The European Union and New Leading Powers: Towards Partnership in Strategic Trade Policy Areas
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Fordham International Law Journal Volume 32, Issue 2 2008 Article 1 The European Union and New Leading Powers: Towards Partnership in Strategic Trade Policy Areas Dr. Rafael Leal-Arcas∗ ∗ Copyright c 2008 by the authors. Fordham International Law Journal is produced by The Berke- ley Electronic Press (bepress). http://ir.lawnet.fordham.edu/ilj The European Union and New Leading Powers: Towards Partnership in Strategic Trade Policy Areas Dr. Rafael Leal-Arcas Abstract This Article aims at understanding the potential of partnerships of the European Union (‘EU‘) with emergent global actors (the so-called new leading powers (‘NLPs‘) or ‘BRIC countries‘), focusing on international trade law and policy. Although the power base of these actors (Brazil, Russia, India, and China–the BRIC countries) is their respective region (South America for the case of Brazil, Eastern Europe for Russia, the Subcontinent for India, and the Far East for China), there may be specific policy areas in which their influence might be global. With this in mind, the Article raises interesting questions: Is the EU an attractive trade partner for the new leading powers? Does the EU want cooperation with the BRIC countries? What can the EU expect from cooperation with the BRIC countries? What are the characteristics of these partners? What are the EU’s priorities in its foreign trade policy? With which partners should the EU cooperate in which policy areas? With which instruments can the EU engage these partners and how can internal coordination within the EU be ensured? ARTICLES THE EUROPEAN UNION AND NEW LEADING POWERS: TOWARDS PARTNERSHIP IN STRATEGIC TRADE POLICY AREAS* Dr. Rafael Leal-Arcas** INTRODUCTION This Article aims at understanding the potential of partner- ships of the European Union ("EU") with emergent global ac- tors (the so-called new leading powers ("NLPs") or "BRIC coun- tries"),' focusing on international trade law and policy. Al- * This Article was presented on 3 November 2008 at the Institute of International Economic Law of Georgetown University Law Center. I thank the attendees for a lively and fruitful discussion. ** Senior Lecturer in International Economic Law & European Union Law, and Deputy Director of Graduate Studies, Queen Mary, University of London, UK. 2008-09 Visiting Scholar at Georgetown University Law Center (Institute of International Eco- nomic Law). 2008-09 Tillar House Resident Fellow, American Society of International Law. Member of the Madrid Bar. Formerly, Visiting Researcher at Harvard Law School (European Law Research Center) and Fellow at the Real Colegio Complutense (Harvard University); Emile Noel Fellow 2004-05 at New York University School of Law (Jean Monnet Center for International and Regional Economic Law and Justice); Fel- low at the Australian National University; Visiting Scholar during the fall of 2003 at the University of Wisconsin-Madison Law School (Institute for Legal Studies). Ph.D., M.Res. (European University Institute, Florence, Italy); J.S.M. (Stanford Law School); LL.M. (Columbia Law School); M.Phil. (London School of Economics and Political Science); B.A., J.D. (Granada University, Spain). The author has formerly served in various ca- pacities at the World Trade Organization Secretariat (Legal Affairs Division); the United States Court of International Trade (Chambers of Judge Pogue); European Court of Justice of the European Communities (Chambers of Advocate General Kokott); Court of First Instance of the European Communities (Chambers of Judge Lindh); Delegation of the European Commission to the United Nations; United Na- tions Secretariat (Economic and Social Council); European Commission Secretariat- General (Forward Studies Unit); Council of Ministers of the European Union (Legal Service's external relations team); European Parliament Secretariat (Directorate-Gen- eral for research). The author has been a visiting lecturer at Georgetown University Law Center, and has previously taught at the National Law School of India University (Bangalore, India), where he was POROS Chair in European Union law, and the Law School of the Universidade Federal Minas Gerais (Belo Horizonte, Brazil). Dr Leal- Arcas is the author of the book THEORY AND PRACTICE OF EC EXTERNAL TRADE LAW AND POLICY (Cameron May, London, 2008). Contact: [email protected]. 