Abstract
This chapter identifies the most pressing challenges for the EU multilaterally oriented trade policy due to the changing global context for international trade and investment, caused by the shift of the US towards unilateralism and protectionism and by the re-orientation of China’s exceptionalism towards becoming a more influential actor. It explores and assesses how EU trade policy copes with the new polarities and finally formulates proposals for the way forward for the EU multilateral trade policy. It will be shown that the current challenges are more fundamental in character and may last longer than currently anticipated. It will also highlight that maintaining unity in the EU determination of trade policy is of pivotal importance for addressing the challenges, which however might become more difficult.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
Michael Hahn, ‘We’ll Always have Geneva: The Existential Crisis of the US-led Multilateral Trading System’ in Inge Govaere/Sascha Garben (eds) The Interface Between EU and International Law (Hart Publishing 2019) 269 at 270. For an empirical affirmation s. Todd Allee/Manfred Elsig/Andrew Lugg, ‘The Ties between WTO and Preferential Trade Agreements’ (2017) 20 JIEL 2, 333.
- 2.
S. most recently the G20 Osaka Leaders’ Declaration (28/29 June 2019): “We reaffirm our support for the necessary reform of the World Trade Organization (WTO) to improve its functions. We will work constructively with other WTO members, including in the lead up to the 12th WTO Ministerial Conference. We agree that action is necessary regarding the functioning of the dispute settlement system consistent with the rules as negotiated by WTO members. Furthermore, we recognize the complementary roles of bilateral and regional free trade agreements that are WTO-consistent. We will work to ensure a level playing field to foster an enabling business environment.”
- 3.
Cf. the Fourth Clause of the Atlantic Charter 1941: “they will endeavor … to further the enjoyment by all States, great or small, victor or vanquished, of access, on equal terms, to the trade and to the raw materials of the world” <https://www.unmultimedia.org/searchers/yearbook/page.jsp?volume=1946-47&page=2&searchType=advanced>.
- 4.
See USTR, 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States on the Trade Agreements Program (2018) <https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2018/2018-trade-policy-agenda-and-2017> pp. 22-28.
- 5.
G20 Leaders’ Declaration 2017 <https://www.consilium.europa.eu/media/23955/g20-hamburg-leaders_-communiqu%C3%A9.pdf> p. 10.
- 6.
The US withdrew from the Joint Comprehensive Plan of Action (JCPOA) adopted by the United Nations Security Council in Resolution 2231 (2015).
- 7.
Cf. his inaugural address: “Every decision on trade … will be made to benefit American workers and American families … Protection will lead to great prosperity and strength. … We will follow two simple rules: Buy American and Hire American”, <www.whitehouse.gov/inaugural-address>.
- 8.
Bernard Hoekman/Laura Puccio, EU Trade Policy: Challenges and Opportunities (RSCAS Policy Papers 2019/06, 2019) 1.
- 9.
Presidential Proclamation on Adjusting Imports of Steel into the US, clause 1. <https://www.whitehouse.gov/ presidential-actions/proclamation-adjusting-imports-steel-united-states-2/>.
- 10.
“Steel (aluminium) articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States”. (cf. Presidential Proclamation on Adjusting Imports of Steel into the US). For the requirements for recourse to the WTO national security exceptions see the last chapter in this volume. For a timeline and detailed references on the US trade wars see <https://www.piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide>.
- 11.
See the Section 232 Investigations report, p. 4: ‘Excessive steel imports have adversely impacted the steel industry. Numerous U.S. steel mill closures, a substantial decline in employment, lost domestic sales and market share, and marginal annual net income for U.S.-based steel companies illustrate the decline of the U.S. steel industry.’, <https://www.commerce.gov/sites/default/files/the_effect_of_imports_of_steel_on_the_national_security_-_with_redactions_-_20180111.pdf>.
- 12.
See Geraldo Vidigal, ‘WTO Adjudication and the Security Exception’ (2019) 46 Legal Issues of Economic Integration 203 at 218 f.
- 13.
