Realizing Europe’s Soft Power in External Cooperation and Trade

Project Information

RESPECT

Grant agreement ID: 770680

DOI

10.3030/770680

Project closed

EC signature date 27 September 2017

Start date 1 January 2018

End date 31 October 2021

Funded under

• SOCIETAL CHALLENGES - Europe In A Changing World - Inclusive, Innovative And Reflective Societies

Total cost

€ 2 901 098,75

EU contribution

€ 2 497 461,25

Coordinated by

EUROPEAN UNIVERSITY INSTITUTE
Italy

Periodic Reporting for period 3 - RESPECT (Realizing Europe’s Soft Power in External Cooperation and Trade)

Reporting period: 2020-03-01 to 2021-10-31

Summary of the context and overall objectives of the project

The EU is distinct among large global economic powers in the extent to which it uses trade policy to pursue non-trade policy objectives. These are established in the Treaty of Lisbon and include sustainable development, human rights, labour standards and environmental protection. Changes in the structure of the world economy, rising geopolitical tensions, and the increasing urgency of addressing global market failures and governance challenges, require EU external policy to balance many objectives: enhancing prosperity, competitiveness, and economic resilience on the one hand, and promoting sustainability and European non-trade goals on the other. The 2020 review of EU trade policy reaffirms the need to balance pursuit of material interests with European values.
In line with the EU´s strategy, the overall objective of the RESPECT research project was to investigate factors that support or inhibit attainment of NTPOs and to draw policy recommendations to realize better EU interests and values in the formulation and implementation of external policies. The premise underlying much of the research is that, notwithstanding pressures for stronger forms of autonomous action in the areas of defence and national security, EU external policy must depend primarily on ‘soft power’ instruments, such as financial and technical assistance, international standards-setting, partnerships, multilateral engagement with like-minded countries and international regulatory cooperation.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The project produced a wide range of multidisciplinary output spanning more than 70 papers and reports, many published in three CEPR e-books, a special issue of the journal Global Policy, and a Brookings Institution volume. Numerous policy briefs were prepared and disseminated through social media and the RESPECT consortium’s networks. Soliciting input and feedback from policymakers and practitioners was an important feature of the project design, using a range of tools, including webinars, conferences, expert surveys and consultations meetings.
RESPECT surveys revealed support among stakeholders for the strategy of linking trade policy to the pursuit of non-trade goals (EU values), with a majority of experts pointing to the importance of leveraging trade with other policy instruments. A key research finding is that there is no robust evidence of a causal relationship between inclusion of nontrade provisions in EU reciprocal trade agreements and improvement in relevant indicators that measure non-trade outcomes, while there is some evidence that foreign direct investment flows into trading partner countries is positively associated with improvements in nontrade outcomes.
Quantitative and qualitative research concludes that achievement of EU external policy goals calls for effectively combining and leveraging a range of policy instruments, including tailored development assistance, policy dialogues, and regulatory cooperation. The capacity of domestic institutions in partner countries to implement non-trade provisions is a key determinant of non-trade outcomes. Differentiated technical and financial assistance that reflects partner country conditions and priorities is a critical complement to trade agreements. An underappreciated instrument of EU external engagement is policy dialogue centred on joint understanding of what constitutes good regulatory practice in different issue areas. Such ‘soft law’ cooperation appears to have been associated with gradual convergence in regulatory standards in China over time in several non-trade policy areas, including the environment.
Policy instruments through which EU Member States can support enterprises, including enterprise networks, trade promotion organizations and export credit agencies complement EU-level trade policy mechanisms. However, transparency on their use is important to avoid negative competitive spillovers. Current mechanisms to assure transparency and analysis of their effects are inadequate. Greater policy coherence, both vertically and horizontally can be achieved by revisiting and bolstering interactions with the private sector and civil society organisations in the EU and partner countries, both in the design of ex-ante impact assessments and ex-post monitoring and evaluation.
Revising trade sustainable impact assessments to identify a limited number of non-trade issues deemed to be priorities for both the EU and partner countries and to involve stakeholders in the design of a roadmap to address these, including identification of appropriate (nontrade) tools to pursue them, would bolster the potential sustainable development impact of trade agreements. Creating stronger partnerships with civil society groups and businesses in the EU and partner countries to help monitor implementation, identify problems, and help undertake ex-post monitoring and evaluation of results would bolster accountability for results.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

A goal of RESPECT was to generate high-quality academic research that was also policy relevant. The RESPECT Consortium sought to achieve this by engaging with different stakeholders to refine preliminary policy recommendations. Numerous and regular interactions occurred with officials in the European Commission, especially DG Trade and the trade and development policy communities in Brussels and Geneva (including international organizations), as well as with stakeholders in selected partner countries (including China). Efforts to engage early with practitioners through surveys and consultation meetings and to present preliminary findings to the above-mentioned actors helped to raise awareness of the research and enhanced its relevance.
The political and societal salience of RESPECT increased over time, in part reflecting rising geo-economic and geo-political tensions during its implementation. The regular interactions with practitioners led to adaptation of some of the planned work to reflect changed circumstances, including in the EU’s relationship with the US and China. More citizens see openness as potentially conflicting with strategic autonomy and worry about the ability of governments to deliver on core values. An important result from the project is providing evidence on the effectiveness of strategies centred on linking trade (access to the EU market) to partner country actions and performance on non-trade policy areas. Another was to suggest external policy initiatives and instruments that could improve such performance (outcomes). RESPECT research identified plurilateral cooperation as an alternative to the traditional pillars of EU external policy: autonomous action, economic diplomacy, trade agreements, and support for/engagement in multilateral institutions. Issue-specific plurilateral agreements with like-minded countries can address policy spillovers in a range of areas, including climate change and sustainable development, and provide potential frameworks for the EU to improve policy coherence by integrating several types of instruments – aid, finance, knowledge; technical assistance; dialogue – in addition to trade (the offer of access to the EU market). In contrast to the growing prominence of views arguing for the exercise of hard power, RESPECT research suggests a focus on placing more, not less, emphasis on leveraging EU soft power to achieve external policy objectives.