Abstract
The following article offers a critical engagement with recent economic constructivist scholarship as a means of understanding the nature of the European Union’s ‘market power’. It does so by focusing on the African, Caribbean and Pacific group of countries, and seeks to explain why — in spite of the European Union’s preponderant market power — the goal of promoting trade liberalisation and regulatory harmonisation through regional Economic Partnership Agreements (EPAs) ultimately fell short of original ambitions. We highlight the inadequacies of materialist accounts of the European Union’s market power in this case and instead take our cue from the (predominantly) constructivist literature emphasising the role of transnational advocacy coalitions. We argue, however, that the latter do not go far enough in their exploration of the non-material correlates of the European Union’s market power by considering fully its discursive dimension. To address this shortcoming, we draw on Craig Parsons’ distinction between ideational and institutional logics of explanation to understand how the invocation of institutional constraints affects the impact of particular discursive strategies. We argue that, in our specific case, the success or failure of the Economic Partnership Agreements rested not just on the fungibility (or otherwise) of the European Union’s material power or the campaigning of transnational coalitions, but on the congruence between the ideas used by European Union policy actors to justify the Economic Partnership Agreements and the institutional norms associated with the setting in which these ideas were deployed.
Keywords
Introduction
In this article, we offer a theoretical and substantive contribution to debates concerning the European Union’s (EU) external relations with the Global South. In doing so, we encounter two interconnected ideas familiar to students of International Relations and EU Studies. The first is that the EU’s power in the international system stems from the size of its internal market — that is, its ‘trade’ or ‘market power’ (Damro, 2012; Meunier and Nicolaïdis, 2006; Young and Peterson, 2014). The second is that this market power affords the EU the ability to export its own distinctive model of regional capitalist development to the Global South (Aggarwal and Fogarty, 2004; Grugel, 2004; Söderbaum and Van Langenhove, 2005; Telò, 2007). The empirical focus of the article is the EU–African, Caribbean and Pacific (ACP) economic partnership agreements (EPAs): specifically, we ask why — in spite of the EU’s preponderant market power — the goal of promoting trade liberalisation and regulatory harmonisation among the ACP through regional integration ultimately fell short of original ambitions. In essence, the EPAs were designed to be both consistent with and complementary to multilateral trade disciplines by (re)introducing the principle of reciprocity to EU–ACP trade relations, while extending the coverage of this to services and the so-called ‘Singapore issues’ (competition policy, trade facilitation, government procurement and investment), which were introduced to the multilateral trade agenda at the World Trade Organization’s (WTO’s) inaugural ministerial meeting in 1996. To date, four out of a possible seven regional EPAs have been concluded (or are close to conclusion) but only one of these — the EU–CARIFORUM 1 EPA of 2008 — comes close to matching the original prospectus.
How do we account for this suboptimal outcome? According to Chad Damro (2012: 682), the EU constitutes a ‘market power’ because of its ability to exercise leverage over third countries through the ‘externalisation of economic and social market-related policies and regulatory measures’. In the case of the EPAs, however, bargaining outcomes appear to be only weakly correlated with the EU’s market power vis-a-vis individual ACP regions and states (Murray-Evans, 2015; Nyaga Munyi, 2015). This discrepancy belies the general analytical thrust of much of the EU–ACP trade literature from the early 2000s, which interpreted the EPAs through the lens of the EU’s independent, political and commercial interests (Brewster et al., 2008; Farrell, 2005; Goodison, 2007; Hurt, 2003, 2010, 2012; Stoneman and Thompson, 2007). In other words, these accounts took the outcome of the EPA negotiations for granted, focusing on the (anticipated) economic implications of the agreements instead of their political feasibility. In response, more recent contributions to the literature have focused less on economic imperatives and more on political contingencies (Del Felice, 2012; Hurt et al., 2013; Trommer, 2013). One variant of this literature — which is of particular relevance to this article — draws attention to the non-material aspects of the EPAs and, more particularly, the role of transnational advocacy coalitions (ACP governments, sceptical EU member states, non-governmental organisations (NGOs) and activists) in rebutting the EU’s depiction of the EPAs as ‘non-coercive’ and ‘development-friendly’, and, instead, portraying them as coercive, driven by commercial self-interest and potentially deeply damaging to the ACP. Elijah Nyaga Munyi (2015), meanwhile, attributes the successes and failures of the EPA negotiations to the degree of (neoliberal) norm convergence between EU trade officials and their counterparts in the ACP.
Although these contributions serve to capture the importance of political and discursive contingencies, our point of departure is to suggest that they do not go far enough in their exploration of the non-material correlates of North–South trade negotiations. In other words, the economic determinism implicit in the early EPA literature based on the presumption of the fungibility of the EU’s market power may have proven an inaccurate guide to the course of the negotiations, but if non-material factors provide the answer, we are inclined to ask why the EU’s own recourse to these appears to have been less successful than the strategies employed by ACP governments and transnational advocacy coalitions. In addressing this oversight, we situate the present case in the context of broader economic constructivist scholarship concerned with the causal role of ideas in political analysis. Here, we are most interested in what has been labelled the ‘path of uncertainty’ (Abdelal et al., 2010) strand of the literature, which highlights the fundamental uncertainty of the social world in which actors are positioned and the crucial role that ideas play in enabling agents to pursue interests. However, whereas the main applications of this approach have been in determining the circumstances in which ideas might bring about institutional change (Abdelal et al., 2010: 12–13; see also, among others, Blyth, 2002; Hay, 2002, 2011; Schmidt, 2002, 2008; Widmaier, 2004; Woll, 2008), we turn this puzzle on its head to consider how the strategic invocation of institutional constraints might affect the impact of particular discursive strategies. To do this, we make use of Craig Parsons’ (2007) distinction between ideational and institutional logics of explanation.