Cf. Craig VanGrasstek, The Trade Policy of the US under the Trump Administration (EUI RSCAS Working Paper 2019/11, 2019), 17.
- 14.
- 15.
Craig VanGrasstek, supra note 13 at 18.
- 16.
However, the trade balance is more balanced if services are included.
- 17.
See the text of the Declaration on WTO Reform in footnote 2, which lacks a reference to the importance of rule-based trade and the defence against protectionism. The G20 Declaration of 2017 contained a statement against protectionism on page 3 <https://www.consilium.europa.eu/media/23955/g20-hamburg-leaders_-communiqu%C3%A9.pdf>.
- 18.
- 19.
Joint EU-U.S. Statement following President Juncker’s visit to the White House <http://europa.eu/rapid/press-release_STATEMENT-18-4687_en.htm> and <http://trade.ec.europa.eu/doclib/press/index.cfm?id=1898>.
- 20.
The negotiating mandates for the Commission were not adopted by the Council until April 2019, <https://www.consilium.europa.eu/media/39180/st06052-en19.pdf> and <https://www.consilium.europa.eu/media/39178/st06053-en19.pdf>. For the guidelines for the negotiations see <https://www.consilium.europa.eu/media/39181/st06052-ad01-en19.pdf> and <https://www.consilium.europa.eu/media/39179/st06053-ad01-en19.pdf>.
- 21.
- 22.
S. Michael Hahn supra note 1 at 280.
- 23.
Cf. the US Communication “China’s Trade Disruptive Economic Model” WT/GC/W/745; USTR (ed) 2018 Report to Congress On China’s WTO Compliance (2019) <https://ustr.gov/sites/default/files/2018-USTR-Report-to-Congress-on-China%27s-WTO-Compliance.pdf>.
- 24.
For EU approaches to resolving transfer of technology concerns under existing WTO agreements by giving a novel reading to WTO disciplines, see its request for consultations WT/DS549/1/Rev.1.
- 25.
Cf. the Joint Statement on Trilateral Meeting of the Trade Ministers of the United States, Japan, and the European Union (September 2018) <https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/joint-statement-trilateral>. On the role of subsidies in the build-up of overcapacity, see the Communication of the USA, EU, Japan and others of 12.4.2018 Subsidies and Overcapacity: The Role of below-market financing, G/SCM/W/575.
- 26.
WT/DS542 – China – Certain Measures Concerning the Protection of Intellectual Property Rights.
- 27.
For the continuation of talks between US and China <https://www.vox.com/world/2019/6/29/19870814/us-china-trade-negotiations-restart-donald-trump-tariff-huawei-concessions>. For the national security issues posed by measures against Huawei see Tania Voon and Andrew Mitchell, ‘Australia’s Huawei Ban Raises Difficult Questions for the WTO’, E. ASIA FORUM, Apr. 22, 2019, https://bit.ly/2YfJG4d.
- 28.
See Craig VanGrasstek, supra note 13 at 2 et seq, 12 et seq. The establishment of the US Interagency Trade Enforcement Center by Obama was already marked by the tightening of trade policy towards China, cf. Li ** of Chinese foreign policy. For criticism s. William Callahan, supra note 34 at 42 et seq.
- 37.
Yuan-kang Wang, Harmony and War: Confucian Culture and Chinese Power Politics (Columbia University Press 2011); idem, ‘The Myth of Chinese Exceptionsalism: A Historical Perspective on China’s Rise’, in Vinod K. Aggarwal/Sarah Newland (eds.) Responding to China’s Rise (Springer 2015) pp. 51-74.
- 38.
William Callahan, supra note 34 at 34.
- 39.
Max Zenglein/Anna Holzmann, EVOLVING MADE IN CHINA 2025: China’s industrial policy in the quest for global tech leadership (Merics Papers on China No 8, July 2019); Anton Malkin, Made in China 2025 as a Challenge in Global Trade Governance (CIGI Papers No. 183, August 2018); see also <http://english.gov.cn/policies/latest_releases/2015/05/19/content_281475110703534.htm>.
