Hostname: page-component-586b7cd67f-tf8b9 Total loading time: 0 Render date: 2024-11-27T18:24:38.989Z Has data issue: false hasContentIssue false
  • English
  • Français

Adjusting to Liberalization: Tracing the Impact of the WTO on the European Textiles and Chemicals Industries

Published online by Cambridge University Press:  20 January 2017

Thomas C. Lawton  and
Steven M. McGuire
Thomas C. Lawton
Affiliation:
Imperial College London
Steven M. McGuire
Affiliation:
University of Bath
Get access Rights & Permissions [Opens in a new window]

Abstract

Rulings made by the World Trade Organization (WTO) dispute settlement body have, since the organization's creation in 1995, significantly advanced global economic liberalization. The response of business has been varied and far from uniformly supportive of the WTO agenda. The reason stems from the fact that adjusting to liberalization measures is easier in some industries than in others. The response is premised on the strategic alternatives available within an industry. Through examining antidumping (AD) elements of the European Union (EU) trade policy regime in the context of two European industries - chemicals and textiles - we find that both are under severe competitive pressure, due to WTO-induced market liberalization. However, the responses taken by companies within the respective industries are very different. We suggest that while WTO activity catalyzes industry evolution, the form of that adjustment is highly industry specific. In the case of textiles, the disaggregation of the industry value chain allows for a variety of product and locational adjustment strategies. In contrast, the chemicals industry is nationally based, reliant on intellectual property for competitive advantage and structurally limited in its ability to adopt a wide range of adjustment strategies. Therefore, in the absence of alternative strategy options, EU chemical companies lobby for rule harmonization in the WTO.

Keywords

WTOindustry adjustmenttextileschemicalsEuropean Union
Type
Article
Information
Business and Politics , Volume 7 , Issue 2 , August 2005 , pp. 1 - 23
Copyright
Copyright © V.K. Aggarwal 2005 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aggarwal, Vinod K. 1983. “The Unraveling of the Multi-Fiber Arrangement, 1981: An Examination of International Regime Change.” International Organization 37 (4): 617–646.Google Scholar
Aggarwal, Vinod K., Keohane, Robert and Yoffie, David B. 1987. “The Dynamics of Negotiated Protectionism.” American Political Science Review 81 (2): 345–366.CrossRefGoogle Scholar
Akbar, Yusaf. 2003. “Slip Sliding Away? The Changing Politics of European Car Distribution.” Business and Politics 5 (2): 175–192.Google Scholar
Arora, Ashish. 1998. “Patents, Licensing and Market Structure in the Chemical Industry.” Research Policy 26: 391–403.Google Scholar
Baldwin, Robert E. 1988. Trade Policy in a Changing World Economy. Herts: Harvester Wheatsheaf.Google Scholar
Baron, David. 1999. “Integrated Market and Nonmarket Strategies in Client and Interest Group Politics.” Business and Politics 1 (1): 7–34.Google Scholar
BASF. 2004. The consequences of the EU White Paper, News from Textile Chemicals. BASF Group. http://www.basf.de/en/produkte/farbmittel/farben/textil/news/030606.htm?id=V00-WfTfb6Clhbsf2HB Accessed 12 December 2004.Google Scholar
Borrus, Michael, Tyson, Laura and Zysman, John. 1984. How Government Policies Shape High Technology Trade. Berkeley, CA: The Berkeley Roundtable on the International Economy, Working Paper 3.Google Scholar
Braithwaite, John and Drahos, Peter. 2000. Global Business Regulation. Cambridge: Cambridge University Press.Google Scholar
