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The European Union as a Global Economic Actor. James A. Piazza EU Workshop: “Globalization, Democratization and the European Union” University of North Carolina at Chapel Hill May 11, 2002. Methods of Teaching. • Use of Political Science Theory • Use of Descriptive Statistics

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the european union as a global economic actor
The European Union as a Global Economic Actor

James A. Piazza

EU Workshop: “Globalization, Democratization and the European Union”

University of North Carolina at Chapel Hill

May 11, 2002

methods of teaching
Methods of Teaching

• Use of Political Science Theory

• Use of Descriptive Statistics

• Use of Cases

features of the european union
Features of the European Union

• “Deepness” of Integration

• Strength of Institutions

• Integration has been Incremental

• National Sovereignty Preserved

• National-Level Politics Is Still Important


• How “deeply” integrated is the EU?

• “Deep” compared to what?

• How do we measure “deepness” of integration?

• How does “deepness” affect international politics?

original framework
Original Framework

Neo-Functionalism = Supranational policy coordination in one area “spills over” into other areas, creating demand for more supranational policymaking, creating supranational political actors and driving further integration.

Haas (1958), Lindberg (1963)

rejoinder framework
Rejoinder Framework

Neo-Realist Intergovernmentalism = Primary motivator for further integration remains national governments. European Union institutions still dominated by national governments. Power remains with European Commission.

Millward (1994); Moravcsik (1995)

synthesis framework
Synthesis Framework

Multi-Level Governance = Supranational collective decision-making undermines state sovereignty by fragmenting and spreading decision-making across levels and actors. Transnational actors are free to “shop” for policies they prefer at multiple levels

Marks, Scharpf, Schmitter and Streeck (1996)

deep compared to what comparing international trade regimes
“Deep” Compared to What? :Comparing International Trade Regimes

European Union (EU) = 15 signatories of Maastricht Treaty

NAFTA = 3 signatories of North American Free Trade Agreement

APEC = 21 members of Asia-Pacific Economic Cooperation

Mercosur = 6 members of customs union of South America


Austria Canada Australia Argentina

Belgium Mexico Brunei Bolivia

Denmark U.S. Canada Brazil

Finland Chile Chile

France China Paraguay

Germany Hong Kong Uruguay

Greece Indonesia

Ireland Japan

Italy S. Korea

Netherlands Malaysia

Portugal Mexico

Spain New Zealand

Sweden Papua New Guinea

U.K. Peru







characteristics of trade regimes
Characteristics of Trade Regimes

EU = Multilateral Free Trade Area for 15 States in 1993

Common Currency, Monetary Policy for 12 states

Free Movement of People Within Area

5 Institutions

NAFTA = Multilateral Free Trade Area by 2008

Side Agreements on Labor, Environment, IPR

No common external tariff policy

APEC = Voluntary Unilateral Sectoral Liberalization with Promises of Multilateral Free Trade Area by 2020

Discussion of Harmonization of Standards

Mercosur = Multilateral Lowering of Trade Barriers in 1995

Average Tariff Levels Dropped from 26% to 12%

No Common External Tariff Policy

Basic Indicators, 1999


RegimePopulationGDP Per CapWorld GDP

(millions) ($ US) %

EU 379 22,176 27.8

NAFTA 401 24,426 32.4

APEC 2,123 8,284 58.2

Mercosur 236 4,872 3.8


Source: World Bank (2000) World Development Report

Economic Performance and Social (In)equality


GDP Growth Unemployment GINI Index

1990-99 (%) 2000 (%) 2000

EU 2.5 8.3 29.9

NAFTA 2.8 4.3 42.0

APEC 4.9 5.7 41.9

Mercosur 4.2 10.4 52.0


Sources: World Bank (2000) World Development Report; International Labor Organization (2001) Yearbook of Labour Statistics.

Trade and Trade Dependency, 1999


Trade as % % of Import

of GDP World Trade Dependency

EU 63.7 39.8 -1.88

NAFTA 28.5 20.7 1.70

APEC 28.9 37.8 1.77 (-1.48†)

Mercosur 22.9 2.0 2.37


† = excluding U.S.

Sources: World Bank (2000) World Development Report; APEC Website

Intra-Regime Trade, 2000


Internal TradeInternal Trade as ($US, bn) % of Total Trade

EU 448.8 60.6

NAFTA 2,790.2 32.2

APEC 4,192.2 68.6

Mercosur 37.4 17.9


Sources: Eurostat (2001) External and Intra-European Trade; OECD (2001) Monthly Statistics on Trade; World Bank (2002) Data.

trade conflict between the eu and the u s
Trade Conflict Between the EU and the U.S.