- 40.
Cf. Peter Frankopan, The New Silk Roads (Bloomsbury 2019) p. 62 ff.
- 41.
Bruno Maçães, Belt and Road: A Chinese World Order (C. Hurst 2019).
- 42.
Cf. in more detail WTO, World Trade Report 2017 (2017) 14; Craig VanGrasstek, Trade and American Leadership (Cambridge University Press 2019) 321 et seq.
- 43.
Hanns Günther Hilpert, China’s Trade Policy (SWP Research Paper 2014) pp. 12, 17, 18.
- 44.
David A. Scott, ‘Multipolarity, Multilateralism and Beyond … .? EU-China Understandings of the International System’ (2013) 21 International Relations 1, pp. 30-51; Stephan Keukeleire/Tom De Bruyn ‘The European Union, the BRICS, and Other Emerging Powers: A New World Order?’ in Christopher Hill/Michael Smith/Sophie Vanhoonacker (eds.) International Relations and the EU (Oxford University Press 2017) p. 418 at 423, 436.
- 45.
Since 2006 at the latest, EU trade policy has also been pursuing its own economic interests with the reorientation by Global Europe, cf. Wolfgang Weiß, ‘Vertragliche Handelspolitik der EU’ in Andreas von Arnauld (ed) Europäische Außenbeziehungen, (Nomos 2014), § 10, para. 174. However, the EU’s commitment to sustainability, development and equality goals is internationally exemplary. On the development policy and sustainable dimension of EU trade policy see also Wolfgang Weiß ‘Die entwicklungspolitische Dimension der EU-Handelspolitik auswirtschaftsvölkerrechtlicher und EU-rechtlicher Sicht’ in Gabriel J Felbermayr/ Daniel Göler/ Christoph Herrmann/ Andreas Kalina (eds.) Multilateralismus und Regionalismus in der EU Handelspolitik (Nomos 2017) p. 301, 312 et seq.
- 46.
Hanns Günther Hilpert supra note 43 at 15.
- 47.
See the priorities of the Finnish Council Presidency for the second half of 2019 Sustainable Europe - Sustainable Future p. 8 f <https://eu2019.fi/documents/11707387/14346258/EU2019FI-EU-puheenjohtajakauden-ohjelma-en.pdf/3556b7f1-16df-148c-6f59-2b2816611b36/EU2019FI-EU-puheenjohtajakauden-ohjelma-en.pdf.pdf>; Michael Hahn, supra note 1 at 275.
- 48.
On the EU’s proposals for reform of the WTO <http://europa.eu/rapid/press-release_IP-18-5786_en.htm> and the policy paper <http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157331.pdf>. On reform proposals of the EU, together with China, India, Canada, etc. regarding the Appellate Body see the joint communication WT/GC/W/752, <http://trade.ec.europa.eu/doclib/docs/2018/november/tradoc_157514.pdf>.
- 49.
Bryce Baschuk ‘U.S. Rejects the EU’s Trade Reform Proposal, Putting WTO at Risk’ Bloomberg (2018) <https://www.bloomberg.com/news/articles/2018-12-12/u-s-rejects-the-eu-s-trade-reform-proposal-putting-wto-at-risk>. Meanwhile EU and Canada established a bilateral Appellate Body replacement, see <http://trade.ec.europa.eu/doclib/docs/2019/july/tradoc_158273.pdf>.
- 50.
Vgl. Michael Hahn, supra note 1 at 277; <https://www.csis.org/analysis/article-25-effective-way-avert-wto-crisis>.
- 51.
- 52.
Comprehensive and Progressive Agreement for Transpacific Partnership.
- 53.
Bernard Hoekman and Laura Puccio, supra note 8 at 5.
- 54.
China initiated a dispute settlement procedure, WT/DS544 - US - Certain Measures on Steel and Aluminium Products. The EU procedure is known as WT/DS548 - US - Certain Measures on Steel and Aluminium Products.
- 55.
