Promoting sustainable development through trade? EU trade agreements and global value chains

Arlo Poletti,Aydin B Yildirim,Daniela Sicurelli

doi:10.1017/ipo.2020.33

Abstract

AbstractSustainable development provisions have become an integral part of the European Union's (EU's) ‘new generation’ trade agreements. Yet, a growing number of empirical works show that their design varies significantly, even in the trade agreements signed with countries at similar (low) levels of development. We contend that this variation can be accounted for by discussing how the growing integration of the EU economy with specific developing countries across global value chains (GVCs) affects the domestic politics of regulatory export in the EU. European firms that operate within GVCs rely on imports of inputs produced in low-labor cost countries. These firms tend to oppose the export of those regulatory burdens that generate an increase in their imports' variable costs. The political mobilization of these actors weakens domestic coalitions supporting regulatory export strategies, which explains why the EU adopts a more lenient approach over the inclusion of sustainable development provisions in Preferential Trade Agreement negotiations with some developing countries.

Highlights

In its official rhetoric, the European Union (EU) consistently portrays itself as an international actor committed to using trade agreements as tools to promote sustainable development, in the context of its trade relations with developing countries (European Commission, 2006, 2012, 2015)
We have made a plausible case that observed variations in the sustainability provisions included in the trade agreements signed by the EU with different developing countries can be ascribed to their different degrees of integration in global value chains (GVCs)
We presented evidence in support of the argument that high levels of integration between the EU and its developing trading partners in GVCs stimulate the political mobilization of import-dependent firms opposing the inclusion of stringent and enforceable sustainable development provisions that would entail negative distributive consequences for them in the form of increased variable costs of imports

Summary

Introduction

The European Union (EU) consistently portrays itself as an international actor committed to using trade agreements as tools to promote sustainable development, in the context of its trade relations with developing countries (European Commission, 2006, 2012, 2015). When the EU engages in trade negotiations with developing countries with which it is highly integrated into GVCs, these import-dependent firms will mobilize politically to avoid the inclusion of labor and environmental provisions that will entail negative distributive consequences for them (Eckhardt and Poletti, 2016).

Results

Conclusion