1. BRIC is a term used in economics to refer to the combination of Brazil, Russia, 346 FORDHAMINTERNATIONAL LAWJOURNAL [Vol. 32:345 though the power base of these actors (Brazil, Russia, India, and China-the BRIC countries) is their respective region (South America for the case of Brazil, Eastern Europe for Russia, the Subcontinent for India, and the Far East for China), 2 there may be specific policy areas in which their influence might be global? With this in mind, the Article raises interesting ques- tions: Is the EU an attractive trade partner for the new leading powers? Does the EU want cooperation with the BRIC coun- tries? What can the EU expect from cooperation with the BRIC countries? What are the characteristics of these partners? What are the EU's priorities in its foreign trade policy? With which partners should the EU cooperate in which policy areas? With which instruments can the EU engage these partners and how can internal coordination within the EU be ensured? This Article argues that the EU's objective of engaging with the BRIC countries on trade matters is to establish peace, secur- ity, and prosperity in the twenty-first century. Trade creates eco- nomic ties and generates more prosperity; thus it contributes to peace and security, since nations that trade with each other do not go to war. An example is the EU integration project. The same argument is true multilaterally: before the creation of Doha Round in 2001, developing and least-developed countries India, and China. General thinking is that the term was first prominently used in a thesis by Jim O'Neill, chief global economist, at the Goldman Sachs investment bank. O'Neill argues that the economic potential of Brazil, Russia, India, and China is such that they may become among the four most dominant economies by the year 2050. These countries encompass over twenty-five percent of the world's land coverage and forty percent of the world's population. The BRIC countries have taken steps to in- crease their political cooperation, mainly as a way of influencing the position of the United States on major trade accords, or, through the implicit threat of political coop- eration, as a way of extracting political concessions from the United States, such as the proposed nuclear cooperation with India. See generally Goldman Sachs, BRICs, http:// www2.goldmansachs.com/ideas/brics/index.html (last visited Nov. 11, 2008); Wikipedia, BRIC, http://en.wikipedia.org/wiki/BRIC#citenote-0 (last visited Oct. 24, 2008) (summarizing O'Neill's BRIC thesis). 2. For an economic analysis of the success of the BRIC countries, see generally Dominic Wilson & Roopa Purushothaman, Dreaming with BRICs: The Path to 2050 (Goldman Sachs, Global Econ. Paper No. 99, 2003) (providing economic analysis of the potential for success of the BRIC countries). 3. In 2007, the International Monetary Fund ("IMF") ranked China as the fourth wealthiest nation in the world in absolute terms; Brazil, Russia, and India came in tenth, eleventh, and twelfth respectively. See International Monetary Fund, Report for Selected Countries and Subjects, World Economic Outlook Database, April 2008, http://www.imf. org/external/pubs/ft/weo/2008/01/weodata/index.aspx (last visited Oct. 24, 2008). 2009] THE EUROPEAN UNION AND NEW LEADING POWERS 347 had been marginalized in the world trading system,4 which brought with it serious economic implications. In 2001 in Doha (Qatar), developing countries were promised inclusion in the world trading system in order to achieve a higher level ofjustice and equity in the world. That is why the Doha Round is called the development agenda.' The argument is that a more open and equitable trading system 6 brings peace to the world and, in this sense, the Doha Round should not be approached as a zero- sum game-as many developing countries seem to perceive it- but as a win-win situation.7 To achieve this, a new and better 4. See generally Faizel Ismail, How Can Least-Developed Countries and Other Small, Weak and Vulnerable Economies Also Gain from the Doha Development Agenda on the Road to Hong Kong?, 40 J. WORLD TRADE 37 (2006) (focusing on the concerns and perspectives of least-developed countries ("LDCs")). 5. Not everyone agrees with the governmental position that the Doha Round is beneficial to developing and least-developed countries. For severe criticisms of the Doha Round, see Commission Memo, MEMO/06/247 (June 23, 2006), available at http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/06/247&format= HTML&aged=0&language=EN&guiLanguage=en (noting gains limitations for the "poorest and most vulnerable countries .. "); Press Release, Oxfam, New WTO Frame- work Doesn't Add up to Development (June 22, 2006), available at http://www.oxfam. org/en/news/pressreleases2006/pr060622_wto (questioning the benefit of offers made by the European Union ("EU") and United States) (last visited May 18, 2008); Antoine Bouit, Simon Mevel, & David Orden, More or Less Ambition in the Doha Round: Winners and Losers from Trade Liberalisationwith a Development Perspective, in THE WORLD ECONOMY 1253 (2007) (describing how Doha outcomes are not guaranteed to be bene- ficial for LDCs; rather, outcomes will depend