EU TRADE POLICY LOBBYING BY INDIVIDUAL FIRMS

Agressive business lobbying on trade issues is much less common in Brussels that it is for example in Washington D.C. Indeed, U.S. firms and trade associations are very proactive in business-government relations on trade policy. This "bottom-up" approach contrasts with the "top-down" EU approach where public authority, in particular the European Commission, plays the predominant entrepreneurial role.

This said, the European Commission makes a concerted effort to integrate firms and other private actors into the trade policy-making process in order to gain bargaining leverage not simply visà-vis third countries, but also over its own member states. By helping to elaborate policy solutions, interest group participation increases the legitimacy of the Commission on external trade issues.

While firms do increasingly seize the opportunities available to them at the supranational level, EU trade policy making is marked by a particular logic. Firms face a trade-off between pressing for their immediate advantages and responding to the interests of the European Commission, which promises them access to the policy-making process. Since the Commission is not immediately accountable to constituency interests, it can select interest groups and firms that it prefers to work with and ignore others. Trade contact group member associations include the following: European Automobile Manufacturers' Association (ACEA), Association of the European Airlines (AEA), American Chamber of Commerce to the EU (AMCHAM EU), BUSINESSEUROPE, Confederation of European Community Cigarette Manufacturers (CECCM), European Liaison Committee for the Agricultural and Agri-Food Trade (CELCAA), Community of European Railway and Infrastructure Companies (CER), European Chemical Industry Council (CEFIC), European Association for Forwarding, Transport, Logistic and Customs Services (CLECAT), European Association of Automotive Suppliers (CLEPA), Confiad Paneuropean Network for Customs Representation (CONFIAD), CUSTOMSPLATFORM, The European Information & Communication Technology Industry Associationn (DIGITALEUROPE), European Branded Clothing Alliance (EBCA), European Community Association, of Ship Brokers and Agents (ECASBA), European Community Shipowners' Association (EECA-ESIA), European Free Trade Association (EEA), European Organisation for Security (EOS), European Port Community Systems Association (EPCSA), European Small Business Alliance (ESBA), European Shippers' Council (ESC), EuPC (European Plastic Converters), The Association of European Chambers of Commerce and Industry (EUROCHAMBRES), EUROCOMMERCE, European Petroleum Industry Association (EUROPIA), EUROPRO, The European Alliance of Customs-related Service Providers 'EurTradeNet), Federation of European Private Port Operators (FEPORT), Foreign Trade Association (FTA), International Association of Ports and Harbours (IAPH), International Air Transport Association (IATA), International Road Transport Association (IRU), Minor Metals Trade Association (MMTA), European Ship Suppliers Organization (OCEAN), Association of European Public Postal Operators (POSTEUROP), THALES, International Union of Private Wagons (UIP), International Union of combined Road-Rail transport Companies (UIRR) and the World Shipping Council (WSC).

In selecting private partners, the Commission follows two objectives: first, it requires technical expertise to advance on its policy proposal; second, and on trade issues in particular, it is interested in finding pan-European solutions to prevent disputes between the member states that would risk stalling trade negotiations. Firms therefore have to decide between lobbying for their immediate advantage at the risk of being ignored and framing their demands in terms of a pan-European interest even if they are not certain of obtaining an advantage.

This logic creates two distinct channels for trade policy lobbying in the EU. A firm or industry interested in classic protectionism is most successful when it uses a national lobbying strategy directed at the member states and ultimately, the Council of Ministers. Supranational lobbying, in turn, requires making demands with pan-European dimensions. Lobbyists thus have to find ways of proposing pan-European protectionism, most commonly in the form of pan-European regulation. Alternatively, they can lobby for trade liberalization in order to establish or maintain contacts with the European Commission and then hope to integrate more precise demands in the details of trade regulation or the implementation of agreements.

Consultation with private actors happens at various stages of EU trade policy-making. Business interests, furthermore, affect the use of instruments of commercial defence, with which the Community tries to ensure equal competition for European and foreign firms. During trade negotiations and with respect to instruments of commercial defence, the sollicitation by the Commission plays a key role in shaping the access of private actors to the policy-making process.