Boarman, P. and Schollhamer, H. (eds.). 1975. Multinational Corporations and Governments. New York: Praeger.Google Scholar
Boddewyn, Jean J. and L Brewer, Thomas. 1994. “International-Business Political Behavior: New Theoretical Directions.” Academy of Management Review 19 (1): 119–143.Google Scholar
Brewer, Thomas L. 1992. “MNC-Government Relations: Strategic Networks and Foreign Direct Investment in the United States in the Automotive Industry.” The International Executive 34: 113–129.Google Scholar
Brewer, Thomas L. 1993. “Government Policies, Market Imperfections, and Foreign Direct Investment.” Journal of International Business Studies 24 (1): 101–20.CrossRefGoogle Scholar
CEFIC (European Chemical Industry Council). 2000. “Developing Countries and the Multilateral Trade System”, CEFIC position paper, 23 November.Google Scholar
CEFIC. 2002. Facts and Figures: The European Chemical Industry in World Perspective.Google Scholar
CEFIC. 2003. CEFIC's Views on EU Trade Policy Post-Cancun, Brussels, November.Google Scholar
CEFIC. 2004. Horizon 2015: Is the European Chemical Industry Losing Its Global Leadership? Brussels.Google Scholar
CEC (Commission of the European Communities). 2002. Twentieth Annual Report from the Commission to the European Parliament on the Community's Anti-Dumping and Anti-Subsidy Activities, Brussels, 27.09.2002, COM(2002) 484 final/2.Google Scholar
Coen, David. 1999. “The Importance of US Lobbying Practice on the European Business – Government Relationship.” California Management Review 41 (4): 27–45.Google Scholar
Crystal, Jonathan. 2003. “What do Producers Want? On the Origins of Societal Preferences.” European Journal of International Relations 9(3): 407–439.Google Scholar
Dymond, William A. and Hart, Michael M. 2000. “Post-Modern Trade Policy: Reflections on the Challenges to Multilateral Trade Negotiations After Seattle.” Journal of World Trade 34 (3): 21–38.Google Scholar
Esty, Daniel. 2002. “The World Trade Organization's Legitimacy Crisis.” World Trade Review 1 (1) 7–22.Google Scholar
Euratex, 2002. European Research in the Clothing and Textiles Sector: A Common Strategy Paper, Brussels, March.Google Scholar
Euratex 2004a. “Europe's Textile and Clothing Industry Warns of China Challenge”, Brussels, 14 January.Google Scholar
Euratex 2004b. “European Textile and Clothing Industry to Launch a Large-Scale Research and Development Programme to Achieve a Technology Breakthrough in Garment Manufacture – LEAPFROG Project”, Brussels, 12 October.Google Scholar
Euratex, 2004c. “Launch of the European Technology Platform for Textiles and Clothing, Brussels”, 23 December.Google Scholar
Euratex, 2005a. “Market Access for European Textiles and Clothing: A Memorandum for Peter Mandelson”, Brussels, 11 January.Google Scholar
Euratex, 2005b. “EU Textile and Clothing Industry Seeks China Safeguards: Criticizes Commission and Member States”, Brussels, 8 April.Google Scholar
European Commission. 2000a. Textile Liberalization Measures – Background, www.europa.eu.int/comm/trade/goods/textile.htm Google Scholar
European Commission. 2000b. “EU Adopts Measures to Liberalize Textiles and Clothing Trade”. www.europa.eu.int/comm/trade/goods/textile/whatson02a.htm Google Scholar
European Commission. 2000c. “High-tech Textiles: A New Perspective for the European Textile Industry”, speech by Erkki Liikanen to the International Symposium for High-Tech Apparel, Textiles and Fashion Engineering with Innovation Forum, Frankfurt, 27 November.Google Scholar
