Lobby for TTIP, Lobby for the WTO? Global Value Chains, Stakeholders and the EU in Global Economic Governance

Global value chains create new challenges to the global economic governance as they promote liberalization far beyond tariff reduction by putting investments, services and regulatory standards at the forefront. The European Union (EU), as expressed in its latest Trade for All communication (2015), is a pioneer of such ambitious liberalization and it has always been an advocate of a strong multilateral World Trade Organization (WTO). Given the stalemate of the Doha Round, however, the EU, like other economies, has started to negotiate bilateral trade agreements such as the deal with Singapore or the Transatlantic Trade and Investment Partnership (TTIP). As these are leaps forward in the EU’s economic agenda, we would assume that stakeholders welcome the initiation of bilateral negotiations. What are the preferences of these stakeholders within the EU on the increasing shift to bilateral trade agreements, and how can we explain their positions? In examining these questions, the paper triangulates a survey with stakeholders in the Civil Society Dialogue and content analysis of the responses to the European Commission’s consultation on EU future trade policy. The findings suggest that despite the limited progress in the WTO stakeholders prefer multilateral negotiations over bilateral ones in the areas of investments and services. Explaining this counterintuitive result, the paper finds that the anticipated degree of institutionalization influences stakeholders’ preferences. Stakeholders prefer the WTO for negotiations on investments and services where they expect a low degree of uncertainty and a high likelihood of enforcement of rules. This advances our understanding of stakeholders’ preferences on trade agreements which affect global value chains.