Negotiating Trade in Uncertain Worlds: Misperception and Contestation in Eu-West Africa Relations by Clara Weinhardt

Author:Clara Weinhardt [Weinhardt, Clara]
Language: eng
Format: epub
Tags: International Relations, Trade & Tariffs, Capitalism, Political Ideologies, Political Science, General
ISBN: 9781351402521
Google: rti_DwAAQBAJ
Goodreads: 40986011
Publisher: Routledge
Published: 2019-11-22T11:26:30+00:00

Payoff disjuncture: Differing perspectives on the causal link between trade and development

Attending to strategic uncertainty and the lack of information about the other side’s preferences is not enough to explain persistence of incompatible negotiating strategies; only by taking into account their divergent beliefs about the economic conventions at stake can we understand why the EU and West Africa each remained firm on offers the other side ultimately rejected. Analyzing the actors’ payoff disjuncture – their failure to anticipate that the payoff value of free trade for development is highly contested – illuminates how both sides miscalculated possible equilibrium outcomes.

As explained earlier, the trade-development linkage created ambiguity about the kind of “payoffs” the EPA negotiations would deliver – an ambiguity differently construed by either side. In its interpretation of the payoff dimension of the rules of the game, the EU firmly adhered to neoliberal causal beliefs about the trade-development linkage.54 Analyzing the discourses of West African and European actors in EPA negotiations, Del Felice summarized the EU view as “more trade = more economic growth = development.”55 Or, in the words of Trade Commissioner Peter Mandelson: “My overall philosophy is simple: I believe in progressive trade liberalization. I believe that the opening of markets can deliver growth and the reduction of poverty.”56 This perspective had two consequences: the association of payoffs with trade liberalization rather than provision of aid, and a frame of reference in which more liberalization meant more gains, as the EU saw trade liberalization as the best way to foster the mutual goal of development.

The EU thus expected that gains from cooperation would primarily relate to trade regulation, with the payoffs of the game represented by implementing a “reform package” geared towards further trade liberalization. Hence, the payoffs commonly associated with trade cooperation – gains from trade liberalization – were at the same time seen as payoffs that could be beneficial in development negotiations. In particular, EPA agreements were seen as an opportunity to secure extensive macroeconomic reforms in West Africa to help the region stimulate economic growth. Reducing the obstacles to investment;57 good governance;58 “long-standing structural reform;”59 and the diversification of production60 were explicitly mentioned as central aspects of trade agreements with West Africa. Moreover, EU officials referenced the drop in West African export rates under the earlier Lomé trading scheme, which had offered unilateral preferential market access to ACP countries, to justify the EPA’s approach of reciprocal market opening.61 Direct financial aid was seen as a negligible by-product of cooperation focused on establishing trade-related “development” reforms.

West Africa interpreted the substance of the payoffs far more in terms of financial aid and the ability to protect its markets. Unlike the EU, West Africa portrayed market liberalization reforms and the development dimension as distinct.62 In contrast to the European side’s adherence to neoliberal beliefs, the causal relationship between trade liberalization and development was not considered straightforward. Hon. Alhaji Mohamed Daramy, ECOWAS Commissioner for Trade, Customs and Free Movement of Persons and Goods argued, “market-access opening will not lead

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