European Commission. 2000d. Symposium chaired by Mr. Pascal Lamy, European Commissioner “The Challenge of Globalization: the European Union's Market Access Strategy”, Workshop N° 3: Trade Barrier Regulation, Trade Barriers Regulation: The First Five Years, 28 November 2000, Palais des Congrès, Brussels.Google Scholar
European Commission. 2002. “Textiles Implementation Issues. Intervention by EU Ambassador to the WTO Trojan”, 31 July. http://europa.eu.int/comm/commissioners/lamy/speeches_articles/sp_trj03.htm accessed 19 January 2004.Google Scholar
European Commission. 2003a. “Textiles: What's New?” http://trade-info.cec.eu.int/textiles/index.cfm Google Scholar
European Commission. 2003b. “Report for the 133 Committee: Overview of Third Country Trade Defence Actions”, http://trade.info.cec.eu.int/133.cfm Google Scholar
0 European Commission. 2003c. Chemical Sector – EU Overview,Google Scholar
http://europa.eu.int/comm/trade/issues/sectoral/industry/chem/index_en.htm Google Scholar
European Commission 2004. Statistics Covering the Year 2004, http://europa.eu.int/comm/trade/issues/respectrules/anti_dumping/stats.htm, accessed 10 April 2005.Google Scholar
European Commission 2005a. “Textile Sector: Guidelines for the Use of Safeguards on Chinese Textile Exports to the EU.” Brussels, 6 April. http://europa.eu.int/comm/trade/issues/sectoral/industry/textile/pr060405_en.htm, accessed 10 June 2005.Google Scholar
European Commission 2005b. “Statement to the Trade Committee of the European Parliament on China and Textiles by Trade Commissioner Mandelson”, Brussels, 15 March. http://europa.eu.int/comm/commission_barroso/mandelson/speeches_articles/temp_mandels_speeches_en.cfm?temp=sppm018_en, accessed 1 April 2005.Google Scholar
European Commission 2005c. Council Regulation (EC) No 428/2005 of 10 March 2005, Imposing a Definitive Anti-Dumping Duty on Imports of Polyester Staple Fibres Originating in the People's Republic of China and Saudi Arabia, Brussels, 10 March.Google Scholar
European Commission 2005d. “EU-China Textiles: Manage Change and Adjustment, not Trade” Speech by Peter Mandelson to textile producers. Palazzo della Regione, Florence, Italy, 6 June. http://europa.eu.int/comm/commission_barroso/mandelson/speeches_articles/temp_icentre.cfm?temp=sppm033_en, accessed 10 June 2005.Google Scholar
European Commission 2005e. Memorandum of Understanding (MOU) Between the European Commission and the Ministry of Commerce of the People's Republic of China on the Export of Certain Chinese Textile and Clothing Products to the European Union. 12 June. http://europa.eu.int/comm/trade/issues/sectoral/industry/textile/memo100605_en.htm, accessed 13 June 2005.Google Scholar
European Commission 2005f. Statistics Covering the First Quarter of 2005, http://europa.eu.int/comm/trade/issues/respectrules/anti_dumping/stats.htm Google Scholar
Fagre, Nathan and Wells, Louis T. 1982. “Bargaining Power of Multinationals and Host Governments.” Journal of International Business Studies 13 (2): 9–23.Google Scholar
Firn, D. 2003. “Hopes Rise that the Worst is Over.” Financial Times, Special Report on the Chemicals Industry, 10 September, p. 1.Google Scholar
Frynas, Jerdrzej George and Mellahi, Kamel. 2003. “Political Risks as Firm-Specific (Dis)Advantages: Evidence on Transnational Oil Firms in Nigeria.” Thunderbird International Business Review 45 (5): 541–566.CrossRefGoogle Scholar
Greenaway, David. 2004. “The Assessment: Firm-level Adjustment to Globalization”. Oxford Review of Economic Policy 20(3): 335–342.CrossRefGoogle Scholar
Green-Cowles, Maria. 1995. “Setting the Agenda for a New Europe: the ERT and EC 1992.” Journal of Common Market Studies 33 (4): 501–26.Google Scholar
