Domestic Politics in EU External Economic Relations: US-EU Competition in Trade

Abstract

The European Union (EU) is a key player in international trade relations with its foreign trade policy having a great influence on shaping the international political economy. EU trade policy, however, is equally shaped in response to the trade policies of other actors. Especially EU-United States (US) trade relations are crucial to analysing the EU as a global power in the making. Since the mid-1990s, the EU has concluded free trade agreements (FTAs) with several emerging markets. The first FTA accomplished was with Mexico; its latest FTA concluded was with the Republic of Korea. What drives the EU to accomplish FTAs with some emerging markets and not others? To explain this puzzle a liberal or societal approach will be proposed including two explanatory variables. The first variable draws attention to the global economic context within which EU foreign trade policy is rooted thereby highlighting in particular US-EU competition in trade. The second variable focusses on economic interests dominant in the domestic politics of EU member states. This will be illustrated by a short analysis of the EU-Mexico FTA.