The Enduring Case for Policy Space: Assessing the Impact of EU Bilateral Trade Agreements on Environmental and Social Policies

Deborah Martens, Niels Gheyle

Since the late 1980s considerable public and scholarly attention has been paid to a growing imbalance between, on the one hand, international market commitments through trade agreements and, on the other hand, policy space for developing countries to be free and able to pursue the most appropriate mix of economic policies to achieve its goals. The restricting effect on policy space is an important element in the literature on the impact of trade agreements and also one of the main criticisms by opponents of these agreements. However, scholarly literature on policy space to date has three shortcomings. First, it has mainly been used with respect to the impact of the GATT/WTO, even though several authors point out that bilateral and regional agreements are even more constraining. Secondly, the focus has been on North-South agreements, while we have witnessed (partly due to a deadlock on multilateral level) a shift towards North-North agreements too. Thirdly, attention has mainly concentrated on the restrictions placed on industrial policy as tools for development, while North-North agreements (and arguably North-South agreements in the future) increasingly incorporate chapters (such as regulatory cooperation) that impact policy space to develop social and environmental policies. This research wants to address these three lacunae, by focusing on EU free trade agreements with Southern and Northern partners, with a specific focus on policy space for social and environmental policies. As cases we select the EU-Central American Association Agreement (EU-CA AA) and (the negotiations on) the Transatlantic Trade and Investment Partnership (TTIP) with the US. By means of a comparative document analysis and empirical research in Brussels and Central America we evaluate the impact these agreements (will) have on the partner country (and arguably in the case of TTIP, Europe itself) as well as the attention the concept 'policy space' received during negotiations.

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