Green-Cowles, Maria. 2001. “Who Writes the Rules of E-Commerce: A Case Study of the Global Business Dialogue on E-Commerce.” Policy Paper 14, American Institute for Contemporary German Studies.Google Scholar
Hanzl-Wei, Doris. 2004. “Enlargement and the Textiles, Clothing and Footwear Industry.” World Economy 27(6): 923–945.Google Scholar
Henisz, Witold J. and Zelner, Bennett A. 2005. “Legitimacy, Interest Group Pressures and Change in Emergent Institutions: The Case of Foreign Investors and Host Country Governments.” Academy of Management Review 30(2): 361–382.Google Scholar
Hertz, Noreena. 2002. The Silent Takeover: Global Capitalism and the Death of Democracy. London: Arrow Books.Google Scholar
Hoekman, Bernard and Kostecki, Michel. 2001. The Political Economy of the World Trading System: The WTO and Beyond. Oxford: Oxford University Press.Google Scholar
Hoekman, Bernard and Smarzynska Javorcik, Beata. 2004. “Policies Facilitating Firm Adjustment to Globalization.” Oxford Review of Economic Policy, 20(3): 457–473.Google Scholar
Hyvarinen, Antero. 2001. “The Changing Pattern of International Trade in Textiles and Clothing”, Geneva: International Trade Centre.Google Scholar
International Council of Chemical Associations. (2003). “Anti-Dumping in the Framework of the Doha Round”, position paper, Arlington, Virginia, June.Google Scholar
Kaplinsky, Robert. 1993. “TNCs in the Third World: Stability or Discontinuity?” in Eden, Loraine and Potter, Evan (eds.). Multinationals in the Global Political Economy, Basingstoke: Macmillan, 108–121.CrossRefGoogle Scholar
Krugman, Paul R. ed. 1986. Strategic Trade Policies and the New International Economics. Cambridge, MA: MIT Press.Google Scholar
Lawton, Thomas C. 1996. “Industrial Policy Partners: Explaining the European level Firm-Commission Interplay for Electronics.” Policy and Politics 24 (4): 425–36.Google Scholar
Lawton, Thomas C. 1997. Technology and the New Diplomacy: The Creation and Control of EC Industrial Policy for Semiconductors. Aldershot: Avebury.Google Scholar
Lawton, Thomas C. and McGuire, Steven M. 2001. “Supranational Governance and Corporate Strategy: The Emerging Role of the World Trade Organization.” International Business Review, 10 (2): 217–233.Google Scholar
Lawton, Thomas C. and McGuire, Steven M. 2002. “Constraining Choice: Exploring the Influence of WTO Regulation and Domestic Politics on US Trade Policy for Steel”. Academy of International Business, San Juan, Puerto Rico, June 28 – July 2.Google Scholar
Lawton, Thomas C. and McGuire, Steven M. 2003. “Governing the Electronic Market Space: Appraising the Apparent Global Consensus on E-Commerce Self-Regulation.” Management International Review 42 (1): 51–71.Google Scholar
Levy, David L. and Prakash, Aseem. (2003) “Bargains Old and New: Multinational Corporations in Global Governance.” Business and Politics 5 (2): 131–50.Google Scholar
Liu, Xiang and Vandenbussche, Hylke. 2002. “European Union Anti-Dumping Cases Against China: An Overview and Future Prospects with Respect to China's World Trade Organization Membership.” Journal of World Trade 36 (6): 1125–1144.Google Scholar
Makino, Shige, Isobe, Takehiko and Chan, Christine M. 2004. “Does Country Matter?” Strategic Management Journal, 25 (10): 1027–1043.Google Scholar
Mayer, Brown, Rowe & Maw. 2002. Annual Anti-Dumping Report, London.Google Scholar
McGuire, Steven M. 1999. “Trade Tools: Holding the Fort or Declaring Open House?” In Lawton, Thomas C. (ed.) European Industrial Policy and Competitiveness: Concepts and Instruments. Basingstoke: Macmillan, 72–92.Google Scholar
