To protect, or not to protect: an empirical comparison of two of the EU’s free trade agreements

Abstract: In this essay, I use an empirical approach to explore two recent free trade agreements struck by the European Union: the EU-Korea Free Trade Agreement and the EU-Japan Economic Partnership Agreement. By comparing the EU’s tariff concessions on goods in both instances, I identify the goods that were liberalised in the former agreement but excluded from the latter. I subsequently try to explain why these goods are missing from the Japanese treaty, the hypothesis being that the impact of the Korean treaty on imports could serve to predict their possible exclusion. This hypothesis is tested by running regressions estimating the Korean treaty’s relative impact on all goods, and then letting the coefficients representing that impact serve as independent variables in a probit model. The results were rather conclusive in that the larger the magnitude of treaty impact on imports of a certain good, the less probability that said good gets liberalised in the Japanese case. Through discussing actors and interests, I interpret this as proof of anti-liberalising lobbying forces affecting treaty text outcomes.