A Conflict of Institutions: The WTO and EU Agricultural Policy

Europe has long defied GATT/WTO rules on agricultural trade during adjudication of trade disputes, but agreed to major reforms of its agricultural policies in the Uruguay Round. Such variation in liberalization outcomes raises questions about when nations will delegate to international institutions and how EU institutions influence its trade policy. This paper focuses on the policy process to examine how EU institutions interact with the institutions of the negotiation structure to influence liberalization outcomes in the sensitive area of agricultural trade. The main finding is that EU institutions are responsive to institutional strategies that broaden the agenda, such as issue linkage, but reduce the effectiveness of institutional strategies that narrow the agenda, such as international legal pressure. Case study analysis of the Uruguay Round reveals that a credible issue linkage overcame the bias favoring agricultural interests within European institutions by changing the aggregation of interests and policy-making venue. However, the EU refusal to follow the WTO ruling against its beef hormone import ban illustrates how legalized dispute settlement encounters problems within the EU institutional context. European-level politics diffuses responsibility among nations and different institutions, and thereby reduces concern for reputational harm from violation rulings. For agricultural policy issues, the actors, interests, and processes within the EU block isolated policy changes on sensitive issues. While issue linkage broadens the policy agenda to counter EU institutional deadlock on agricultural policy, legalistic strategies narrow the policy agenda and clash with the EU institutions.