Messerlin, Patrick. 2001. Measuring the Costs of Protection in Europe: European Commercial Policy in the 2000s. Washington: Institute for International Economics.Google Scholar
Milner, Helen V. and Yoffie, David. 1989. “Between Free Trade and Protectionism: Strategic Trade Policy and a Theory of Corporate Trade Demands.” International Organization 43 (2): 239–272.Google Scholar
Murmann, Johann Peter. 2002. “Chemical Industries After 1850.” Oxford Encyclopaedia of Economic History, Oxford: Oxford University Press.Google Scholar
Murmann, Johann Peter. 2000. “Knowledge and Competitive Advantage in the Synthetic Dye Industry, 1850–1914.” Enterprise and Society 1: 699–704.Google Scholar
Nordas, Hildegunn Kyvik. 2004. “The Global Textile and Clothing Industry post the Agreement on Textiles and Clothing”, Geneva: WTO publications.Google Scholar
Olson, Mancur. 1965. The Logic of Collective Action. Cambridge, MA: Harvard University Press.Google Scholar
Ostry, Sylvia. 1990. Governments and Corporations in a Shrinking World: Trade and Innovation Policies in the United States, Europe, and Japan. New York/London: Council on Foreign Relations.Google Scholar
Richardson, Jeremy J. and Jordan, Andrew G. 1979. Governing Under Pressure: The Policy Process in a Post-Parliamentary Democracy. Oxford: Martin Robertson.Google Scholar
Sell, Susan. 2000. “Big Business and the New Trade Agreements: The Future of the WTO?” In Stubbs, Richard and Underhill, Geoffrey (eds.). Political Economy and the Changing Global Order. Oxford: Oxford University Press.Google Scholar
Smith, Michael. 2004. “The European Union as a Trade Policy Actor.” In Hocking, Brian and McGuire, Steven (eds.). Trade Politics, 2nd edition. London: Routledge, 289–303.Google Scholar
Spar, Debra. 2001. Pirates, Prophets and Pioneers. London: Random House.Google Scholar
Stevenson, Cliff and Fillippi, Ilaria. 2005. Global Trade Protection Report: Update 2004, London: Mayer, Brown, Rowe and Maw, January 2005.Google Scholar
Stopford, John and Strange, Susan. 1991. Rival States, Rival Firms: Competition for World Market Share. Cambridge: University of Cambridge Press.Google Scholar
Strange, Roger and Newton, James. 2004. “China, the WTO and the Agreement on Textiles and Clothing”, in Katrak, H. and Strange, R. (eds.). The WTO and Developing Countries. Basingstoke: Palgrave, 233–256.Google Scholar
Streeck, Wolfgang and Schmitter, Philippe (eds.) 1984. Private Interest Government: Beyond Market and State. London: Sage.Google Scholar
Tyson, Laura D. 1993. Who's Bashing Whom? Trade Conflict in High-Technology Industries. Washington DC: Institute for International Economics.Google Scholar
Vernon, Raymond. 1971. Sovereignty at Bay. New York: Basic Books.Google Scholar
Weiss, Linda. 2003. “Global Governance and National Strategies: How States Make Room Under the WTO,” address presented at the conference, Policy and Politics in a Globalising World, Bristol, July.Google Scholar
Weber, Steven and Zysman, John. 1992. “Europe's Emergence as a Global Protagonist”, in Sandholtz, Wayne, Borrus, Michael, Zysman, John, Conca, Kenneth, Stowsky, Jay, Vogel, Steven and Weber, Steven. 1992. The Highest Stakes: The Economic Foundations of the Next Security System. New York/Oxford: Oxford University Press.Google Scholar
WTO. 2000. “Seven Common Misunderstandings about the WTO.” In Lechner, F.J. and Boli, John, The Globalization Reader. Oxford: Blackwell.Google Scholar
WTO. 2004. Trade Policy Review of the European Communities, Geneva: WTO, October.Google Scholar
Yoffie, David B. 1988. “How An Industry Builds Political Advantage.” Harvard Business Review 3, May/June: 82–89.Google Scholar