THIS IS THE AUTHORS’ Final version, not the publisher’s published version in Current

Politics and Economics of Europe Vol. 18, no.3 (2007), pp.335-51.

PRIVATIZING COMMERCIAL DIPLOMACY: INSTITUTIONAL INNOVATION AT

THE DOMESTIC-INTERNATIONAL FRONTIER

Richard Sherman*

Department of Political Science

Leiden University

Wassenaarseweg 52 / Postbus 9555

2333 AK Leiden

The Netherlands

rsherman@fsw.leidenuniv.nl

Johan Eliasson

Department of Political Science

East Stroudsburg University

USA

jeliasso@esu.edu

*Corresponding author

2

ABSTRACT

New institutional arrangements in the United States and the European Union

provide firms and industry associations with increasing access to decision-making

procedures over trade disputes, trade negotiations, and regulatory reform. Private-sector

actors can petition for the initiation of trade disputes, propose agenda items for

multilateral negotiations in the World Trade Organization, and even conduct

negotiations on regulatory reform outside the customary state-to-state channels. These

institutional innovations include the United States' Section 301, the European Union's

Trade Barriers Regulation, formal consultation processes surrounding WTO

negotiations, and private-sector associations such as the Transatlantic Business

Dialogue. While reshaping the international politics of trade policy, these mechanisms

of “privatized” commercial diplomacy also raise questions about the proper balance of

influence between business and other sectoral interest groups. We examine these

institutional developments, focusing on their origins, their pattern of use by governments

and industry, and government responses to private-sector policy demands. We also

assess the theoretical and normative implications of formalized private-sector influence

on commercial diplomacy.

3

To say that the European Union and the United States are important economic

actors is not only to state the obvious, but indeed to understate it. Together the two

account for half of global GDP and 40% of world trade. Looking at the bilateral

relationship between the two economies, 20% of all EU imports are from the US and

24% of all EU exports head across the Atlantic; corresponding figures for the US are

18% and 23%. Each is the main source and the main recipient of the other’s foreign

direct investment.1 At the level of global political economy, the two are also the driving

forces behind political developments in trade policy, both through negotiations in the

World Trade Organization (WTO) and through the political processes by which their

own rules and decisions are made.

These political processes, and with them the commercial diplomacy of both the

US and the EU, are undergoing a gradual process of privatization. The story of

“privatized” diplomacy begins with Section 301 of the US Trade Act of 1974,2 which

provided a mechanism for private parties to petition for the initiation of interstate

negotiations intended to reduce foreign barriers to US exports. While the American

initiative was initially easy to dismiss as a mere outward projection of protectionism, it

has since served as a model for European mirror legislation in the form of the Trade

Barriers Regulation3 (TBR), through which private parties can petition the European

Commission to initiate negotiations with foreign states over barriers to European Union

(EU) exports.

4

Trade negotiators on both sides of the Atlantic have developed mechanisms for

consultation with industry; the EU also conducts formal consultations with civil-society

groups. Representatives of the World Wildlife Fund and the European employers’

association UNICE attend WTO negotiations alongside EU Commission officials,

bearing EU accreditation.4 The Transatlantic Business Dialogue (TABD), itself an

initiative of the late US Commerce Secretary Ron Brown,5 is a group of chief executive

officers of American and European multinationals that began conducting private

(company-to-company) negotiations on trade liberalization and regulatory reform in

1995 with the blessing of their respective governments. Since then the TABD has

developed extensive ties with trade and regulatory authorities, submitted annual lists of

proposals for trade-related regulatory reforms, and held biennial meetings attended by

US and EU officials. This “dialogue” model is being replicated in other international

arrangements, including the Asia-Pacific Economic Cooperation Forum (APEC) and the

discussion over the Free-Trade Area of the Americas (FTAA).

