Do EU Trade Negotiations Harmonise Regulatory Standards? Domestic Business Politics and Regulatory Convergence

Matthias Goetz

Further liberalisation of trade flows between the EU and third countries increasingly requires regulatory convergence. While several studies have suggested scope conditions to explain its likelihood, little is known about how and why processes of regulatory convergence actually occur. This paper contributes to this research gap, analysing why similar institutional contexts, identified by the existing literature as a precondition for regulatory convergence, do not always produce regulatory convergence between the EU and third countries. It therefore compares regulatory convergence processes through regulatory dialogues and trade negotiations between the EU and major trading partners (South Korea, Canada, United States/TTIP, Japan) in two "most similar" cases with divergent outcomes: the automotive and food sectors. Expert interviews have been conducted with EU and national government officials as well as business representatives to complement information from policy reports and newspaper articles. It is argued that processes of regulatory convergence between the EU and trading partners rely on transnational business coalitions which advocate international standards as a focal point in their lobbying to narrow preference gaps between the European Commission and its third-country counterparts. Unlike in the automotive sector, lead EU and national business associations in the food sector have failed to accommodate concerns among individual members against regulatory convergence. This has triggered lobbying of individual producer groups and reinforced opposition of citizen groups. This opposition has influenced multiple veto points in the EU system and thus reversed initial efforts within the European Commission for regulatory convergence. The paper concludes that institutionalist accounts of regulatory convergence must be refined with mobilisation strategies of EU business groups and their effects on actors within the EU system. Theoretically, it contributes to an emerging "New Interdependence" literature combining institutionalist literature with open economy approaches to analyse the effect of domestic politics on the construction of rules governing interdependence.

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