Docstoc

European Union trade politics and

Document Sample
European Union trade politics and Powered By Docstoc
					European Union trade politics
    and a social clause

A protectionist wolf in social clothing?

                                WORK IN PROGRESS !!!

Utrecht School of Economics - Tjalling C. Koopmans Institute
External Seminar Series - 31 January 2007

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Introduction
Three confessions

European Union trade politics
- development (Everything But Arms)
- social clause (Core Labour Standards)

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
State of the art
Literature: economic (theoretical) + focus on
US policy

 Empirical testing of protectionist
assumption?
 Policy of European Union and member
states?
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
EU position on a social clause?

Process-tracing of evolving EU policy and
discourse

              - Multilateral (GATT/WTO)
              - Bilateral agreements (Lomé etc)
              - Unilateral (GSP)

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
   (1) 1970s                        NON-ISSUE (e.g. Tokyo Round GATT; Lomé I; GSP system)

   (2) end 1970s                    SUDDEN RISE of the European debate
                                        -EP, ESC and the Commission (1978 proposals) in favour of CLS in GSP and in Lomé II
                                        -Member States / Council of Ministers: reluctant / silent

   (3) 1980s                        DISAPPEARS from the European trade agenda
                                        -EP still in favour, but the Commission is much more reluctant and the Council remains silent
                                        -E.g. the EC position in the GATT Uruguay Round and subsequent GSP reforms

   (4) 1990s                        1993-94: the social clause suddenly becomes a HOT TOPIC in EU (international) politics
                                        -First: some member states (esp. France and Belgium) and the European Parliament
                                        -Then also the Commission (Sir Leon Brittan)
                                        -BUT: huge divergences within the Council (esp. UK and Germany)
                                         social clause in GSP, but very limited; different positions in WTO Singapore conference

   (5) 1997-2001                    Towards a EU COMPROMISE on labour standards in the WTO
                                         common EU position in WTO (Seattle 1999): ILO-WTO forum, no protectionist use, incentives
                                         more comprehensive social clause in GSP (1998; 2001): incentive-based, conformity with ILO


   (6) 2001+                        A NON-ISSUE again
                                         Labour standards in GSP? symbolic after all
                                         The EU in the WTO/Doha Development Round? CLS should be dealt with in the ILO
(cf Orbie, Vos & Taverniers 2005)        EU bilateral free trade agreements? vagueness prevails / merely mentioned

                        European Union trade politics and a social clause: a protectionist wolf in social clothing?
                        J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Explanations
- for evolving EU/EC position?
- for variation in positions of MS and
institutions?

 Competences?
 Ideology?
 Economic interests!
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Hypothesis
Social clause = disguised protectionism

 how to measure? Unemployment / trade
union power
 how relate to other explanations?

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
      Arithm. average EU-15 OECD 1966-2005
 Striking link
    12,0



between European
    10,0

unemployment figures
and the EU debate on
     8,0



a social clause
     6,0




     4,0




     2,0
                             (1)                                                (2)                                                   (3)                                              (4)        (5)       (6)
                          NON-ISSUE                                         SUDDEN RISE                                           DISAPPEARS                                        HOT TOPIC COMPROMISE NON-ISSUE
     0,0
           1966
                  1967
                         1968
                                1969
                                       1970
                                              1971
                                                     1972
                                                            1973
                                                                   1974
                                                                          1975
                                                                                 1976
                                                                                        1977
                                                                                               1978
                                                                                                      1979
                                                                                                             1980
                                                                                                                    1981
                                                                                                                           1982
                                                                                                                                  1983
                                                                                                                                         1984
                                                                                                                                                1985
                                                                                                                                                       1986
                                                                                                                                                              1987
                                                                                                                                                                     1988
                                                                                                                                                                            1989
                                                                                                                                                                                   1990
                                                                                                                                                                                          1991
                                                                                                                                                                                                 1992
                                                                                                                                                                                                        1993
                                                                                                                                                                                                               1994
                                                                                                                                                                                                                      1995
                                                                                                                                                                                                                             1996
                                                                                                                                                                                                                                    1997
                                                                                                                                                                                                                                           1998
                                                                                                                                                                                                                                                  1999
                                                                                                                                                                                                                                                         2000
                                                                                                                                                                                                                                                                2001
                                                                                                                                                                                                                                                                       2002
                                                                                                                                                                                                                                                                              2003
                                                                                                                                                                                                                                                                                     2004
                                                                                                                                                                                                                                                                                            2005
                   European Union trade politics and a social clause: a protectionist wolf in social clothing?
                   J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
       Arithm. average EU-15 Eurostat 1983-2005
12,0




10,0




 8,0




 6,0




 4,0




 2,0




 0,0
       1983 1984   1985 1986 1987   1988 1989   1990 1991   1992 1993   1994 1995 1996   1997 1998   1999 2000   2001 2002 2003   2004 2005



             European Union trade politics and a social clause: a protectionist wolf in social clothing?
             J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
                     Individual member states: same pattern
25,0
                                                                                                                                                                                                                                                                                               Belgium

