Abstract:
Shortly after the creation of the European Economic Community
(EEC, 1958), European countries accepted a far-reaching liberalization
of their previously fairly protectionist external trade relations.
I provide an explanation of this astonishing development that
builds on the argument that the establishment of a customs union
increases the bargaining power of its member countries in international
trade negotiations. When facing discrimination from a customs
union, exporters in excluded countries have an incentive to become
politically active and lobby their governments for relief. This
increase in exporter lobbying, in turn, weakens the negotiating
position of excluded countries in international trade negotiations
by making them more eager to achieve a negotiated agreement that
lowers the external barriers of the customs union. The evidence
presented backs this argument by showing that the EEC member
countries accepted external trade liberalization in the 1960s
because they could gain disproportionate concessions for European
exporting interests in international trade negotiations.
Key Words: EU trade policy • European integration • Kennedy
Round • power • trade liberalization
