The politicisation of trade policy and its impact on transatlantic trade relations

In the past decade, issues of trade policy have become increasingly contentious in the European Union (EU), its member states and the United Kingdom (UK). While trade has been traditionally described as a technocratic policy field dominated by expert negotiators and industrial lobbyists, recent years have seen far-reaching civil society mobilization and contentious parliamentary and (social) media debates about agreements such as the EU-US Transatlantic Trade and Investment Partnership (TTIP), the EU-Canada Comprehensive Economic and Trade Agreement (CETA), and in the debates surrounding the UK’s new post-Brexit trade competence. In addition, and in the wake of the COVID pandemic and growing great power rivalry, we have seen trade policy actors become more attuned to geopolitical and security issues.

In light of these developments, it has become important, for scholars and policymakers alike, to understand the politics – and not just policy – of international trade This blog post summarises discussions held at Chatham House on 23 April 2024 at an event co-organised by the Jean Monnet on Transatlantic Trade Politics, the Centre for Inclusive Trade Policy and the Trade and Public Policy network.1 Participants in this event were asked to consider some of the following questions: which factors make some trade agreements (geo)politically contentious, while others hardly register in public debates? Which provisions become flashpoints of contestation, and why? And what are the implications of these developments for transatlantic trade relations?

There was wide agreement amongst participants that trade policy remained politicised in the EU, US and UK. Opponents of free trade had become emboldened and trade policy was being conducted in a less permissive international environment. There was a fear that the election of Donald Trump in November 2024 or a conflagration involving China could substantially worsen the situation, fatally weakening multilateral institutions such as the World Trade Organization (WTO).

In the EU, the recent vote of the French Senate against CETA, which potentially threatens the continued application of the agreement, was seen as a worrying development. It brought back the spectre of the TTIP debates that exaggerated the negative regulatory impacts of transatlantic trade agreements, e.g. by invoking hormone-treated beef. Important for understanding the current politicisation of EU trade was the waning global influence of the bloc, as the Single Market declines in relative importance; the regional/local concentration of economic impacts of trade liberalisation; and the unbalanced nature of trade policy debates that tend to favour trade agreement critics. UK trade policy debates around an agreement with the US, for their part, had also featured contentious food safety issues, but some constructive discussions on regulatory cooperation had still taken place between both parties.

This entwinement of politicisation and geopoliticisation can also be observed in the US. Here there is a wider move away from openness and multilateralism in trade, which shows considerable continuity with the Trump Administration. There were some doubts as to whether this represented a fully coherent strategy. Domestic electoral considerations in battleground states/districts are a key driver of the Biden Administration’s trade policy, which is focused on: de-risking (from China), onshoring and friendshoring production. Transatlantic relations, however, are not that important in shaping the administration’s current focus, despite the greater concern from an EU and UK perspective with what is perceived to be US protectionism.

The discussion generated two broad sets of policy prescriptions, although these were not unanimously endorsed by participants:

1. Depoliticise trade policymaking. More specific prescriptions under this heading included eschewing mixed agreements in the case of the EU, thus avoiding the need for ratification by all EU Member States; focusing trade agreements on less contentious issues (such as tariff elimination), rather than overburdening the trade policy agenda; and avoiding overly public debates on trade policy. Questions were raised as to whether politicisation was an entirely new phenomenon and what avoiding a public debate might look like.

2. Framing trade policy in (economic) security terms. Several participants underscored the importance of a security or economic protection framing for trade policy. This could also tackle the cultural (or economic nationalist) drivers of politicisation. This should avoid protectionism and consider the wider geopolitical context in which trade policy is conducted. It could also involve measures to tackle the uneven distributional impacts of trade agreements on a regional level. Others cautioned against securitising Chinese supply chains given companies’ reliance on them. Meanwhile, there was some discussion of how the geopolitical framing was very centred on the experience of countries in the Global North. Used to being the stronger party in asymmetric trade negotiations, shifting North-South power dynamics were seeing them increasingly turn to unilateral measures.

Footnote

1. Discussions were held under the Chatham House rule and involved an audience of policy practitioners and academics. The event was funded by the Erasmus+ programme of the European Union. Where relevant, every effort has been made to report the views of speakers fairly and accurately.