When combined, Parsons’ ideational and institutional logics provide the key to understanding why the EU failed to persuade sceptical ACP governments of the merits of comprehensive EPAs. We argue that the success of the EPAs rested on a congruence between the ideas used by EU policy actors to justify the EPAs and the institutional norms associated with the setting in which these ideas were deployed. On the one hand, the EPAs were justified as a legally necessary response to institutional imperatives for trade reciprocity created by WTO dispute-settlement rulings; on the other hand, they were justified as normatively desirable as a means of promoting market-oriented policy reforms designed to enhance economic competitiveness. Although the congruence between these two sets of justifications was initially present, as we shall show, it soon began to disappear. That is to say, the presumed necessity of ‘WTO compliance’ initially enabled EU policy actors to conflate the desirability of the EPAs with the legal necessity of conformity with the WTO. However, over time, the contradictions of this framing were revealed, thus serving to blunt the effectiveness of the EU’s discursive strategy. It was the absence of congruity between these two sets of justifications, the article will conclude, that ultimately undermined the claimed necessity of the EPAs, which, in turn, created the discursive space for ACP governments and transnational advocacy coalitions to reject their claimed desirability. 2
The analysis presented in the remainder of the article draws on over 100 interviews and background briefings with EU and ACP staff, government officials, and representatives of the private sector and NGOs, conducted by the authors in Brussels, Geneva, the Caribbean, Pacific and Southern Africa between 2009 and 2015. The argument also draws upon the analysis of publicly available European Commission, ACP and civil society documents. 3
The separate but interconnected logic of institutions and ideas
A common motivation for incorporating ideas into institutionalist analysis has been to address a perceived problem that other varieties of institutionalism (rational choice, historical, sociological) have in explaining institutional change over time. Scholars following the constructivist ‘path of uncertainty’ — in which the space for ideas in political processes is created by the complexity and ambiguity of the social world — have dominated attempts to use ideas to understand institutional change. Much of this work has been dedicated to understanding when and why ideas matter — that is, when ideas reconstitute actors’ goals and strategies in ways that require institutional change rather than continuity (Schmidt, 2008: 311). In particular, ‘discursive institutionalist’ (Schmidt, 2008) scholarship has tended to focus on the role of ideas in bringing about change during periods of institutional crisis (Blyth, 2002; Culpepper, 2008; Hay, 1996, 2013; Schmidt, 2014; for a critique, see Carstensen, 2011). By contrast, in this article, we explore the interaction between institutions and ideas over time, and, more specifically, investigate how far the strategic invocation of institutional constraints affects the impact of particular discursive strategies. In this way, our approach provides a response to critiques of discursive institutionalism that highlight ‘a lack of empirically grounded theorizing about how agents and their ideas actually connect with institutions’ (Bell, 2011: 887). In addition, by stressing the key role of path-dependent institutions in our analysis, we contribute to recent attempts to create a fruitful synthesis between constructivism and agency-oriented historical institutionalism (Bell, 2011, 2012; Carstensen, 2011). 4
To do this, we make use of Craig Parsons’ distinction between ‘institutional’ and ‘ideational’ logics of explanation. According to Parsons (2007: 67), an institutional logic refers to the ways in which ‘the setting-up of certain intersubjectively present institutions channels people unintentionally in certain directions at some later point’. Institutions as defined here encompass formal organisations and rules, as well as informal rules, norms and shared meanings, and they are assumed to relate to action in an unambiguous fashion in line with rationalist expectations (Parsons, 2007: 66). An ideational logic, meanwhile, ‘explains actions as a result of people interpreting their world through certain ideational elements’ (Parsons, 2007: 96). Although, at first glance, institutional and ideational logics of explanation appear incommensurate, Parsons suggests that they can be fruitfully combined. He states: If practices, norms, symbols, and so on can relate to action in different ways, then the same practice, norm, or symbol might affect some people in an institutional way and others in an ideational way… [and] these dynamics could run parallel to each other vis-à-vis the same individual. (Parsons, 2007: 100–101)
Parsons, nevertheless, criticises existing attempts to combine these logics because they lack explicit analysis of ‘when and how much action reflects one or the other [logic of explanation]’ (Parsons, 2007: 89). In what follows, we delineate a theoretical frame designed to avoid these pitfalls and show how Parsons’ institutional and ideational logics of explanation can be applied to understanding the success — or otherwise — of particular discursive strategies.
In order to do this, we propose a logic of explanation that incorporates ideas and path-dependent institutions in an ontologically consistent manner. To do so, we diverge from Parsons’ suggestion that once path-dependent institutions are set in place, their relationship with action can be explained by rationalist expectations about actor behaviour. Rather, institutional norms, understandings, practices or organisations can be intersubjectively present and exhibit a path-dependent logic while, at the same time, providing enough ambiguity and uncertainty to allow contrasting interpretations and responses by different actors. As Colin Hay (2002: 212–214) argues, political institutions, practices, routines and conventions are ‘strategically and discursively selective’ but do not fully determine how actors will choose to behave. In order to explain how this logic of explanation can help us to understand the success or failure of particular discursive strategies, we draw on the work of Colin Hay and Ben Rosamond, on the one hand, and Frank Schimmelfennig, on the other.
Hay and Rosamond (2002) analyse the ‘discursive construction of economic imperatives’ as a persuasive rhetorical strategy. They contend that actors are able to employ strategic discourse (see Rosamond, 2000) as part of deliberate ends-oriented actions to further their (perceived) interests. Policymakers, they claim, can and do use rhetorical strategies that appeal to a particular interpretation, or construction, of contingent and ambiguous economic phenomena — specifically, in this case, globalisation — as immutable ‘material’ imperatives. They do this in order to predetermine choices, close down alternatives and make the case for politically painful economic adjustment. As Gabriel Siles-Brügge (2014) points out, Hay and Rosamond’s formulation contains an implicit acknowledgement of the close relationship between knowledge and power. 5 As such, ‘Globalisation is not simply seen as a (material) conditioning structure but rather as a zone of (political) contestation … where control of knowledge about this so-called economic process becomes an exercise of authority’ (Siles-Brügge, 2014: 44–45). Hay and Rosamond, however, do not tackle the ancillary question relating to when these rhetorical appeals might be more, or less, successful in influencing the behaviour of the target audience.
