positions more closely, interactions and socialisation will lead to policy adaptation in both parties.
3. Effects of TTIP negotiations
Participants highlighted how TTIP has polarised public opinion. Moreover, what is being contested goes beyond issues relating to the content of the negotiations (e.g. possible acceptance of different and/or lower food safety standards, inclusion of dispute settlement mechanisms between investors and states), but crucially it is the process itself that is being questioned. If there are concerns about input legitimacy (whose voices are being heard and heeded to), process legitimacy is also being contested (Smith). TTIP negotiations have already altered some past customs and processes in international negotiations. For instance, in response to public outcry regarding the secrecy of negotiations, for the first time in a negotiation, the European Commission has opted to publish its positions and make various texts available.
More importantly, the process of negotiations, itself, is already having an effect on regulations, as new legislation being drafted in the EU is already taking into account possible future incompatibilities (European Stability Mechanism, includes some investor-state dispute settlement arrangements already), so that once a deal is finally negotiated, it can be claimed that it changes EU regulations very little, and therefore assuage dissent (Papadopoulus). This is especially relevant for the European side, as US regulators have been adamant (especially the US Treasury) in rejecting interference with their processes, rather than understanding European processes, and are pressured by USA firms to extend the American model of business participation in legislation rather using already existing opportunities (Egan).
Exploitation Route The findings will be put to use by four distinct groups of stakeholders:
1. Policy-makers, particularly EU trade negotiators and policy-makers
2. Post graduate students and academic community
3. CSOs, NGOs and think tanks
4. Business community, especially small and medium enterprises (SMEs).
Officials from the European Commission (Delegation to India), WTO Appellate Body, Ministry of Health in India, Federation of Indian Chambers of Commerce and Industry, Federation of Indian Micro and Small and Medium Enterprises, Trade Secretary of India, and Commonwealth Secretariat (Deputy Trade Advisor, Commonwealth Secretariat) participated at the workshops. The findings of the seminars will be of use to the policy makers who will be able to refine future policies and negotiating strategies on the basis of the knowledge generated throughout project deliberations, with an emphasis on the understudied business and social consequences and rationale for FTAs, and in 'new' areas of trade and economic integration.
The seminars focus on building research capacity among PGR students and generating new research ideas from an interdisciplinary perspective, as well as disseminating new advances. Focusing on extending skills and novel modelling advances, for all, and in particular for the benefit of early career researchers, Dr Badri Narayan from Purdue University and the prestigious GTAP project presented a master class in advances in techniques for refining GCE models for trade modelling. The academic community will benefit from: (a) research in the cross-cutting areas of FTAs that will lead to cross fertilisation of ideas between different disciplines; (b) help identify areas with potential for research cooperation. Thus, new knowledge will be added to the domain of existing knowledge in economics, political economy and legal fields.
Selected presentations from the Workshops have been uploaded onto the GIFTA website for open access dissemination (some presenters did not wish to have their papers and videos of their presentations online)
A project Twitter account @GIFTAproject, and dedicated website (www.giftaproject.org) are used to announce calls for papers, publications, policy briefs and uploads onto website.
OUTOUTS THAT WILL BE USED BY ABOVE STAKEHOLDERS:
1. Policy Briefs:
New briefs series published online:
i. Impact of Integration in Asia and the Pacific Region (Rahul Arora, Sarbjit Singh and Somesh K. Mathur, Indian Institute of Technology (IIT) Kanpur, India)
iii. The Increasing Role of the European Parliament in the EU FTA Negotiations (Magdalena Frennhoff Larsén, University of Westminster)

2. Handbook on European Union International Trade
All contributors have now signed the contracts with Edward Elgar, and we aim to convene an authors' workshop in June to coincide with the 5th Workshop to exchange chapter drafts.
3. Recent publications by PI-CI:
i. Khorana, S. (ed.) (2015) The Transatlantic Trade and Investment Partnership (TTIP) Negotiations between the EU and the USA: Caught between myth and reality?, CIBOD Colección Monográfica, Barcelona
4. Progress on other outputs: Proposals for special issues were submitted to high impact publications, Journal of Common Market Studies and Journal of European Public Policy, which although both rejected the special issue, both praised the quality of the proposal and encouraged the submission of the articles separately. Proposals for special issues distilling the workshop findings are being put forward to other journals.
Sectors Communities and Social Services/Policy,Financial Services, and Management Consultancy,Government, Democracy and Justice