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The European Union Negotiating Free Trade Agreements with Singapore and Malaysia: Assessing the Costs and Benefits of Comprehensive Legal Arrangements

Marjolein Derous

The European Union (EU) is an international actor pursuing its interests and promoting its values in the world through international agreements. Since 2006, the EU has been including a Chapter on Trade and Sustainable Development to its Free Trade Agreements (FTAs). This makes for comprehensive legal arrangements, covering both further liberalization of trade and adherence to international labour and environmental standards. Engaging in legal arrangements along a hard/soft law dimension comes with specific costs and benefits as pointed out by Abbot and Snidal (2000). This paper analyzes how the type of law (soft vs. hard) and the respective costs and benefits influence the speed of completion of the EU's FTA negotiations. Fostering trade with Southeast Asia is at the core of EU interests yet the Sustainable Development Chapter is highly contested in the region. FTA negotiations were initiated in 2010 with Singapore and Malaysia. 2014 brings a EU-Singapore FTA ready to be ratified while the EU-Malaysia FTA negotiations have reached a point of stalemate. Consisting of two parts, the paper first positions these FTAs along the hard/soft law dimension and identifies the costs and benefits for the EU, Singapore and Malaysia. The second part compares the two negotiation processes and tests the hypothesis that the EU-Malaysia FTA evolves at a slower pace because of specific autonomy costs for Malaysia with respect to core labour standards. Preliminary results point to the equal importance of higher negotiating costs in the EU-Malaysia context because of parallel negotiations on a Trans Pacific Partnership Agreement.

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