This shortcoming notwithstanding (which we shall return to shortly), we suggest that Hay and Rosamond’s model can be extended to discursive appeals to institutional as well as economic or material imperatives, and that such appeals may have specific consequences as a function of the path-dependent features of institutional structures. Here, we draw on Frank Schimmelfennig’s (2001: 48) use of the concept of ‘rhetorical action’ — that is, ‘the strategic use of norm-based arguments’ — to understand the EU’s successful eastern enlargement programme. He argues that those EU member states with a preference for enlargement used rhetorical action — invoking the established principle that the EU should constitute a ‘pan-European community of liberal-democratic states’ — in order to ‘shame’ the opponents of enlargement into norm-conforming behaviour (Schimmelfennig, 2001: 48). Schimmelfennig has been criticised for ontological inconsistency because, in his framework, EU member states seem to be motivated both by materially determined interests and the effects of socialisation (Siles-Brügge, 2014: 212). However, the key point to take from his work is that norms (and other institutions) may be invoked strategically as imperatives for particular types of action in the same way as economic imperatives are invoked in Hay and Rosamond’s schema.
Furthermore, a path-dependent institutional logic is implicit in Schimmelfennig’s argument: he argues that the institutionalised commitment to the creation of a community of liberal-democratic states across Europe created a path-dependent constraint that converged with the preferences of proponents of enlargement and enabled them to persuade other member states to comply. It follows that where actors’ preferences converge with a path-dependent and institutionalised norm or rule, rhetorical strategies that appeal to this institution are more likely to prove persuasive. This is because actors can invoke this institution to paint their favoured outcome as not only desirable, but also necessary in order to comply with a shared and agreed — and, in some cases, formally codified — norm, standard or practice.
In order to avoid the ontological inconsistencies noted in Schimmelfennig’s work, we take the position that actors use rhetorical strategies in pursuit of their interests, but that these interests are perceived as opposed to materially given. As they are situated within uncertain material and institutional contexts, actors must use reflexive understandings in order to define their interests and to decide on the best strategies to pursue them. Further, because institutional norms are ambiguous and contested, actors can seize upon this ambiguity and flux to construct particular projections and interpretations as being convergent with their policy preferences. As was the case with material structures in Hay and Rosamond’s formulation, here institutions become not just conditioning structures, but zones of political contestation. What makes the account of discursive action presented here distinctive from that of Hay and Rosamond is its emphasis on the path dependence of institutional structures and the consequences of this for strategic rhetorical appeals to institutional constraints. Specifically, the path-dependent logic of institutions may affect the persuasiveness of rhetorical appeals to institutional norms and standards. While institutions may be ambiguous and contested, they also exist at least partially independent of any particular rhetorical appeal or political strategy in which they are invoked. As such, institutional appeals can all too easily fail to take account of path dependencies that shape eventual policy discourses and actions in unintended and contradictory ways. Furthermore, path-dependent processes (as well as the evolution of actors’ policy preferences) may lead to divergence between policy preferences and institutional norms and rules over time, blunting the effectiveness of appeals to institutional norms as a rhetorical strategy. As such, we are able to explain why a rhetorical appeal to an institutionally embedded norm or rule, designed initially to lend a sense of necessity or legitimacy to a preferred set of policies or actions, may become hostage to institutional path dependencies that render the rhetorical strategy ineffective or even counterproductive.
The EU–ACP EPAs
The background to the EPAs is by now familiar (Grilli, 1993; Heron, 2013; Ravenhill, 2004), so does not need to be repeated here beyond the following summative points. Launched in February 1975, the Lomé Convention granted the ACP duty-free market access to the EU on a non-reciprocal basis for almost all goods, including a series of commodities (bananas, beef, rum and sugar) that also benefited from internal price support mechanisms. The Lomé regime was renewed on three separate occasions — in 1981, 1985 and 1989 — but was ultimately deemed to have failed in its principal objectives of promoting economic growth and diversification (European Commission, 1996). Important as these policy failings were, however, the key catalyst for the abandonment of Lomé was its inconsistency with multilateral trade disciplines following the creation of the WTO and its Dispute Settlement Understanding (DSU) in 1995. Although the EU possessed the option of securing a legal waiver to defend the integrity of Lomé, the decision was taken to recast the entire trade relationship with the ACP to ensure its WTO ‘compatibility’. The EU–ACP Cotonou Partnership Act of 2000 thus introduced the formula of replacing Lomé with a series of reciprocal EPAs based on six (later seven 6 ) ACP regions, in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT). 7 Further, by extending the principle of reciprocity to services and the Singapore issues, the EPAs would be consistent with but also complementary to the WTO given their (at the time) recent introduction to the multilateral trade agenda.
In October 2008, CARIFORUM became the first region in the ACP to conclude a comprehensive EPA in accordance with this prospectus. Yet, despite the precedents set, the CARIFORUM EPA now stands as a high point in the EPA negotiations and, to date, remains the only agreement of its kind. As Table 1 shows, the remaining members of the ACP have signed or initialled regional or subregional ‘goods-only’ EPAs — containing only rendezvous clauses for further discussion of services and the Singapore issues (Ramdoo, 2014) — or have chosen not to sign an EPA at all.
EPA state of play, September 2015.
Notes: aLeast Developed Countries (LDCs). bGoods-only EPAs in these regions were initialled in 2014 but have not yet been signed and ratified.