• Doha Meeting of the WTO (November 2001)

• Bush-EU Steel Tariff Row (March-May 2002)

doha 2001
Doha 2001


• Failures of the WTO Meeting in Seattle

• Past Trade Conflict Between U.S. and EU Over Agriculture

Subsidy and Anti-Dumping Curbs

James Wolfensohn (World Bank): UK gives $50 billion in aid to

Developing World; gives $350 billion in subsidies to British farmers

• Developing World Resistance to Environmental and Labor


agreements made at doha
Agreements Made at Doha

• Agreement of New Trade Round to be Completed in 2005

• EU Agreed to Relax Agricultural Subsidies (No Strong Language)

• EU Insisted Investment, Competition and Environmental Rules

be on the Table in Next Round

• U.S. Agreed to Relax Anti-Dumping Curbs

• India, Speaking for Developing World, Retained Veto Power

Over Protectionism in the Guise of Environmental Standards

• Developing World Obtained Right to Subsidize Pharmaceuticals

During Healthcare Emergencies

political results of doha
Political Results of Doha

• EU Emerged as Preeminent Actor Promoting World Trade

• U.S. Overshadowed

• EU’s Pascal Lamy Visited Greenpeace Ship (Rainbow Warrior)

• Trade Unions Excluded from Meetings

• ICFTU Fails to Extract Agreement for WTO to Work More

Closely with ILO

• AFL-CIO “Threatened” By EU’s Offer of Textile Concessions

to Developing Countries

• Jose Bove, “[Doha Meeting] is a victor of rich over poor.”

steel conflict 2002
Steel Conflict, 2002


• WTO Ruling in Favor of U.S. over EU Trade Barriers for

Bananas and Beef

• Conflict Over U.S. Use of Antidumping Investigations

2001: 348

2000: 251

1990’s: 232 per year on average

China and EU are 1st and 2nd Most Frequent Targets

• Crisis in the Steel Industry

Job Losses in the Steel Industry, 1975-2000


Jobs Lost%


Germany 926 74.5

France 197 69.9

United Kingdom 379 69.2

Italy 167 67.5

Belgium 491 57.9

United States 431 55.4


Source: International Labor Organization (2001) Yearbook of Labour Statistics

timeline of steel conflict
Timeline of Steel Conflict

June: President Bush orders probe of steel industry

March 6: U.S. Trade Representative Robert Zoellick announces

steel tariffs of up to 30%

March 7: EU, Japan, Korea, China, Switzerland and Norway

charge that tariffs violate WTO rules

• arbitrarily applied to all steel products

• not in response to sharp increase of imports

• U.S. fails to demonstrate job loss is due to imports

• goes beyond remedy of injury caused by imports

timeline cont
Timeline cont.

March 27: European Commission retaliates

• Authorizes 14.9 to 26% tariffs on U.S. steel

• Demands U.S. $2 billion per year in compensation

• Renews objections to U.S. withdrawal of Kyoto

• Announces plans to implement U.S. $3 billion

satellite navigation system opposed by U.S.

Le Monde: “[Bush] defines good and evil in accordance with his own interests”

La Libre Belgique headline: “How Dare He”

March 27: Reaction of Zoellick

• Announces plans to complain to WTO

• Commission has reacted before evidence of import


timeline cont1
Timeline cont.

April 12: Paul O’Neill (U.S. Secretary of Treasury) announces

that tariffs may be lifted for some EU companies

Rumor that Tony Blair may cut a separate deal with

U.S. Dept. of Commerce raises ire of Lamy

General Union of Britain (GMT) begins to lobby

Blair’s Trade and Industry Secretary, Patricia Hewitt

April 20: Grant Adonas (U.S. Undersecretary of Commerce

offers at Paris OECD meeting to lift tariffs against

producers that “discipline” production.

EU counteroffer: U.S. must discipline anti-dumping

timeline cont2
Timeline cont.

May 7: EU member states unanimously approve sanctions

• Immediate tariffs against U.S. steel

• 100% tariffs against “strategic” non-steel products:

Citrus fruits



Steel (under 30%)

= Florida

= North and South Carolina

= South Carolina

= Pennsylvania, Ohio, West


Will be implemented by mid-June

Germany and Sweden express concern that “tit-for-tat” will spark

trade war

states and domestic actors
States and Domestic Actors

Division of EU Member States:

• France, Italy, Spain, Portugal and Greece support sanctions

• Germany, UK and Sweden have reservations

• Many British companies may be exempted

Confederation of British Industry (CBI) and Bundesverband der

Deutschen Industrie (BDI) issue statement:

• “An escalation of the dispute in in nobody’s interest

• Urge Commission to refrain from overt retaliation, but

support compensation


Haas, Ernst (1958) The Uniting of Europe: Political, Social and Economic

Forces 1950-1957. Stanford University Press.

Lindberg, Leon (1963) The Political Dynamics of European Integration.

Stanford University Press.

Marks, Gary, Fritz Scharpf, Philippe Schmitter and Wolfgang Streeck

(1996) Governance in the European Union. Sage.

Millward, Alan (1992) The European Rescue of the Nation-State.


Moravcsik, Andrew (1995) “Liberal Intergovernmentalism and

Integration.” Journal of Common Market Studies. 33:611-28.