Article XIX GATT in conjunction with the SG Agreement. Safeguard measures were initially provisionally imposed by the EU as of July 2018 and were converted into definitive measures upon completion of the procedure, see Commission Implementing Regulation 2019/159 imposing definitive safeguard measures against imports of certain steel products, OJ 2019 L 31/27; for notification to the WTO, see WTO document G/SG/N/8/EU/1 and Commission press release <https://ec.europa.eu/info/news/commission-publishes-its-findings-steel-safeguard-investigation-2019-jan-04_en>. For safeguards against the US see Commission Implementation Regulation 2018/886 (2018) OJ L 158/5.
- 56.
For more on this see the chapter by Edwin Vermulst and Juhi Sud in this volume; Christoph Herrmann and Carolin Glöckle ‘Der drohende transatlantische Handelskrieg um Stahlerzeugnisse und das handelspolitische “Waffenarsenal” der EU’ (2018) EuZW, 477 at 481, 482.
- 57.
See on this Alicia Garcia Herrero, Europe in the midst of China-US strategic economic competition: What are our options?, (CesIfo Forum 1/2019) 11 at 12, Table 1; Gabriel Felbermayr and Marina Steininger, Trump’s trade attack on China − who will have the last laugh? (CesIfo Forum 1/2019) 27-33.
- 58.
- 59.
For the exterritoriality issue of WTO exceptions see the last chapter of this volume.
- 60.
Commission Delegated Regulation 2018/1100 amending the Annex to Regulation 2271/96, 2018 OJEU L 199 I/1.
- 61.
Council Regulation 2271/96 on protection against the effects of the extra-territorial application of instruments adopted by a third country, 1996 OJEU L 309/1.
- 62.
Sascha Lohmann, Extraterritorial US Sanctions (SWP Comment 2019/C 05, 2019), <https://www.swp-berlin.org/10.18449/2019C05/>.
- 63.
“A maturing partnership – shared interests and challenges in EU China relations”, COM (2003) 533 final.
- 64.
Stephan Keukeleire and Tom De Bruyn, supra note 44 at 432.
- 65.
Sunghoon Park ‘EU’s strategic partnership with Asian countries’ (2019) Asia Europe Journal 1, 3.
- 66.
See Finnish Presidency supra note 47 at 9.
- 67.
Trade Policy Review - China 2016, WT/TPR/S/342, pp. 20, 95 et seq.
- 68.
For an analysis also with regards to their WTO compatibility see the chapters by Frank Hoffmeister and by Edwin Vermulst and Juhi Sud in this volume.
- 69.
Regulation 2019/452 of the European Parliament and of the Council establishing a framework for the screening of foreign direct investments into the Union, OJ 2019 L 79/1.
- 70.
See Commission Staff Working Document on Foreign Direct Investment in the EU, SWP (2019) 108, pp. 13, 15, 23.
- 71.
Commission, Amended proposal for a Regulation of the European Parliament and of the Council on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries COM(2016) 34.
- 72.
Alicia Garcia Herrero, supra note 56 at 11, 18, 19.
- 73.
New Strategic Agenda 2019-2024 <https://www.consilium.europa.eu/media/39914/a-new-strategic-agenda-2019-2024.pdf> pp. 4, 6.
- 74.
World Trade Report 2018, supra note 31 at 101.
- 75.
As to the reasons against taking side with the US, see Alicia Garcia Herrero supra note 57 at 11, 16, 17.
- 76.
Cf. with regard to China Stephan Keukeleire and Tom De Bruyn, supra note 44 at 437, 438.
- 77.
Cf. Alicia Garcia Herrero, supra note 57 at 11, 15, 16.
- 78.
One example: The interpretation of public bodies so central for Article 1.1 and hence the scope of application of the WTO SCM agreement was conceived rather narrow by WT/DS379/AB/R, para. 317 – US – Anti-Dum** and Countervailing Duties (China): A public body is not “any entity controlled by a government” as decided by the panel and proposed by the US, but only “an entity that possesses, exercises or is vested with governmental authority”. For criticism see the separate opinion in Appellate Body, WT/DS437/AB/RW, para. 5.242 et seq – US – Countervailing Duty Measures on Certain Products from China.
