At the Crossroad of Free Trade and Trade Protectionism: Analyzing EU’s External Trade Policy under the Impetus of Global Trade Liberalization

Abstract: Departing from the case of textile and clothing trade dispute between the EU and China in 2005, it has been noticed that the EU’s policy in textile trade to a large extent has been situated in a position of dilemma. On the one hand, the growing global impetus of liberalization in the sector forces the EU to open up its market to cheap textile imports from the developing countries; on the other hand, the fierce protectionist pressures come from the domestic producers and slow down the paces towards liberalization, or sometimes even take setback towards more conservative performances. By placing this case in a broader context, the EU’s external trade policy is confronted with the similar dilemma, swaying between the trade liberalization and trade protection. Consequently, does the EU emerge in the current multilateral trading system of the WTO as a force for trade liberalization or a force for trade protectionism? Bearing this question in mind, the general climate of global trade under the GATT/WTO and the EU’s external trade policy will firstly be examined. Then, the EU’s trade protectionism is about to be explained by strategic trade theory, the high political content of the EU’s external trade policy and the fragmentation in the EU’s policy networks; while the EU’s inclination towards trade liberalization will be explained by the implications from the conventional trade theory and new institutionalism, and as well as the impacts from the general climate of global trade. The results shows that the EU’s external trade policy under the global trade liberalization is a mixture, neither pure liberalization nor pure protectionism. With regard to the trade issues concerning to the vital interests, the Union without exception inclines to conservative protectionism; whereas concerning the issues of less importance, compromises and concessions always lead the outcomes of the policy to the inspiring liberalization.