The Commission consults extensively with firms, interest groups and NGOs in order to define specific stakes in its proposal. The Commission DG Trade and DG Industry maintain stable relations with groups such as Business Europe or sectoral business associations. Input from interest groups is valuable to the European Commission because it can help strengthen its negotiation stances vis-à-vis the member states and its trading partners.

However, individual groups have few means of putting direct pressure on the Commission to ensure that their demands will be taken into account. Within each member state, they can try to lobby their governments to affect the consensus between member states and the Commission during all phases of the policy cycle. They can also contact the European Parliament, which holds hearings and produces reports on trade issues in order to shape the atmosphere in which EU objectives are determined and monitored. During the adoption phase, national parliaments and the European Parliament play a greater role under co-decision but lobbying on trade still concentrates on the interchange between the Commission and member governments.

In addition to ongoing trade negotiations, business lobbying can also target separate administrative procedures to ensure protection against 'unfair' foreign competition. These instruments of commercial defence include anti-dumping and countervailing duties and the Trade Barriers Regulation of 1994. All of these administrative instruments require the identification of unfair competition practices, for which firms often have better information than governments. The EU tries to facilitate business input,so as to indentify the greatest number of trade barriers or obstacles to competition.

Within DG Trade, the Market Access Unit's primary role is to interact with business actors to gather information on existing trade barriers. A central pillar of the work is the maintenance of a Market Access Database. Business participation is important for the internal and external negotiations of the European Commission. The sollicitation is based on the Commission's hopes of increasing its technical expertise, its legitimacy, its ability to maintain consensus among the member states and its leverage in trade negotiations. However, since Commission officials do not depend on re-election by constituency interests, firms face a challenge in exerting direct pressure on European officials to reinforce their demands. Business access is not automatic; it depends on the degree to which private actors can offer the elements the Commission is interested in. Business lobbying on trade is thus marked by a particular exchange logic, where firms provide expertise and support in order to gain access to the policy process.

The selective access at the European level creates a two-channel logic for business lobbyists, which specifies different routes according to the content that firms seek to depend. Classical protectionism is easier to achieve in interaction with national governments, while cooperation on the elaboration of pan-European solutions promises an excellent working relationship with the European Commission. Pan-European trade policy can be in support of liberalization,but it can also consist of regulatory protectionism that does not discriminate on the grounds of nationality but appeals instead to a greater Community interest.

With few exceptions, European trade policy applies to all industries alike, so we should expect producers and firms to move their lobbying efforts to the supranational level. Surprisingly,this is not the case.

By comparing lobbying in agriculture and textiles and clothing, we can see that protectionist lobbying is only successful when it is supported within the member states, which is why lobbyists eventually have to concentrate their efforts on the domestic route. Tellingly, lobbyists targeting the Commission to maintain import restrictions on textiles and clothing were ignored in the absence of member states pressure. By contrast, a study of the service trade shows how business lobbyists have been able to influence the European Commission's objective once they embraced liberalization as a policy objective. This was easy for the exporting companies in financial serices, but required an important redefinition of policy demands in telecommunication services, where firms were not naturally inclined to support liberalization. Distinguishing between the types of demands can thus help to explain the success or failure of trade policy lobbying in the EU.

Conclusion

In trade policy, firms face a trade-off: if they want to maintain good elations with the European Commission, they have to frame their demands in terms of pan-European solutions, which often means moving away from their immediate interest.

However, firms remain the principal source of expertise on trade barriers and come therefore into their own whenever the EU seeks to increase its leverage vis-à-vis its trading partners.

The complexity of the strategic intercations in European trade policy caution against superficial analyses of trade policy demands in the EU. Because of the two-channel logic, we should expect to find many firms declaring themselves in favour of trade liberalization simply because this ensures them greater access to the EU trade negotiators. A study of trade preferences thus needs to distinguish between the strategic positions of firms and their underlying preferences, which might be more ambiguous than the official declarations would lead us to believe. Finally, the comparison between the various business-government relations shows that European trade policy lobbying is complex. While firms might capture their government's position or even the supranational agenda in certain cases, the Commission also instrumentalizes European firms and even affects the content of their lobbying demands. In the end, EU trade policy results as much from producer demands as it does from the complex decision-making procedures, the institutional self-interest of public actors and the power struggle created by their interaction.