- 79.
See Iulianna Romanchyshyna, ‘Is the US EU potential cooperation on industrial goods consistent with Article XXIV GATT?’ (EUTiP 2019) <https://more.bham.ac.uk/eutip/is-the-us-eu-potential-cooperation-on-industrial-goods-consistent-with-article-xxiv-gatt/>.
- 80.
- 81.
S. also Bernard Hoekman and Laura Puccio, supra note 8 at 6.
- 82.
Cf. Alasdair Young ‘European Trade Policy in Interesting Times’ (2017) 39 Journal of European Integration 7, 909 at 912.
- 83.
For the “trade politics as policy sub-system approach” cf. Alasdair Young and John Peterson, Parochial Global Europe. 21stcentury trade politics (Oxford University Press 2014) 23 et seq.
- 84.
The 16+1 format is a Chinese initiative aiming at intensifying and expanding cooperation with 11 EU Member States (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia) and 5 Balkan countries (Albania, Bosnia and Herzegovina, Macedonia, Montenegro, Serbia) concerning i.a. investments, transport, science. For China, infrastructure and high as well as green technologies are priorities in economic cooperation.
References
Alden C / Large D (2015) On Becoming a Norms Maker: Chinese Foreign Policy, Norms Evolution and the Challenges of Security in Africa, 221 The China Quartely 2015, pp. 123-142
Allee T /Elsig M / Lugg A (2017) The Ties between WTO and Preferential Trade Agreements, 20 JIEL, pp. 333-363
Baschuk B (2018) U.S. Rejects the EU’s Trade Reform Proposal, Putting WTO at Risk, Bloomberg. Available at: https://www.bloomberg.com/news/articles/2018-12-12/u-s-rejects-the-eu-s-trade-reform-proposal-putting-wto-at-risk
Callahan W (2012) Sino-speak: Chinese Exceptionalism and the Politics of History, 71 The Journal of Asian Studies, pp. 33-55
Felbermayr G / Steininger M (2019) Trump’s trade attack on China − who will have the last laugh?. CesIfo Forum 1/2019. Available at: https://www.ifo.de/DocDL/CEsifo-Forum-2019-1-felbermayr-etal-us-china-trade-war-march.pdf
Frankopan P (2019) The New Silk Roads, Bloomsbury, New York
Hahn M (2019) We’ll Always have Geneva: The Existential Crisis of the US-led Multilateral Trading System. In: Govaere I / Garben S (eds) The Interface Between EU and International Law, Hart Publishing, Oxford, pp. 269–292
Herrero A G (2019) Europe in the midst of China-US strategic economic competition: What are our options?. CesIfo Forum 1/2019. Available at: http://bruegel.org/wp-content/uploads/2019/04/US_China_strategic_competition_EU_080419.pdf
Herrmann C / Glöckle C (2018) Der drohende transatlantische Handelskrieg um Stahlerzeugnisse und das handelspolitische “Waffenarsenal” der EU, EuZW 2018, pp. 477-483
Hilpert H G (2014) China’s Trade Policy, SWP Research Paper. Available at: https://www.swp-berlin.org/fileadmin/contents/products/research_papers/2014_RP01_hlp.pdf
Hoekman B / Puccio L (2019) EU Trade Policy: Challenges and Opportunities, RSCAS Policy Papers 2019/06, 1. Available at: https://cadmus.eui.eu/bitstream/handle/1814/61589/RSCAS%20PP%202019_06.pdf?sequence=1&isAllowed=y
Johnston A I (2008) Social States. China in International Institutions, Princeton University Press, Princeton
Kang D C (2007) China Rising: Peace, Power and Order in East Asia, Columbia University Press, New York
Keukeleire S / De Bruyn T (2017) The European Union, the BRICS, and Other Emerging Powers: A New World Order?. In: Hill C / Smith M / Vanhoonacker S (eds.) International Relations and the EU, Oxford University Press, Oxford, pp. 418-440
Lohmann S (2019) Extraterritorial US Sanctions, SWP Comment 2019/C 05. Available at: https://www.swp-berlin.org/10.18449/2019C05/
Maçães B (2019) Belt and Road: A Chinese World Order, C. Hurst, London
