Who Scripts European Trade Policies? Business-Government Relations in the EU-Canada Partnership Negotiations

Introduction The envisioned Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU figures prominently in the competitive regionalism strategies that mark the relationship between the United States (US) and the European Union (EU). Following the conclusion of the North Atlantic Free Trade Agreement (NAFTA), the EU negotiated a free trade agreement (FTA) with Mexico in 1999 (Dür 2007) and now seeks to establish another foothold in the North American market with a partnership agreement with Canada. The EU's recent turn to bilateral and regional trade negotiations marks an important break with the multilateral commitment and its interest in the World Trade Organization's (WTO) Doha Round, championed by former EU trade commissioner Pascal Lamy. The current CETA talks thus have to be studied in the context of EU trade policy-making in general. Who is behind the political decision to engage in bilateral trade talks? What explains the move from multilateralism to FTAs such as the EU-Canada agreement? In all industrialized countries, domestic support for such initiatives is tepid – in part because the public perceives that these agreements benefit big business rather than workers or the general public. In the EU, the multi-level nature of trade policy further complicates the definition of common objectives: are the member states the drivers of EU trade policy or do the supranational institutions, and in particular the European Commission, determine the goals and the scope of external negotiations? Understanding the CETA negotiations between Canada and the EU necessitates untangling who scripts European trade policy. Presenting the literature on trade policy-making in the EU, this chapter spells out the tensions between supranationalists, which underline the role of the Commission, and intergovermentalists, who insist on the high degree of control of the member states. In particular, I show where they disagree about the autonomy of the supranational authorities, the effective control of member states over the Commission and the influence of interest groups. By nuancing the nature of the relationship between supranational authorities and interest groups, I then argue that an exclusive focus on either one of the three main actors in EU trade policy is misleading. Member states' preferences are crucial and the Commission does listen to interest group concerns, but interest groups also adapt to political constraints. They can therefore become welcome allies in the negotiation between the Commission and the member states. Put differently, the discussion highlights the relationship between the Commission and economic interest groups to point out a missing link in the argument of intergovernmentalists. The Commission can shape the pressures firms exert at the domestic level. The role of the Commission is thus all the more important because it shapes the relationship of the other actors, which are necessarily part of the picture. The chapter divides into three parts. It begins with an overview of the legal framework and EU trade policy literatures arguments on who governs trade policy in the EU and then develops an argument about the dynamics in businessgovernment relations in EU trade policy. The third part turns to the recent policy initiatives and illustrates the theoretical argument in order to draw insights for the current EU-Canada negotiations.