The failure to reach comprehensive EPAs outside of CARIFORUM presents students of International Relations and EU Studies with a striking analytical puzzle: why is it that — despite its preponderant market power — the EU has encountered so many difficulties translating its preference for freer trade and closer economic integration with the ACP into a series of comprehensive agreements? The most straightforward solution to this puzzle falls back on classic trade dependence explanations (cf. Hirschman, 1980 [1945]; Manger and Shadlen, 2014). This approach is not without merit — especially in relation to the Least Developed Country (LDC) members of the ACP, as we shall see — but it provides too few clues as to why regions and countries with high levels of trade dependence have been reluctant to conclude comprehensive agreements, and vice versa (Murray-Evans, 2015; Nyaga Munyi, 2015). The alternative solution is to look at the role of non-material factors in determining EPA outcomes, especially competing discursive representations of the developmental consequences of the agreements. Here, a number of existing accounts of the EPAs stress the importance of discursive contestation of the EU’s negotiating agenda by a transnational group of activists (Del Felice, 2012; Hurt et al., 2013; Trommer, 2013). In this vein, both Celina Del Felice (2012) and Stephen Hurt et al. (2013) claim that the discursive tactics employed by these actors had a significant bearing on the EPAs by persuading EU policymakers to look again at the most controversial aspects of the negotiations. Similarly, Silke Trommer (2014) highlights the way that ACP governments in the West African regional configuration were able to challenge the EU’s agenda by seizing on ambiguities in the legal frameworks governing the international trading system. While these accounts tap into an important dynamic in the EPA negotiations, they do not tackle the related question of why the EU’s own rhetorical action — backed by its market power and considerable diplomatic capacity — appears to have failed to persuade most ACP governments of the merits of comprehensive EPAs. It is here that we turn to an examination of the EU’s discursive strategy in the EPA negotiations — and particularly the use of strategic appeals to WTO rules as an external imperative for ACP reform — using the theoretical framework outlined earlier.
Rendering the contingent necessary: Lomé and WTO compliance
The customary starting point for accounts of the EPAs is the issue of WTO compliance (Faber and Orbie, 2009; Gibb, 2000; Hurt, 2003; Ravenhill, 2004). The key summative point is that while the Lomé regime could have been rendered ‘WTO-compatible’ without the need for reciprocity — through, for example, obtaining a legal waiver for which numerous other precedents exist under the WTO — EU policymakers chose to present this discursively as an immovable and external constraint in order to justify market-oriented trade and trade-related policy reforms. Even so, the extant literature that is most explicit in identifying the ideological thrust of the EPAs (Gibb, 2000; Hurt, 2003) failed to anticipate the modest success of this discursive strategy. Put another way, these accounts rested on the assumption that the beliefs in the efficacy of trade liberalisation and regulatory harmonisation held by powerful actors could be straightforwardly translated into substantive political outcomes.
To the extent that this has not occurred, we argue that it is necessary to consider more carefully the relationship between ideas and institutions in explaining actual outcomes. In this specific case, the promotion of the EPAs by EU policy actors initially rested on a strong congruence between the claimed institutional imperative for reciprocal free trade created by WTO rules and the EU’s normative preference for comprehensive ACP trade reform. In the early stages of the negotiations, this congruence between EU actors’ preferences and the trajectory of the institutional norms that governed global trade enabled the EU to pursue a discursive strategy that constructed the reform of the Lomé regime as not only desirable, but also necessary in order to comply with codified and legally enforceable WTO rules. It soon became clear that EU preferences had diverged from the path-dependent trajectory of the WTO. This created opportunities for a range of other actors to contest the EU’s invocation of this external institutional constraint and ultimately to successfully challenge the rationale for comprehensive EPAs.
The starting point, then, is to consider the initial congruence between changing legal and institutional norms in the WTO and the EU’s independently determined policy preferences, which enabled the latter to discursively construct trade reforms as not only desirable, but necessary. As noted earlier, the key catalyst for the demise of Lomé and the shift towards reciprocity was said to be adverse legal rulings against the EU’s banana protocol under both the GATT and the WTO. The seminal event here was the conclusion of the Uruguay round (1986–1993) — leading to the creation of the WTO and the adoption of the DSU, the latter giving WTO dispute settlement a greater degree of automaticity and legal robustness (Heron, 2014; Narlikar, 2005).
The original dispute in relation to Lomé was provoked by the creation of the single banana market in 1992 as part of the implementation of the Single European Act (Alter and Meunier, 2006). This led to a series of rulings — in 1993, 1994 and 1997 — that found the banana regime in contravention of various aspects of GATT trade law, including Article I (non-discrimination) (see Heron, 2013, 2014; Petersmann, 1997; Spiegel, 2000). The GATT ruling, in effect, signalled that the entire Lomé regime was open to legal challenge — a challenge rendered far more likely to succeed in the light of the impending introduction of the DSU (Heron, 2014: 14). The EU’s immediate response was to seek and subsequently obtain a five-year waiver for Lomé (later extended until the end of 2007) (Feichtner, 2012: 116–119; Heron, 2014: 14). However, the Commission subsequently ruled out further waivers and the continuation of the status quo, making it clear in a seminal 1996 Green Paper that its intention would be to recast the entire Lomé system in a way that would ‘achieve respect for the relevant WTO rules’ (European Commission, 1996: 22). The reason given for this was the tightening of rules covering the granting of legal waivers under the WTO. 8 Yet, this argument was not entirely persuasive. First, the main grievance in the banana dispute did not relate to the granting of special trade preferences for ACP banana producers, nor did any of the complainants oppose the granting of a waiver from Article I for Lomé (Barfield, 2003; Ravenhill, 2004: 129). Further, Lomé was no different in principle to other non-reciprocal preferences granted by the US, Canada and Australia, established before and after the DSU came into operation.
All this suggested that the demise of Lomé was driven as much by the changing preferences of European policymakers — shaped by their growing faith in the universal benefits of trade liberalisation and other market mechanisms (Brown, 2000) — as it was by the strengthening of WTO rules. Indeed, in 1992, a review of EU development policy by the Commission adjudged that the EU’s previous development efforts had resulted in ‘complete failure’ for a large group of developing countries and concluded that ‘external aid is only effective when it backs sound development strategy’ (European Commission, 1992: 1). Likewise, the policy diagnosis of Lomé offered by the 1996 Green Paper placed heavy emphasis on the role of ‘supply-side’ blockages, declaring that the ‘state of institutions and economic policy in the recipient country have often been major constraints’ on the effectiveness of trade preferences (European Commission, 1996: iv). In this way, unilateral trade preferences were deemed problematic to the extent that they inhibited market reforms even prior to the introduction of strengthened multilateral rules.