Malkin A (2018) Made in China 2025 as a Challenge in Global Trade Governance, CIGI Papers No. 183. Available at: https://www.cigionline.org/sites/default/files/documents/Paper%20no.183_0.pdf
Park S (2019) EU’s strategic partnership with Asian countries, Asia Europe Journal, pp. 1-7
Scott D A (2013) Multipolarity, Multilateralism and Beyond … .? EU-China Understandings of the International System, 27 International Relations, pp. 30-51
USTR (2018) 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States on the Trade Agreements Program. Available at: https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF
USTR (2019) 2018 Report to Congress On China’s WTO Compliance. Available at: https://ustr.gov/sites/default/files/2018-USTR-Report-to-Congress-on-China%27s-WTO-Compliance.pdf
VanGrasstek C (2019a) The Trade Policy of the US under the Trump Administration. EUI RSCAS Working Paper 2019/11
VanGrasstek C (2019b) Trade and American Leadership, Cambridge University Press, Cambridge
Vidigal G (2019) WTO Adjudication and the Security Exception, 46 Legal Issues of Economic Integration, pp 203-224
Wang Y (2011) Harmony and War: Confucian Culture and Chinese Power Politics, Columbia University Press, New York
Wang Y (2015) The Myth of Chinese Exceptionsalism: A Historical Perspective on China’s Rise. In: Aggarwal V K / Newland S (eds.) Responding to China’s Rise, Springer, Cham, pp. 51-74
Weiß W (2014) Vertragliche Handelspolitik der EU. In: von Arnauld A (ed) Europäische Außenbeziehungen, Nomos, Baden-Baden, pp. 515-587
Weiß W (2017) Die entwicklungspolitische Dimension der EU-Handelspolitik auswirtschaftsvölkerrechtlicher und EU-rechtlicher Sicht. In: Felbermayr G J / Göler D / Herrmann C / Kalina A (eds.) Multilateralismus und Regionalismus in der EU Handelspolitik, Nomos, Baden-Baden, pp. 301-339
WTO (2017) World Trade Report 2017, World Trade Organization Geneva. Available at: https://www.wto.org/english/res_e/booksp_e/world_trade_report17_e.pdf
WTO (2018) World Trade Report 2018, World Trade Organization Geneva. Available at: https://www.wto.org/english/res_e/publications_e/world_trade_report18_e.pdf
**aoxue L (2012) US to Continue Tightening Trade Policy on China, China’s Foreign Trade 5, pp. 64-65
Young A (2017) European Trade Policy in Interesting Times, 39 Journal of European Integration 2017, pp. 909-923
Young A and Peterson J (2014) Parochial Global Europe. 21st century trade politics, Oxford University Press, Oxford
Zenglein M / Holzmann A (2019) Evolving made in China 2025: China’s industrial policy in the quest for global tech leadership, Merics Papers on China No 8/July 2019. Available at: https://www.merics.org/sites/default/files/2019-07/MPOC_8_MadeinChina_2025_final.pdf
Zhang F (2011) The rise of Chinese exceptionalism in international relations, 19 European Journal of International Relations, pp. 305-328
Zhang F (2013) Chinese Exceptionalism in the Intellectual World of China’s Foreign Policy. In: Rosemary Foot (ed) China across the Divide: The Domestic and Global in Politics and Society, Oxford University Press, Oxford, pp. 44-65
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Weiß, W. (2020). EU Multilateral Trade Policy in a Changing, Multipolar World: The Way Forward. In: Weiß, W., Furculita, C. (eds) Global Politics and EU Trade Policy. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-34588-4_2
Download citation
DOI: https://doi.org/10.1007/978-3-030-34588-4_2
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-34587-7
Online ISBN: 978-3-030-34588-4
eBook Packages: Law and CriminologyLaw and Criminology (R0)