Here, we explore these movements toward “privatized” commercial diplomacy

with a view toward comparing the American and European experiences, uncovering the

causal forces behind privatization, and assessing the consequences of the growing formal

influence of industry on transatlantic trade policy. We present evidence drawn from a

data set on Section 301, the TBR, WTO disputes, as well as interviews with EU

Commission officials and leading members of the TABD and other business

associations.6 Since the close business-government ties represented by the institutions of

5

privatized commercial diplomacy have raised some controversy, we also explore some

of the relevant normative issues.

Section 301 has been examined in a number of studies, including legal/normative

analyses (Hudec, 1990; Bhagwati, 1990; Abbott, 1996) and political-economy-theoretic

studies (Ryan 1995; Noland 1997; Sherman 2002; Elliott & Richardson 1997; Bayard &

Elliott 1994; Zeng 2003). The TBR has been studied from the point of view of political

economy (Garcia 1999) and international law (Bronckers & McNelis 2001; Lalumière

2002), and the TABD has been the focus of research on changing patterns of interest-

group representation in Europe (Cowles 2000; Cowles 2001; Devereaux, Lawrence, &

Watkins 2003). The novelty and value-added of our research is that we consider these

institutional developments together as elements of a move toward institutionalization of

private-sector influence on trade policy.

Theoretical and substantive significance

While industry influence on trade policy is far from novel, institutionalized

access of the type represented by Section 301, the TBR, and the TABD is a relatively

new and evidently growing phenomenon. Firms and industry associations in many

countries have long lobbied government for favorable trade and regulatory policy

changes and have benefited from access to petition-processes for “defensive”

(protectionist) measures such as anti-dumping, countervailing duties, and safeguards.

However, the petition processes under Section 301 and the TBR give industries access to

6

“offensive”, market-opening measures, and thus to the machinery of coercive diplomacy,

putting the state in the role of an international agent of domestic sectoral interests.

Together with formal processes in the US and the EU in which government consults

with industry groups on agenda items for multilateral trade negotiations, these

institutional innovations expand the variety of access points through which industry can

influence trade policy.

The European and American experiences of “privatized” diplomacy, while

exhibiting commonalities, also differ in a number of interesting respects. Not only is

there a greater frequency of use of 301 versus the TBR, but there are other differences

with direct effects on the structure and outcome of disputes. It is worth exploring the

origins of these differences in order to better understand the types of disputes that may

emerge and how they can be avoided or settled. This in turn relates to larger key

questions: Why do governments allow for and listen to private sector interests in trade

policy? How do social and economic interest groups respond? What are the

consequences for public policy?

The emergence of these new policy mechanisms compels us to reconsider

prominent theories linking domestic-level interests to international-level interactions. In

analyses of international or multilevel negotiations such as two-level games (Putnam

1988; Milner 1997) and liberal intergovernmentalism (Moravscik 1993, 1997), heads of

state initiate and seal agreements, leaving ratification to the legislatures. In this literature

the interests of societal groups are either incorporated in state preferences or

communicated to the legislature during the ratification process. However, in Section 301

7

and the TBR, following a broad legislative delegation of authority to an administrative

agency (the US Trade Representative in the US and the Directorate-General for Trade in

the EU), interest groups petition for initiation of negotiations, and administrative

agencies undertake negotiations without need for legislative ratification. Cases pursued

under 301 and the TBR are carried out in the shadow of, and frequently within, the

dispute settlement procedures of the World Trade Organization (WTO); in this respect

the two policy measures exhibit a richer and differently sequenced set of political

interactions than those customarily treated in the theoretical literature.

Finally, there are some normative issues to raise about privatized diplomacy,

above and beyond the claims of “aggressive unilateralism” and camouflaged

protectionism leveled, not unjustly, at Section 301 (Bhagwati, 1990). Watchdog groups

suspicious of industry influence have reviled the TABD as a subversion of democracy

(Ralph Nader's group Public Citizen has labeled it the “Tricky Alliance of Business

Dictators”).7 Hysteria aside, there is reason to ask how influential an organization

composed of chief executive officers of multinational corporations has become and is

likely to become, and whether there are countervailing tendencies that might offer a

similarly institutionalized means of interest-articulation to interest groups other than

business.

