WTO Judicial Politics and EU Trade Policy: Business Associations as Vessels of Special Interest?

Abstract

This article: • Contributes to the literature on interest groups showing how the interplay of domestic and international institutional structures critically affects the character of lobbying. • Contributes to a better understanding of EU trade politics, highlighting how such processes are systematically affected by changes in global governance structures. • Traces empirically how important institutional innovations were introduced in EU trade policy making in order to adapt to reform of the WTO dispute settlement mechanism. • Offers systematic empirical evidence about the evolution of the character of dispute settlement cases initiated by the EU in the WTO. • Shows empirically how business associations traditionally active in EU trade policy making increasingly act as 'vessels' of narrow and specialized interests. This article focuses on the effects of the WTO's quasi-judicial system of dispute resolution on the politics of trade policy making in the European Union (EU). We argue that this institutional innovation had a systematic transformative effect on EU trade politics, creating pressures for institutional adaptation and changing the character of organized trade policy lobbying. On the one hand, the new environment of the WTO created pressures for the EU to implement significant institutional innovations to ease access for private parties and generate an influx of information to strengthen offensive market access actions. On the other hand, this reform directly affected firms' incentives to mobilize politically, creating incentives for specialized lobbying. The empirical analysis shows how these two processes ultimately led to a re-organization of trade policy lobbying in the EU and compelled European business associations to become increasingly receptive to the demands of special interests.

The Rise of Corporate Lobbying in the European Union: An Agenda for Future Research

“…However, because of their cross-sectional nature and their exclusive focus on firms, these studies are also of little help in shedding light on whether the relative presence of firms has increased over time within EU interest group populations relative to other interest organizations. Finally, the work by Poletti et al (2016) offers evidence of the growing relevance of firms lobbying over time by showing how important institutional changes in the WTO incentivized EU sectoral business associations lobbying over trade policy to adapt so they accommodate the interests of firms. While in this case the analysis includes a temporal dimension, the generalizability of these findings remains limited due to this work's exclusive focus on the specific issue of trade.…”

“…Finally, the work by Poletti et al . (2016) offers evidence of the growing relevance of firms lobbying over time by showing how important institutional changes in the WTO incentivized EU sectoral business associations lobbying over trade policy to adapt so they accommodate the interests of firms. While in this case the analysis includes a temporal dimension, the generalizability of these findings remains limited due to this work's exclusive focus on the specific issue of trade.…”

Promoting sustainable development through trade? EU trade agreements and global value chains

“…Yet, these reputational concerns play a significant role only in a small number of instances, particularly in the case of branded or luxury goods-producing firms that can be more easily targeted by activists (Vogel, 2009; Malesky and Mosley, 2018). Moreover, these firms often do not lobby individually but do so through broad sectoral associations (Poletti et al ., 2016), which allows them to minimize the visibility of their lobbying activity, hence their reputational concerns. So, while import-dependent firms favor trade liberalization via PTAs they should also be expected to broadly oppose the inclusion of costly regulatory burdens that may contribute to increasing the variable costs of their imports.…”

A research on EU trade policy system

“…As a result of the customs union and the common market, the trade relations among member states have lifted all tariffs, quantitative restrictions and any other forms of trade barriers, forming an internal trade relationship between the single tariff area and the common market (Poletti, 2016). Foreign trade policies and measures such as tariffs, non-tariff measures, international agreements and other general trade policies are only applicable in trade relations with third countries.…”