Having decided more or less independently on the need to recast the EU–ACP relationship, the invocation of legal norms was placed at the heart of the Commission’s rhetorical case for doing so. Although other routes to WTO compliance were available (see Gibb, 2000: 469), Article XXIV of the GATT and its requirement for reciprocity in free trade agreements (FTAs) was placed front and centre in the Commission’s argument for Lomé reform. In its negotiating mandate for the Cotonou Agreement, the Commission stated: In the long run, the … proliferation of economic cooperation agreements compatible with the WTO, and in particular GATT article XXIV on free-trade areas, would ultimately mean that the EU’s future trade arrangements were perfectly in line with WTO provisions and require no exceptions. (European Commission, 1997: 25)
The Commission’s commitment to the use of Article XXIV as the principal legal justification for the EPAs was once again asserted in its proposed EPA negotiating mandate in 2002. This document stated that the ‘Liberalisation of trade in goods must … be undertaken, in particular, in conformity with the provisions of Article XXIV of the GATT 1994’ (European Commission, 2002a: 6).
In other words, the implications of the GATT ruling and advent of the DSU for the future of Lomé were ambiguous — further waivers appeared a viable alternative to reciprocity. However, there was enough congruence between the trajectory of the WTO and the EU’s desire to reform its relations with developing countries to allow the construction of a rhetorical strategy that rendered these reforms not only desirable, but necessary. The introduction of the DSU and the challenges to the banana regime (and, by extension, the entire Lomé Convention) allowed the EU to construct a case for reform based on this external institutional imperative. Meanwhile, reconstructing the EU–ACP relationship in compliance with Article XXIV provided a basis for the introduction of reciprocity, which would make the continuation of existing ACP preferences conditional upon the introduction of the EU’s desired trade reforms. At this stage in the EPA process, then, the path-dependent development of the international trade regime lent itself well — although not unambiguously — to strategic appeals from EU policymakers in their pursuit of an independent set of policy aims, namely, the recasting of the Lomé regime on a reciprocal basis.
From the Cotonou Agreement to the EPAs
The Cotonou Agreement eventually led to the formula of replacing Lomé with separate EPAs based on six (later seven) regional configurations. In theory, the decision to make Article XXIV the principal legal basis for the new EU–ACP trade regime did not require a region-based solution — agreements based on uniform or differentiated reciprocity had just as much chance of satisfying this requirement (Heron, 2014: 17). These alternatives were apparently ruled out on the grounds of practicality given the heterogeneity and complexity of the ACP group, which, by this point, numbered more than 70 countries (Siles-Brügge, 2014: 142). What is also clear is that this decision coincided with a growing enthusiasm among EU policymakers for the external promotion of regionalism, which rested on the belief that the EU’s own unique experience meant that it had a comparative advantage in offering this type of development assistance. 9 In this respect, the EU claimed that South–South regionalism would foster integration into the global economy, produce economies of scale, stimulate investment and lock in market-oriented policy reforms (European Commission, 1995, 2002b). In addition to their preference for fostering regional integration in the EPAs, in their response to the 1996 Green Paper, policymakers from EU member states had expressed a clear desire that special and differential treatment (SDT) for the poorest ACP countries be incorporated into the post-Lomé trade regime (Posthumus, 1998). However, as the negotiations got under way, it soon became clear that the EU vision for region-based EPAs that included SDT would be difficult to square with embedded features of the WTO rules upon which the rhetorical case for the EPAs was based.
Despite the fact that the expiry of the WTO waiver on 31 December 2007 came and went without a single comprehensive agreement having been signed, the conclusion of the CARIFORUM EPA the following year at least provided grounds for optimism that other ACP regions would eventually fall into line. In this case, CARIFORUM negotiators were apparently persuaded by the EU’s argument that — in the absence of the protection afforded by the waiver — a reciprocal agreement was necessary in order to make preferences WTO-compatible (Heron, 2014: 15). There is also considerable evidence to suggest a ‘convergence of thinking’ (Bishop et al., 2013: 104) between Caribbean negotiators and EU officials in relation to the development benefits of trade liberalisation and regulatory harmonisation (Heron, 2011; Nyaga Munyi, 2015). The Caribbean group’s relative homogeneity and well-functioning regional institutional architecture also eased the negotiating process. 10 Although this provides part of the answer as to why CARIFORUM was willing to sign a comprehensive agreement, we argue that such region-specific variables cannot account for the unwillingness of other ACP groups to follow suit. Rather, it is the case that, over time, the political dynamics and institutional trajectory of the WTO system increasingly served to undercut the EU’s strategic appeals to this as an institutional constraint.
The key point to note here relates to the legal ambiguity of Article XXIV (as highlighted by South Centre, 2008; Trommer, 2013), as well as its appropriateness as a legal basis on which to develop FTAs that incorporated the EU’s commitment to SDT (Heron, 2014: 15–16). Article XXIV gives no clear indication about how principles of SDT enshrined elsewhere in the GATT can be incorporated into an FTA (Heron, 2014: 12). This meant that the EPAs lacked a clear organising principle around which region-wide agreements could be constructed. Furthermore, because of legal ambiguity surrounding SDT itself, the only basis on which the EU could offer differential treatment under WTO rules was if this applied to LDCs only (see Heron, 2013: 120). The principle of ‘differentiation’ was enshrined in the Cotonou Agreement without clear indication of how this would be achieved in compliance with WTO rules. This principle was later implemented through the separate Everything but Arms (EBA) agreement — which granted LDCs duty- and quota-free access to the EU market on a unilateral basis regardless of whether they chose to sign an EPA. As has been well documented, EBA served to expose the limited and uneven nature of the EU’s material leverage in the EPA negotiations, ensuring that there would be zero costs in terms of market access for the 39 LDCs within the ACP group if they refused to sign an EPA (see Stevens, 2006).
While this contradiction blunted the material leverage associated with the negotiations, it stemmed from a deeper disconnect between the EU’s normative vision for the post-Lomé trade arrangement and the legal case for the EPAs. Specifically, the legal norms that the EU placed at the heart of its EPA vision were a good deal more opaque than asserted in its rhetorical strategy. Not only this, but the idiosyncrasies of these rules — particularly the fact that they lacked any organising principle around which to enshrine SDT in an interregional FTA — actually made the pursuit of reciprocity in relation to highly heterogeneous ACP regions more difficult.