8

THE ORIGINS OF PRIVATIZED COMMERCIAL DIPLOMACY

Few myths are as powerful in political economy as the story of domestic

perseverance in the face of foreign guile. To say that this myth was exploited by

business interests in America in the 1970s overstates the case, since in the first instance

the notion was sufficiently embedded in popular consciousness to render needless an

ideological push by business, and in the second the political pressure for protection came

more loudly and clearly from the Democratic party and organized labor than from

Republicans and organized industry. One result was Section 301 of the 1974 Trade Act,

which authorized “any interested party” (in practice, firms and industry associations) to

lodge complaints with the Special Representative for Trade Negotiations (now US Trade

Representative (USTR)) against “unjustifiable or unreasonable” barriers to US exports.8

The provision called on the Special Representative to initiate negotiations with foreign

states to seek the elimination of such barriers, and it fortified the negotiations with

threats of tariffs or other retaliatory trade barriers.

Section 301 envisions two types of barriers—those that violate international

agreements (section 301-A cases) and those that, while not prohibited by treaty, are

“unreasonable or discriminatory” in the view of the USTR (section 301-B cases). In

Section 301-A cases, retaliation is mandatory unless negotiations with the target state

prove satisfactory; in 301-B cases retaliation is at the discretion of the USTR. The 1984

Trade and Tariff Act amended the provision to allow the US Trade Representative to

undertake investigations on its own initiative, and amendments in 1988 brought about

9

the so-called “Super 301” provision, which called upon the Trade Representative to

develop a priority list of countries that were effectively put on warning of impending

formal Section 301 action.9 Section 301 has been the basis for some 124 complaints

against foreign governments ranging from Guatemala to the European Union and from

South Africa to Canada. Issues covered in the disputes range from quotas and subsidies

to discriminatory taxation and intellectual property protection, and the industries in

question cover a diverse group including, e.g., textiles, satellite-launching services,

bananas, and pharmaceuticals.

The European Community responded In 1984 with its own petition process for

aggrieved exporters, the New Commercial Policy Instrument (NCPI). The NCPI

resembled Section 301 in that it allowed both violation and non-violation complaints.

Infrequently used, the NCPI was redrafted as the Trade Barriers Regulation and included

in the EU’s implementing legislation for the GATT Uruguay Round. After the measure

became law in 1995, the EU’s Directorate-General for Trade began an informational

campaign to encourage industry to make use of the new measure.10

Unlike both Section

301 and the NCPI, the TBR restricts complaints to those violating specific treaty

obligations and to multilateral agreements (violations of EU bilateral agreements are

handled under separate provisions).11

Since 1995 there have been 22 TBR cases, again

with a diverse range of target states, including (e.g.) Korea, Argentina, Japan, and the

United States, and a range of policy measures including subsidization, anti-dumping

rules, copyright protection, and discriminatory taxation. Industries covered include, e.g.,

cosmetics, wine and distilled spirits, musical recordings, and shipbuilding.

10

While the two sides have erected and institutionalized similar formal “offensive”

structures, there has been a concomitant evolution of joint steps to ease international

trade restrictions and improve bilateral political and economic cooperation. The 1990

Transatlantic Declaration laid down principles for cooperation and consultation on trade

liberalization and competition policy. In 1995 the New Transatlantic Agenda (NTA)

included a chapter on “Building Bridges Across the Atlantic,” addressing general and

specific means of liberalizing trade.

In 1998 the Transatlantic Economic Partnership (TEP) was established as an

extension of the NTA. One purpose of the TEP is to tackle technical barriers to bilateral

trade and “improve the effective access to the regulatory procedures of public authorities

by private interests”. Another is to stimulate multilateral trade liberalization by joining

forces on international trade issues, strengthening the modalities of WTO dispute

settlement procedures as well as international adherence to WTO rulings (Cowles 2000).