                                                                                                                                                                                                                                                                                               France

                                                                                                                                                                                                                                                                                               Germany
20,0
                                                                                                                                                                                                                                                                                               Italy

                                                                                                                                                                                                                                                                                               Luxemburg

                                                                                                                                                                                                                                                                                               Netherlands
15,0
                                                                                                                                                                                                                                                                                               Denemarken

                                                                                                                                                                                                                                                                                               Ierland

                                                                                                                                                                                                                                                                                               United
10,0                                                                                                                                                                                                                                                                                           Kingdom
                                                                                                                                                                                                                                                                                               Greece

                                                                                                                                                                                                                                                                                               Portugal

                                                                                                                                                                                                                                                                                               Spain
 5,0
                                                                                                                                                                                                                                                                                               Austria

                                                                                                                                                                                                                                                                                               Finland

                                                                                                                                                                                                                                                                                               Sweden
 0,0
                                                                                                                                                                                                                                                                                               Mean (15)
       1966
              1967
                     1968
                            1969
                                   1970
                                          1971
                                                 1972
                                                        1973
                                                               1974
                                                                      1975
                                                                             1976
                                                                                    1977
                                                                                           1978
                                                                                                  1979
                                                                                                         1980
                                                                                                                1981
                                                                                                                       1982
                                                                                                                              1983
                                                                                                                                     1984
                                                                                                                                            1985
                                                                                                                                                   1986
                                                                                                                                                          1987
                                                                                                                                                                 1988
                                                                                                                                                                        1989
                                                                                                                                                                               1990
                                                                                                                                                                                      1991
                                                                                                                                                                                             1992
                                                                                                                                                                                                    1993
                                                                                                                                                                                                           1994
                                                                                                                                                                                                                  1995
                                                                                                                                                                                                                         1996
                                                                                                                                                                                                                                1997
                                                                                                                                                                                                                                       1998
                                                                                                                                                                                                                                              1999
                                                                                                                                                                                                                                                     2000
                                                                                                                                                                                                                                                            2001
                                                                                                                                                                                                                                                                   2002
                                                                                                                                                                                                                                                                          2003
                                                                                                                                                                                                                                                                                 2004
                                                                                                                                                                                                                                                                                        2005
                                    European Union trade politics and a social clause: a protectionist wolf in social clothing?
                                    J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
       Weighted average (voting weight in Council):
12,0
       same pattern
                                                                                                       Arith mean
10,0                                                                                                   OESO wlh

                                                                                                       weigh. mean
                                                                                                       EUR6

 8,0                                                                                                   weigh. mean
                                                                                                       eur9

                                                                                                       weigh. mean
                                                                                                       eur10
 6,0
                                                                                                       weigh. mean
                                                                                                       eur12

                                                                                                       weigh. mean
 4,0                                                                                                   eur15




 2,0




 0,0
    66
    67
    68
    69
    70
    71
    72
    73
    74
    75
    76
    77
    78
    79
    80
    81
    82
    83
    84
    85
    86
    87
    88
    89
    90
    91
    92
    93
    94
    95
    96
    97
    98
    99
    00
    01
    02
    03
    04
    05
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 19
 20
 20
 20
 20
 20
 20
         European Union trade politics and a social clause: a protectionist wolf in social clothing?
         J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Striking link between European
unemployment figures and the EU debate
on a social clause…

(1) non-issue 1970s
(2) sudden rise end 1970s
(3) disappearance 1980s
(4) hot topic 1993-94
(5) compromise end 1990s
(6) non-issue 2000+

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
BUT high/rising unemployment

- does not necessarily lead to a common
EU/EC position on integrating CLS in trade
policies

- does not explain variations within the EU
Member States and Institutions


European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Variations within the EU Member States
and Institutions

(a) 1993-97: divergences between MS
(Fr/B vs Ge/UK)  ideological dimension

(b) 1970s: divergences between EC
institutions (EC/EP/ESC vs Council) 
competence dimension
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
(a) Divergences between MS from 1993
    until 1997/98

         - France and Belgium: in favour
         - Germany and UK: opposition



European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
       Unemployment (OECD) 1990-2000:
       Evolution Fr/B/Ge/UK and EU average
14,0




12,0



                                                                                                            Belgium
10,0


                                                                                                            France
 8,0


                                                                                                            Germany

 6,0

                                                                                                            UK

 4,0
                                                                                                            EU average


 2,0




 0,0
       1990       1991     1992      1993     1994     1995     1996     1997     1998     1999     2000




              European Union trade politics and a social clause: a protectionist wolf in social clothing?
              J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Unemployment (OECD) 1990-2000:
Factor analysis (PCA) Fr/B/Ge/UK
                                  Component Matrix(a)
                                              Component
                                               1         2
                         1 Belgium           0,845     0,447
                         2 France            0,906     0,366
                         3 Germany           0,461     0,841
                         4 Italy             0,158     0,927
                         5 Luxemburg         0,879     0,154
                         6 Netherlands       0,961    -0,222
                         7 Denemarken        0,737    -0,602
                         8 Ierland           0,936    -0,327
                         9 United Kingdom    0,861    -0,486
                         10 Greece          -0,904     0,320
                         11 Portugal         0,899     0,214
                         12 Spain            0,996    -0,068
                         13 Austria          0,287     0,830
                         14 Finland          0,936    -0,346
                         15 Sweden           0,932     0,273
                           Extraction Method: Principal Component Analysis.