Furthermore, to the extent to which the separate provisions offered to the LDCs through EBA appeared to contradict the EU’s claims that trade reforms were designed to support economic integration processes in ACP regions, this became a key focus of ACP and civil society contestation of the EPAs. As one ACP stakeholder put it: ‘The intention [to support regional integration] is there, but how that is to be accomplished seems to be at odds given a preoccupation with trying to satisfy WTO compatibility’ (cited in Weller, 2008: 7). The South Centre — a Geneva-based intergovernmental organisation — was particularly influential in highlighting the tensions between the EU’s claim that the EPAs would support regional integration and the perverse incentives created by the way in which SDT had been enshrined in the Cotonou Agreement: The presence of both LDC and non-LDC countries within EPA negotiating groups is … likely to produce difficulties for regional integration initiatives. Under the EBA arrangement, LDCs already have duty-free access to the European Market … and therefore have little incentive to sign a further free trade agreement. … Splitting the regional groups between the non-LDC countries that enter an EPA with the EU and those LDCs that maintain their trade barriers will have serious consequences. (South Centre, 2007a: 18–19)
In summarising civil society opposition to the EPAs in a briefing note for UK parliamentarians, Ian Townsend highlighted the role that WTO rules had played in creating these problems. He stated: ‘Some consider the WTO rules on regional trade agreements (RTAs) to be ill-defined at best, or at worst harmful to development focused RTAs between the developed North and the developing South’ (Townsend, 2009: 16). The key summative point here is that discrepancies between the EU’s vision for region-based and differentiated EPAs and the historically accumulated features of the WTO rules on which the rationale for these agreements was ostensibly based created a series of tensions that opponents of the EPAs were able to highlight and mobilise by recourse to their own rhetorical action.
‘Global Europe’ and the entwinement of the EU’s commercial and development agendas
As we have already described, problems with the Commission’s attempts to reconcile WTO rules with its desire for freer trade and closer (regional) integration with the ACP countries had been evident almost from the start of the EPA negotiations. We now turn, however, to the point at which the path-dependent trajectory of the WTO diverged most clearly from the policy preferences of European officials, and generated the most controversy and transnational opposition to the EPAs. That is, the Commission’s decision to step up its insistence on the inclusion of trade in services and the Singapore issues in the EPAs from the mid-2000s, at precisely the same time as the latter had been expelled from the Doha Development Round.
We can recall from our earlier discussion that the EU had placed Article XXIV of the GATT at the centre of its legal justification for replacing Lomé with a series of reciprocal FTAs. While this Article necessitates only the reciprocal liberalisation of trade in goods, the Cotonou Agreement suggested that the EPAs could include cooperation on a range of other issues, including trade in services and the Singapore issues — government procurement, trade facilitation, investment and competition. The Commission’s proposed negotiating mandate for the EPAs went a stage further, suggesting that ‘co-operation in [services and regulatory issues] should be as comprehensive and extensive as possible’, and arguing that these were ‘a key determinant of the competitiveness of the ACP’ (European Commission, 2002a: 4–5). Given that the Singapore issues had been discussed at successive WTO Ministerials in the late 1990s and 2000s (Ferguson, 2008: 20), their inclusion in the Cotonou Agreement seemed very much in keeping with the direction of travel of multilateral negotiations at the time.
However, following opposition from most developing countries and a lukewarm reception from US negotiators, multilateral talks on the Singapore issues reached a stalemate at the Cancún Ministerial in 2003 (Ferguson, 2008: 20). The three most controversial Singapore issues (government procurement, investment and competition policy) were subsequently dropped from the Doha Round. Moreover, the collapse of the Cancún Ministerial reflected the wider path-dependent institutional dynamics of the multilateral negotiating process. Specifically, the majority of developing countries had approached the Seattle and Cancún Ministerials feeling that their developed-country counterparts had failed to deliver on promises made during the previous Uruguay Round and were now seeking negotiations on the Singapore issues without first addressing these grievances (Heron, 2014: 19). Although these tensions did not make the collapse of Cancún and the abandonment of the Singapore agenda inevitable, the outcome was considerably more politically contingent than allowed for in the EU’s discursive strategy for the EPAs.
The EU’s response to Cancún rested on a discourse of ‘global competitiveness’ (Hay, 2007; Rosamond, 2002; Tsoukalis, 1997) as a spur for both internal reform and a more aggressive external trade policy. This strategy centred internally on the Lisbon Agenda and externally on the ‘Global Europe’ document released in 2006 (European Commission, 2006c). ‘Global Europe’ reaffirmed the EU’s commitment to the pursuit of agreement on the Singapore issues, now through bilateral FTAs. The document focused on emerging markets in Asia, Latin America and the Middle East. Discussion of the ACP countries was limited primarily to a mention of the ‘development needs of our partners’ (concerning the preference-eroding effects of FTAs with emerging markets) (European Commission, 2006c: 12). In this way, the Commission sought to draw a line between its ‘main trade interests’ (European Commission, 2006c: 10–11) and the separate development-oriented negotiations concerning the ACP.
Despite assertions that the EPAs were separate from EU commercial interests, the aftermath of the Cancún Ministerial coincided with a growing emphasis on the Singapore issues and trade in services in the EPA negotiations (Heron and Siles-Brügge, 2012). During this phase of the negotiations, the European Commission insisted that these issues were central to the ‘development dimension’ of the EPAs (European Commission, 2006b: 5). Mirroring the internal discourse surrounding the Lisbon Agenda, the Commission made the argument that only if market access was accompanied with clear and stable rules on issues such as investment and competition policy could the ACP countries create the competitive environment necessary for the promotion of development (European Commission, 2006a; Mandelson, 2005a, 2005b, 2007a, 2007b).
While EU Trade Commissioner Peter Mandelson (2008) insisted publicly that he would not ‘crowbar these issues into final deals’, the Commission appeared at the same time to place considerable pressure on ACP countries for their inclusion. 11 This included hints that the provision of additional development finance and even market access may be conditional upon ACP countries’ willingness to complete ‘full’ EPAs (see European Commission, 2006a: 9; Mandelson, 2007a: 1). In sum, after 2003, the Commission worked hard to realise its aim that the EPAs should cover not only trade in goods, but also trade in services and a series of regulatory issues, and to make the argument that it was precisely agreement on these issues that would form the development component of the EPAs. This represented a clear break with the trajectory of negotiations in the WTO.
