Tony Heron

Trading in development: norms and institutions in the making/unmaking of European Union–African, Caribbean and Pacific trade and development cooperation

This paper offers a contribution to recent debates on European Union (EU) external trade and development policy, with a specific focus on the African, Caribbean and Pacific (ACP) group of countries. The question asked is why the EU encountered such difficulties in the attempt to translate its normative preferences for freer trade and closer economic integration into a series of binding agreements? Drawing on both economic constructivist and historical institutionalist insights, it is argued that the case for reform initially rested on a strong convergence between institutions and ideas, enabling the EU to discursively present desired policy reforms as necessary to satisfy World Trade Organisation trade rules. However, in due course, the institutional dynamics behind the latter began to diverge from the EUs policy preferences and blunt its norm-based argument – thus creating the space for transnational coalitions to, first, question and, ultimately, undermine aspects the EUs trade and development prospectus for the ACP.

Limits to market power: Strategic discourse and institutional path dependence in the European Union–African, Caribbean and Pacific Economic Partnership Agreements

The following article offers a critical engagement with recent economic constructivist scholarship as a means of understanding the nature of the European Union’s ‘market power’. It does so by focusing on the African, Caribbean and Pacific group of countries, and seeks to explain why — in spite of the European Union’s preponderant market power — the goal of promoting trade liberalisation and regulatory harmonisation through regional Economic Partnership Agreements (EPAs) ultimately fell short of original ambitions. We highlight the inadequacies of materialist accounts of the European Union’s market power in this case and instead take our cue from the (predominantly) constructivist literature emphasising the role of transnational advocacy coalitions. We argue, however, that the latter do not go far enough in their exploration of the non-material correlates of the European Union’s market power by considering fully its discursive dimension. To address this shortcoming, we draw on Craig Parsons’ distinction between ideational and institutional logics of explanation to understand how the invocation of institutional constraints affects the impact of particular discursive strategies. We argue that, in our specific case, the success or failure of the Economic Partnership Agreements rested not just on the fungibility (or otherwise) of the European Union’s material power or the campaigning of transnational coalitions, but on the congruence between the ideas used by European Union policy actors to justify the Economic Partnership Agreements and the institutional norms associated with the setting in which these ideas were deployed.

Regional encounters: explaining the divergent responses to the EU’s support for regional integration in Africa, the Caribbean and Pacific

Abstract In this article, we map and explain the unevenness of African, Caribbean and Pacific (ACP) responses to the EU’s external promotion of regional integration in the context of the Economic Partnership Agreements (EPAs). Although the controversies associated with the EPAs are typically attributed to a common set of problems, what remains to be fully explained is why these manifested themselves to a greater or lesser extent in different national and regional contexts. We account for this variance as a product of the degree of congruence between the institutional trajectory of individual regional projects and the model of economic integration prescribed by the EU in its post-Lomé prospectus for the ACP. We describe this congruence as either ‘high’, ‘medium’ or ‘low’ and use this explanatory model to account for variances in ACP responses to the EPAs, which would otherwise provide an untidy fit with accounts preoccupied with the economic determinants of bargaining outcomes.

Immigration and Self-Reported Well-Being in the UK

Much recent research suggests that immigration has had little, if any, negative impact on the labour market outcomes of natives. In this study we focus on ascertaining the effect of immigration on subjective as opposed to objective indicators of native well-being. Our analytical approach exploits spatial and temporal variation in the net inflows of foreign-born individuals across local areas in England. We find using both a fixed effects and instrumental variable specification that net inflows of foreign-born individuals are associated with modest negative subjective well-being effects for the population as a whole, but that there is a notable degree of heterogeneity in this relationship. Specifically, relatively older individuals (60 ), those with below average household incomes, the unemployed and finally those without any formal educational qualifications experience much more pronounced well-being losses than their younger, financially better-off and employed counterparts. These observed well-being differentials across social groups are similar to voting patterns evident in the recent UK referendum on EU membership. We put forward perceived labour market competition as one of the mechanisms underpinning these results. In support of this premise, we find that the negative relationship between inflows of foreign-born individuals and the subjective well-being of the native-born population in England is much more substantive when macroeconomic conditions are relatively less favourable.

Governing the Formal Economy: The Convergence of Theory and Divergence of Practice

This chapter asks what contemporary development studies tell us about state–market relations. I argue that, although the 1980s and 1990s were synonymous with neoliberalism and the supposed retreat of the state, this was the period when institutional analysis—not least, of the state itself—began to make its mark on development studies. I suggest that institutionalism is now providing the basis for a convergence of sorts between orthodox and heterodox theories, with respect to issues such as the origins of private property rights, norms of democratic transparency and accountability, the importance of bureaucratic autonomy, elite consensus and state capacity. From this perspective, I argue, the rise of the ‘BRICs’ signifies the superiority of neither state- nor market-oriented development; rather, it is the idiosyncratic institutional characteristics of individual nation-states that ultimately accounts for variation in outcomes between those that achieve development success and those that do not.

