Kevin Kalomeni

Following the failure of the WTO Doha round, a global liberalization offensive from European institutions is in full action. Among the tools deployed, the EU extends to regulatory issues the subjects covered by its Preferential Trade Agreements (PTAs). Regulatory cooperation plays an increasing part in this European externalization strategy, while remaining difficult to properly identify and assess. This research aims at fulfilling this gap by providing a typology of different regulatory schemes used within trade agreements. While past research focused on legal design variation across trade agreements, this thesis adopts another approach. It concentrates its efforts on legal design variation intra-agreement, specifically variation between regulatory sectors in a single agreement. Recent addition to the European trade network, the EU and Canada presented the Comprehensive and Economic Trade Agreement (CETA) as the “gold standard” for the new generation of trade agreements. This thesis looks thus at this referential treaty and attempts to answer the following question: What are the different types of regulatory design within CETA, and how to explain types variation across regulatory sectors?

Referring to the literature on international Legalization and some of its recent evolutions (K. W. Abbott and Snidal 2000; K. W. Abbott et al. 2000), I propose two dimensions to build four different types of “regulatory design”: nature of obligation (Hard/Soft) and mode of decision (Ex-ante/Ex-post). Four design types are established to categorize the different regulatory schemes possible: Type 1 (Ex-Ante/Hard) setting immediate and binding regulations; Type 2 (Ex-Post/Hard) delaying rule-making but keeping binding obligation; Type 3 (Ex-Ante/Soft) providing a list of detailed but voluntary regulations; Type 4 (Ex-post/Soft) establishing a delayed and voluntary cooperation mechanism. Through reviewing CETA and selecting sectors where a “technical standards” cooperation scheme is established, I identify 7 regulatory sectors: Biotechnology (Biotech), Forest products (Forest), Geographical Indications (GIs), Motor Vehicles (MVs), Pharmaceutical products (Pharma), Professional Qualifications (PQ), Raw Materials (Raw). Two are identified within Type 1 (GIs & MVs), two in Type 2 (Pharma & PQ) and three in Type 4 (Biotech, Forest & Raw). Instances of Type 3 are absent from CETA.

To explain the negotiation process resulting in the choice of Design types, I mobilize a neo-functionalist theoretical framework (Niemann 2013; Rosamond 2005), putting forward the incremental and issue-by-issue style of technical discussion that happened during negotiation process. Borrowing from Lavenex (2014) typology of functionalist extension, I argue that experts in charge of the negotiation follow a mutual learning instrumental logic to regulate jointly a sector. They re-define each their potentially diverging preferences by deploying a “co-optive” form of power. This type of functionalist externalization acts as an intervening variable. It mediates the two dyadic factors in charge of explaining design features variation: symmetry/asymmetry of Trade flows, and convergence/divergence of pre-existing Regulatory Frameworks. Referring to previous trade economics contributions, Trade flow looks at the influence in trade policy of “Super-Star Exporters” and products differentiation (Osgood et al. 2016; Osgood 2017; Melitz 2003). This factor focusses on the type of trade patterns between the EU and Canada, between symmetry and asymmetry. If a sector is found to have asymmetrical trade flows, negotiators will use an Ex-ante design, which lists the exact products exported across the borders. If the flows are symmetrical, negotiating parties use an Ex-post design, adopting a more open approach to regulatory cooperation. Regulatory framework looks at the type of global value chains governance. It emphasizes the function of “orchestration” fulfilled by private and public regulations (K. W. Abbott and Snidal 2009, 2010; Gereffi, Humphrey, and Sturgeon 2005).

This thesis posits that when countries’ regulatory frameworks are divergent, prior to the negotiation, they privilege the use of Hard obligation. When the frameworks are convergent, they use Soft obligations. To explain the variation of design types, three hypotheses are formulated: Type 1 is caused by asymmetry and divergence, Type 2 by symmetry and divergence, and Type 4 by asymmetry but convergence. The three hypotheses are confirmed for 6 sectors on 7, Biotech being the sole exception defying theoretical expectations. For empirical testing, a qualitative multi-method approach was adopted, in accordance with G. Goertz (2017). Two methods of comparison were combined: across-case and within-case. The empirical analysis is thus divided in two parts, the first one compares the 7 sectors altogether, while the second uses process-tracing for each sector. In terms of data, different sources are harnessed: trade statistics from Eurostats, public/private regulatory documents and position papers. I also conducted 24 interviews with EU and Canadian actors.

Trade policy – Regulatory cooperation – legalization – CETA – neo-functionalism – Global Value Chains