Contesting the EPAs: Transnational advocacy coalitions
The effect of the divergence between EU preferences and the trajectory of developments in the WTO was to create space and opportunity for a barrage of opposition to the EPAs from ACP governments, NGOs and activists. This criticism gathered pace rapidly from the mid-2000s onwards. This is, in part, attributable to a decision by the ‘Trade Justice’ movement to divert attention and resources away from the faltering Doha Round and towards regional and bilateral negotiations. 12 However, it is no coincidence that this increasingly vocal campaign against the EPAs corresponded with the EU’s growing insistence on the conclusion of comprehensive agreements at a time when this comprehensive agenda had been roundly rejected in the WTO. Most importantly, it is clear that these campaigns focused their energies on highlighting the tensions that emerged from the divergence between EU policy preferences and the WTO rules on which the discursive case for the EPAs was based.
By this point, Commission officials could no longer hide behind the pretext of ‘WTO compatibility’ and had come to rely more and more on making a normative case for the desirability of the EPAs as opposed to emphasising their legal necessity. For example, following the rejection of the Singapore issues in the Doha Round, European Commission Chief EPA negotiator Karl Falkenberg reaffirmed the case for their inclusion in the EPAs on normative grounds: ‘It can come as no surprise that I fundamentally disagree with subordinating EPA progress to progress in the WTO. Why? Fundamentally because investment, government procurement and trade facilitation are all essential subjects for development’ (cited in Christian Aid et al., 2006: 4).
Ironically, this normative case for the EPAs was itself undermined by the EU’s continued reference to the imperatives created by WTO rules. In particular, the EU’s negotiators continued to insist that the expiry of the WTO waiver at the end of 2007 constituted the immovable deadline for the conclusion of the negotiations (see Drieghe, 2008). 13 This, coupled with negotiators’ strong preference for the inclusion of services and the Singapore issues in the EPAs, provoked claims that the EU was placing undue pressure on the ACP countries to make hurried deals that went beyond the requirements of multilateral rules.
Civil society organisations made this a key focus of their contestation of the EU’s strategy for the EPAs. For example, ActionAid stated: In seeking agreement on investment, government procurement and competition policy under the EPAs after developing countries collectively rejected such agreements at the WTO, the European Commission is pursuing a self-interested market-access agenda without due consideration to the development needs of African countries. (ActionAid, 2004: 23)
Oxfam (2007: 11), as well as a range of other civil society actors, likewise stressed that ‘neither the WTO regime nor the Cotonou Agreement requires negotiation on competition policy in EPAs’ (see also Oxfam, 2006, 2007; Traidcraft et al., 2007). The key point here was not that the introduction of, for example, robust competition rules would necessarily have a negative impact on ACP economies. Rather, the transnational coalition of anti-EPA campaigners objected strongly to the manner in which the EU was attempting to impose these rules on ACP countries immediately after those same countries (as part of a broader developing-country coalition) had rejected their inclusion in the WTO. Furthermore, these campaigners highlighted the EU’s seeming hypocrisy in using WTO compatibility as a pretext for making this imposition.
A number of ACP governments also seized on the apparent discrepancy between appeals to WTO rules and the EU’s comprehensive negotiating agenda. South African Minister for Trade and Industry Rob Davies was particularly vocal in this respect: In the SADC [Southern African Development Community] region, the major problems have in fact arisen from the EU’s ambition to move beyond WTO compatible free trade agreements covering trade in goods, to agreements also embracing trade in services and new generation issues, involving serious commitments in areas such as investment, government procurement, competition policy and the like. … [These issues] are linked to global strategies to promote offensive interests of European companies across the world. (Davies, 2008)
Likewise, the Zambian Trade Minister, Dipak Patel, expressed concern about the ‘backdoor approach’ to the introduction of the Singapore issues and asked: ‘Where is the convergence between the WTO level and the EU approach in the EPAs?’ (cited in Christian Aid et al., 2006: 4).
ACP countries were also able to seize upon ambiguities within Article XXIV of the GATT itself in order to contest the EU’s claims about the extent of reciprocal liberalisation that was required to satisfy this rule. The West African negotiating configuration made a particularly concerted effort to challenge the EU’s interpretations of Article XXIV’s requirement that parties to an FTA liberalise ‘substantially all trade’ within a ‘reasonable length of time’ (Diouf, 2009; Trommer, 2013). The Namibian delegation in Brussels also made extensive efforts to lobby the European Parliament to encourage European negotiators to offer the maximum flexibility allowed by Article XXIV. 14 These efforts to challenge the EU’s interpretation of the ambiguous rules that underpinned its case for reciprocal liberalisation were supported by legal analysis produced by various intergovernmental and civil society organisations (see, e.g., ActionAid, 2005; Bilal and Rampa, 2006; South Centre, 2007b). These legal arguments were made all the more powerful because the EU had itself placed so much emphasis on the centrality of WTO compatibility throughout the negotiating process.
In this way, transnational advocacy coalitions were able to use their own recourse to rhetorical action to challenge the EU’s case for comprehensive EPAs. The EU’s initial reliance on the convergence between its policy preferences and WTO imperatives in order to make the discursive case for the EPAs meant that once the trajectory of WTO developments diverged from the EU’s own agenda, policymakers were, in effect, hoisted with their own petard.
The contestation of the EPAs by the range of actors discussed earlier had a clear impact on the course and outcome of the negotiations (see also Del Felice, 2012; Hurt et al., 2013; Trommer, 2013). The EU was forced to row back on its insistence on the necessity of reaching comprehensive EPAs before the expiry of the 2007 WTO waiver and to instead offer ‘interim’ goods-only EPAs. While the EU had intended that these agreements should provide a stepping stone to more comprehensive deals (European Commission, 2007), in the face of continued and concerted opposition, the Commission later softened its insistence that any EPA should include binding commitments on services and the Singapore issues. As Trade Commissioner and successor to Peter Mandelson, Catherine Ashton addressed the opposition raised by civil society groups directly in a letter outlining the Commission’s new position on the EPAs. She reaffirmed the Commission’s belief that the inclusion of services, investment and public procurement in the EPAs would support the ACP countries’ development efforts, but assured critics that there would be ‘no question of forcing’ the inclusion of these issues (Ashton, 2009).
