Free Trade Agreements Have Bitten Off More than They Can Chew

Keijzer, T.; Martino, E. and Quintavalla A. (2019). Free Trade Agreements have bitten off more than they can chew in "Upgrading Trade in Services in EU and International Economic Law", Simon Tans & Marc Veenbrink (eds)

15 Pages Posted: 30 Sep 2019

See all articles by Titiaan Keijzer

Titiaan Keijzer

Erasmus University Rotterdam (EUR), Erasmus School of Law

Edoardo D. Martino

University of Amsterdam - University of Amsterdam Faculty of Law; European Banking Institute

Alberto Quintavalla

Erasmus University Rotterdam (EUR)

Date Written: June 1, 2019

Abstract

We analyse the tension surrounding the EU trade policy, with a particular focus on Free Trade Agreements (FTAs) that have recently gained considerable attention. The paper highlights different key trade policy objectives, including economic interests and moral values, and the expansive nature of the EU regarding the allocation of competences vis-à-vis Member States. Based on an a corporate versus FTA-law study regarding the right to establishment, our argument is that Member States may feel pressured by their competitors to change their national laws to implement the signed FTAs. This holds true, even if these changes are not strictly required according to the text of the FTA. The state of affairs can be explained through application of Hill’s capability-expectation gap theory. This framework suggests that the current limited EU competences can scarcely serve the EU’s international behaviour, thus causing a lack of coherence between the internal (protecting Member States’ interests) and external action (promoting trade). In this sense, FTAs have bitten off more than they can chew. Such a situation could negatively affect the EU’s reputation with Member States and citizens as well as its bargaining power with third countries. However, Hill’s framework also indicates how the capability-expectation gap could be reduced. In the short term, this requires a sincere dialogue with EU citizens, clearly signalling what the EU can, and what it cannot do. In the long term, European decision-makers ought to be particularly careful in drawing a clear line between the specific competences of the EU and those of the Member States. One viable option would be to grant the EU additional powers for concluding FTAs, as to prevent competition between Member States to arise.

Keywords: EU FTAs; M&A; corporate law; capability-expectation gap; multilevel governance

JEL Classification: F10; K29

Suggested Citation

Keijzer, Titiaan and Martino, Edoardo D. and Quintavalla, Alberto, Free Trade Agreements Have Bitten Off More than They Can Chew (June 1, 2019). Keijzer, T.; Martino, E. and Quintavalla A. (2019). Free Trade Agreements have bitten off more than they can chew in "Upgrading Trade in Services in EU and International Economic Law", Simon Tans & Marc Veenbrink (eds), Available at SSRN: https://ssrn.com/abstract=3454427

Titiaan Keijzer

Erasmus University Rotterdam (EUR), Erasmus School of Law ( email )

Netherlands

Edoardo D. Martino (Contact Author)

University of Amsterdam - University of Amsterdam Faculty of Law ( email )

Postbus 15654
1001 ND
Amsterdam, Noord-Holland 1001 ND
Netherlands

European Banking Institute ( email )

Frankfurt
Germany

Alberto Quintavalla

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan
Rotterdam, 3062PA
Netherlands

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