Abstract
This paper employs an interdisciplinary approach that combines economics with Fuzzy Analytic Hierarchy Process (FAHP) approach to de-codify the anatomy of free trade agreements (FTA) determinants focusing, in particular, on the case of EU-India FTA. The novelty of this paper is the systematic empirical analysis of the FTA determinants using FAHP. More than a hundred businesses and trade practitioners were interviewed in the EU and India to understand the lack of momentum in FTA talks. Our findings indicate that economic and political criteria are predominant FTA determinants, with market access potential (economic) as important factors driving the EU-India FTA talks. Given that results suggest similar perceptions of both the EU and India interview-ees to FTA determinants it is likely that the EU and India could find common ground and resume the languishing FTA negotiations.
Highlights
This paper aims to explore the dynamics and determinants of the 21st century free trade agreement (FTA) negotiations
The individual fuzzy pairwise comparison matrix has been created for 118 experts interviewed to assess which FTA factors are more likely to play an important role in driving negotiations
The Fuzzy Analytic Hierarchy Process (FAHP) approach has been adopted to evaluate the determinants of EU-India FTA, for which talks have been long drawn
Summary
This paper aims to explore the dynamics and determinants of the 21st century free trade agreement (FTA) negotiations. Literature shows that the analyses of trade agreements mainly examine the economic effects, with political economy experts providing insights into the determinants of FTAs (for an overview on EU-India FTA see Khorana & Garcia, 2013; Wouters, Goddeeris, Natens, & Coirtuz, 2013). This paper, focusing on the determinants of FTAs, employs a quantitative interdisciplinary approach and bridges the domain of economics and political economy using FAHP technique to provide an informed research on the determinants of EU-India FTA. The paper is structured as following: Section 1 provides the theoretical foundations of the rationale as to why countries negotiate FTAs and presents a critical review of the work by economists, political economy and social scientists on “traditional” and “non traditional” motives of FTAs. Section 2 describes the methodology and research framework; Section 3 analyses the determinants of EU-India FTA based on interviews and discussions in India and the EU; last section concludes
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