  European Union trade politics and a social clause: a protectionist wolf in social clothing?
  J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Alternative explanation: trade union
power?

- Trade union power = trade union density?
- How to measure?
      - Gross density: political interpretation
      - Net density: international comparison
      - But: High correlations between gross
      and net
- Focus on Fr/B/Ge/UK
  European Union trade politics and a social clause: a protectionist wolf in social clothing?
  J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
     Net union density Fr/B/Ge/UK 1990-2003
     (Visser 2006)
60




50

                                                                                                                   Germany

40


                                                                                                                   France

30


                                                                                                                   UK
20



                                                                                                                   Belgium
10




0
1990   1991       1992    1993    1994    1995    1996    1997    1998    1999    2000    2001    2002      2003



              European Union trade politics and a social clause: a protectionist wolf in social clothing?
              J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
- Trade union density level is much lower in
       Fr than in UK and Ge
- No direct link between union density and a
       government’s position on a social
       clause
- Indirect influence through the participation
       of affiliated parties in government?
               >Ideological dimension

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
 Ideological dimension must be
considered to account for divergences
between member states – apart from
unemployment figures and union density

- cf. ‘Northern free traders’ vs ‘Southern Club Med’ in
EU trade policy
- cf Krueger 1996 on US: ideology – however difficult
to define – seems to play a more important role

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
(b) Divergences between EU
    institutions in late 1970s (and until
    today)

         - EC/EP/ESC: in favour
         - Council: reluctant


European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
The issue of labour standards in trade
(i.e. social clause) touches upon
sensitive competence issues between
Community institutions and Member
States

- EC role in coordination/ratification/implementation
labour standards (ILO affairs)?
- EC role in broader (redistributive) trade-related
isssues (development)?
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Preliminary conclusions:
institutions, interests and ideas
- Unemployment / economic interests:
necessary condition for triggering EU debate...

- ... but not sufficient: (a) ideological preferences
(between MS) and (b) competence issues (EC
vs MS) also play a role  how?

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
- because of institutional architecture EU
trade policy, viz. unanimity/consensus
requirement esp. in trade-related and
redistributive issues:

      ‘trigger’ of unemployment rise only leads to
firm/common position on a social clause when
there is a clear ideological consensus in the EU
      if not: EU sticks to ‘default position’,
biased towards free trade approaches (and ILO
instead of WTO involvement), cf ‘joint decision
trap’ (cf EU in Marrakesh 1993; Singapore 1996)
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
  Ideological consensus at EU level


                                                              - ‘Center of gravity’: cf. average
                                                              ideological position of Council
                                                              - ‘Standard deviation’: cf. extent
                                                              of ideological consensus in EU




                                                                 (from: Manow, Schäfer, Zorn 2004)

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
- Thus: ‘protectionist wolf’ is largely caged
in EU institutional structure (lock-in)

        In line with historical-institutionalist
research (cf. Hanson 1998) concluding that
‘Fortress Europe’ did not materialize; the EU is a
fairly liberal actor in trade

    Despite agriculture and ‘regulatory peaks’
(Young 2004 on EU ‘incidental Fortress’)

European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
- Suggests that debate on a social clause will
resurface with sudden increases in
unemployment

- Sheds light on difference with United
States, where position on a social clause is
more closely related to prevailing ideology in
Congress/Administration
(less institutional hurdles)
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
     Unemployment in US
12




10

                                                                                                     USA

8


                                                                                                     Mean
                                                                                                     EU 15
6




4




2




0
   66
   67
   68
   69
   70
   71
   72
   73
   74
   75
   76
   77
   78
   79
   80
   81
   82
   83
   84
   85
   86
   87
   88
   89
   90
   91
   92
   93
   94
   95
   96
   97
   98
   99
   00
   01
   02
   03
   04
   05
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
       European Union trade politics and a social clause: a protectionist wolf in social clothing?
       J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
Questions and further research

- quantifying intensity of EU position on
social clause
- quantifying interplay unemployment, union
density, and ideology
- comparisons with US trade policy and other
EU trade-related topics (e.g. environment)
- relevance for EU social policy in general
- ...
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University
                                  Contact details

                 Jan.Orbie@UGent.be (EU studies)
              Tineke.Boucke@UGent.be (trade unions)
               Dries.Verlet@UGent.be (methodology)

                          Ghent University (UGent)
                        Department of Political Science
                             Universiteitstraat 8
                               B – 9000 Gent
                                  Belgium
                             www.psw.ugent.be
European Union trade politics and a social clause: a protectionist wolf in social clothing?
J. Orbie, T. Boucké, D. Verlet – Dept. of Political Science, Ghent University