The Rise and Fall of Preferential Trade

This chapter examines the creation and subsequent operationalization of the concept of SDT for developing countries as part of the post-war trade architecture. In so doing, it identifies preferential trade as the centrepiece of this and goes on to trace its growth and subsequent decline following the 1993 Uruguay round, which heralded the deepening and widening of multilateral trade disciplines — including, most notably, the introduction of the new DSU under the WTO. The creation of the WTO is without a doubt the single most important factor behind the various trade reforms detailed in this book. In what follows, however, we treat this — and even more so the knock-on effect that the establishment of the WTO had for non-reciprocal trade preferences — as part of what has to be explained rather than an independent causal variable. To do this, the chapter emphasizes two important points that do not always figure prominently in the extant literature. The first concerns the historical patterns and institutional practices that characterized the governance of international trade prior to the establishment of the WTO. The debate about trade preference erosion is, almost invariably, couched in terms of an irreconcilable tension between the principle of SDT for developing countries, on the one hand, and that of MFN, on the other. We argue, however, that this tension was far from inevitable. Simply put, we suggest that despite the various reforms to the GATT that were administered in the name of SDT at no point was the latter placed on a secure legal footing.

European Policy Diffusion and the Politics of Regional Integration in the Pacific

One of the major criticisms levelled at unilateral preference schemes is that they discourage ‘South-South’ trade by inhibiting local integration through encouraging preference-receiving firms to target exports at preferencegranting countries rather than regional trading partners (see Chapter 2). Accordingly, the promotion of regionalism and the furthering of ‘South-South’ trade are seen as vital components in cushioning the loss of preferences and smoothing the transition to reciprocal free trade. In the case of the EPAs — again the main focus of the chapter — the EU has arguably gone the furthest in this direction by introducing a so-called ‘regional preference’ clause by which the removal of intraregional trade barriers between ACP countries represented a precondition for the maintenances of trade privileges (albeit now on the basis of reciprocity). This mechanism can be traced back to the Cotonou Agreement, which linked the successful conclusion of WTO-compatible EPAs to creating and consolidating regional institutions in accordance with the regional configurations identified later by the European Commission. The general vagueness of Cotonou meant that, at the time, the precise means by which these two processes would be causally linked remained underspecified.

Understanding the EU-ACP Economic Partnership Agreements: The Case of CARIFORUM

On 15 October 2008, the Caribbean Forum of African, Caribbean and Pacific states (CARIFORUM) became the first and, at the time of writing, only region to sign a comprehensive EPA with the EU.1 The agreement came less than a year after the expiry of the WTO waiver and thus provided early symbolic affirmation of the merits of the EU’s post-Lome trade vision. The timing of the CARIFORUM agreement was also significant in that it appeared to underscore the importance that European Commission officials placed on a swift conclusion to the EPA negotiations in order to safeguard preferences from further WTO litigation. As a general explanation for why CARIFORUM chose to sign a comprehensive agreement, however, the necessity of WTO compliance has become progressively less plausible over time. Indeed, the central thrust of the academic literature accompanying the EPAs has been to question the importance of this — especially when weighed against the independent, political and commercial interests of the EU (see inter alia Gibb 2000; Hurt 2003; Ravenhill 2004; Goodison 2007; Faber and Orbie 2009; Heron and Siles-Brugge 2012). But in dismissing the importance of WTO compatibility such accounts have generally failed to offer a satisfactory alternative explanation for the behaviour of ACP countries (as opposed to the EU) in the EPA negotiations. The CARIFORUM agreement is particularly noteworthy in this respect because, in signing a full EPA, the region effectively broke ranks with the rest of the ACP, which has so far resisted much of the EU’s post-Cotonou trade agenda.

Southern Africa and the Global Politics of Trade Preference Erosion

In this final substantive chapter, we turn our attention to southern Africa and, more particularly, the cases of Lesotho and Swaziland — two tiny, landlocked countries almost entirely surrounded by South Africa (entirely so in the case of Lesotho), regularly cited as among those most highly exposed to preference erosion. Whereas Chapters 3 and 4 focused exclusively on EU trade preferences, the main point of reference here is the United States, specifically its AGOA trade programme. This has operated since 2000 and is often compared favourably to the EU’s more elaborate system of trade preferences, especially with regard to AGOA’s more flexible rules of origin affecting textiles and clothing exports. In this vein, Peter Gibbon (2003: 1809) has described AGOA as the ‘most far reaching initiative both in the history of US-African relations, and more generally in relation to the claim that concessions in the area of trade provide better long-term prospects for developing countries’ economic development than do ones in aid’. In the first two years of AGOA’s existence, the five leading African exporters of textiles and clothing — Kenya, Lesotho, Madagascar, Mauritius and South Africa — increased their exports to the United States by a reported 85.3 per cent (Gibbon 2003).

Developmentalism and the Political Economy of Trade Adjustment in Mauritius

By any measure, Mauritius must be regarded as one of the most remarkable — and improbable — economic success stories of the post-war period. Mauritius inherited a legacy common to many post-colonial societies of monocrop agriculture, extreme racial inequality, population pressures, unemployment and poverty. At the time of independence from Great Britain in 1968, sugar was responsible for practically all economic activity on the island, accounting for no less than 93 per cent of exports and 94 per cent of all cultivated land (Bowman 1991: 104). By the 1990s, however, Mauritius had undergone a remarkable transformation: while sugar remained an important mainstay of the economy, the island had successfully diversified into manufacturing, luxury tourism, offshore financial services and, most recently, information and communications technology. In the process, it recorded one of the highest sustained rates of economic growth in the world — GDP has grown at 6 per cent per annum more or less uninterrupted since the early 1980s — witnessing a tripling of real income in the process. What is more, this growth record was underpinned by an impressive performance according to a range of broader human development indicators including life expectancy, adult literacy, education and income equality (Kothari and Wilkinson 2013).