‘Conditionality Reversed’: How Trade Became a Tool for the EU’s External Refugee Policy

Previous studies suggest that commercial interests and values pull European Union (EU) trade policy formation in different directions. In most cases, this tug-of-war is won by commercial interests, which possess a strong base in the EU Commission and among Member States. By contrast, in the case of the 2016 EU-Jordan Compact values came out victorious. Indeed, while including trade concessions from the EU as a key component and constituting a novel and unique approach to refugee protection, the Compact represents an extreme case of value-based trade policy. How can we explain this policy outcome? This paper reports the results of a case study based on 13 in-depth interviews with negotiators from the Commission, the External Action Service, and the Amman delegation. It shows how the refugee crisis led to the Jordan Compact through three mechanisms: issue linkage, political pressure, and expertise. First, the analysis explores conditionality reversed, identifying Jordan as a policy entrepreneur leveraging the refugee crisis. Next, it shows how conditionality was used as a technical necessity to justify differentiation in EU trade policy. Finally, it demonstrates how DG Trade acted as a reluctant initiator pushing the Member States to adopt the Compact. These three mechanisms explain the outcome: Jordanian businesses were granted relaxation of the rules of origin of exports to Europe, conditioned on their employment of a minimum share of Syrian refugees.