By the time that EPAs were initialled by Southern, West and East Africa in 2014, negotiators from these regions, with the support of civil society, had extracted significant concessions from the EU using the arguments outlined earlier. In the West African case in particular, the challenges to the EU’s interpretation of Article XXIV were successful in persuading the EU to accept a market access offer covering 75% of imports from Europe as opposed to the 80% initially demanded by the EU’s negotiators (Bilal and Ramdoo, 2014). Meanwhile, Southern Africa obtained additional concessions on a series of controversial technical clauses, as well as on market access provisions for South Africa (Murray-Evans, 2015). Most significantly, each of these regions has successfully rejected the EU’s case for a comprehensive agreement with the inclusion of binding clauses on the Singapore issues, and has instead agreed a goods-only EPA.
Conclusions
In this article, we have examined a specific case of the EU’s engagement with the Global South. In so doing, we have encountered the familiar themes of ‘market power’ and the export of regionalism. Our approach differs from much of the extant literature insofar as we have concentrated on a case that, on the surface, appears to offer a perfect illustration of the actuality of the EU’s market power but, on closer inspection, reveals almost the opposite. As we have shown, despite the acute dependence of the ACP on the EU for market access and trade, it is only in one case — CARIFORUM — that negotiations have produced an outcome resembling the original prospectus. Elsewhere, the EPA negotiations have concluded with goods-only agreements at the regional or subregional level, while a number of countries have refused to sign an EPA altogether. Further, we have shone light on the rather weak correlation that exists between the outcome of the negotiations and the market dependence of individual ACP regions and countries. This renders straightforward materialist explanations of the EPAs — and, by implication, materialist accounts of EU market power more generally — inadequate. In the case of the EPAs, alternative, non-materialist accounts highlight the resistance and discursive contestation of the EU’s agenda by ACP countries and transnational advocacy coalitions. We have suggested that while such explanations highlight an important dynamic of the EPA negotiations, they fail to consider fully why the EU has been unable to translate its preponderance of market power and considerable diplomatic resources into a more favourable outcome of the negotiations.
To address this puzzle, we developed a theoretical model combining aspects of Parsons’ institutional and ideational logics of explanation. Where existing constructivist theory seeks to explain when and how ideas bring about institutional change, we turned this puzzle on its head to investigate the invocation of path-dependent institutional rules or norms as a strategic discursive tool designed to bring about a particular policy, reform or negotiating outcome. To do this, we built on the existing contributions of Hay and Rosamond (2002) on the strategic invocation of economic constraints, on the one hand, and Frank Schimmelfennig’s (2001) work on rhetorical action, on the other. Our contribution to this existing theoretical literature is the insight that political actors may use strategic appeals to shared norms, rules or other institutions in order to lend legitimacy or a sense of necessity to a proposed course of action. Moreover, we suggested that actors might exercise power by seizing on the ambiguity of existing institutional structures in order to portray them as congruent with their particular preferences and policy aims. While such strategies can be effective, the case of the EPAs demonstrates that they may also become hostage to path dependencies of the institution to which appeal is being made. This may actively undermine the discursive case, particularly where the claims to institutional imperatives are revealed as opportunistic or contradictory and space is opened for rival claims to the same institutional rule or norm. The significance of this is that the success of strategic discursive appeals to institutional constraints may be significantly more contingent upon path dependencies than has previously been acknowledged.
This theoretical approach has helped us to explain the limitations of the EU’s market power in the case of the EPA negotiations. Specifically, while we do not discount the importance of the material leverage afforded by the EU’s large internal market, we have shown that a focus on ideas and discourse helps to clarify what we might call the ‘grey area’ between asymmetrical power relations and bargaining outcomes. In the case of the EPAs, the EU clearly felt a strong imperative not only to base its drive for ACP trade reform on the material leverage associated with existing ACP preference dependence, but also to persuade the ACP countries of the legitimacy and necessity of this action by appealing to multilateral constraints. While this discursive case was initially strengthened by a strong convergence between the EU’s preference for freer trade and closer economic harmonisation and the apparent direction of travel at the WTO, it soon unravelled following the divergence of these two dynamics. The fact that much of the ACP and civil society contestation of the EPAs was targeted at the appeals to WTO rules made by the EU suggests that this aspect of the bargaining process was more than trivial. Ultimately, the EU failed to persuade reluctant ACP countries of the legal necessity of comprehensive EPAs. Furthermore, the EU’s continued appeals to WTO rules actively undermined its normative case for the EPAs because it appeared that the EU was making spurious claims about WTO compatibility while pursuing its own agenda, which was much more ambitious than these rules required. This provided ACP states with both the space to question the EU’s claims and the tools to justify their decision to reject comprehensive EPAs. What all of this suggests is that explanations of the outcomes of the EU’s external action would benefit from paying more attention to the political and discursive contingency of its market power. Specifically, the EU’s power — even where there is a significant asymmetry in market size vis-a-vis an external partner — rests on more than simple material leverage and can be shaped significantly by the discursive arguments with which the EU promotes its favoured negotiating outcomes.
Footnotes
Acknowledgements
An early sketch of the argument developed in this article was first presented at the European Union Studies Association (EUSA) biannual conference, Baltimore, USA, 9–11 May 2013, and subsequently published in a special issue of Contemporary Politics (Heron, 2014). The article is a revised, updated and substantially expanded version of a paper first presented at the Sheffield Political Economy Research Institute (SPERI) annual conference, Sheffield, UK, 1–3 July 2013. The authors would like to thank fellow panellists and audience members who provided valuable feedback, criticism and comment on the paper. Any remaining errors or omissions are the sole responsibility of the authors.
Funding
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