These and other similar bilateral initiatives are signs of conspicuous willingness on

behalf of the US government and the EU to work with the private sector, thus providing

the opportunity for private sector interests to be heard and in turn influence trade

regulations.

The TABD emerged as part of the NTA. It was the result of an effort by the late

US Commerce Secretary Ronald Brown to initiate regular meetings of chief executive

officers of American and European corporations to discuss trade-related issues including

regulatory reform. The TABD began meeting in 1995 and holds biennial meetings along

with ongoing activities of working groups organized by sector and policy area. The

11

TABD annually presents a list of “deliverables” to the EU and the American government

outlining its demands for policy changes. Much of the TABD's activity has concerned

efforts to promote mutual recognition of product standards, though it also issues

exhortatory calls for trade liberalization of a general nature, as well as proposals for

dispute resolution.

EXPERIENCE OF SECTION 301, THE TBR, AND THE TABD

Of these three institutional mechanisms, Section 301 has the longest history and

the most substantial track record. Though reviled by free-traders such as Bhagwati

(1990) as “aggressive unilateralism,” the measure has been viewed more favorably by

Hudec (1990), who considers it a type of “civil disobedience” within the poorly

functioning GATT dispute-settlement system. Ryan (1995) echoes this view by pointing

out that the implementation of Section 301 in the Pacific region has largely worked in

support of GATT (now WTO) rules.

While early Section 301 cases largely followed the “aggressive unilateralism”

model, with negotiations conducted bilaterally outside of the GATT system, most of the

301 cases since the mid-1980s have come under the GATT/WTO dispute-settlement

framework, if only at the consultation level. The measure has, with some exceptions,

become a de facto route for private interests to request initiation of proceedings under

the GATT/WTO dispute-settlement system. Section 301 in principle permits cases that

do not allege violation of an international treaty obligation, but in practice the cases

12

ordinarily (in the case of Section 301) or invariably (in the case of the TBR) cite specific

treaty provisions as their basis in law. Thirty-two of the one-hundred twenty Section

301 cases have ended up as formal disputes before the GATT/WTO, compared to nine of

the twenty-two TBR cases. Figure 1 shows the frequency of Section 301 and TBR cases

by year. Since 1995, there have been twenty-nine Section 301 cases and twenty-two

cases under the TBR.

Research on the political-economic determinants of Section 301 cases has

concluded that countries enjoying large trade surpluses with the United States are more

likely to be targeted (Noland, 1996), that countries with higher average tariffs are more

frequent targets (Noland, 1997) and that democratic states are more likely than non-

democracies to be targets (Sherman, 2001). Elliott & Richardson (1997) find that

“successful” outcomes in Section 301 cases (those resulting in greater concessions from

the target state) are more likely in countries with high trade dependence on the US and

with large bilateral trade surpluses; they also find that cases targeting border measures

(such as tariffs or quotas) have more successful outcomes than those involving non-

border measures (such as competition policy or intellectual-property protection). No

comparable research has been done on determinants of selection of targets or of

outcomes of TBR cases.

One objective of the research from which this paper is drawn is to conduct a

comparative quantitative study of industry-by-industry variation in the pattern of use of

Section 301 and the TBR. The aim is to get at questions similar to those posed in the

large literature on anti-dumping decisions: what effects do patterns in (e.g.)

13

employment, output, industry size, and industry concentration have on resort to the two

policy measures? Much is now known about the determinants of industry's resort to

protective measures, but there is no comparable quantitative analysis of industry-level

variation in resorting to the market-opening mechanisms of what we term privatized

diplomacy.

As a first step in this direction, we present in Figures 2 and 3 the sectoral

breakdown of cases under the TBR and Section 301 respectively. While not identical,

the two figures show a remarkable similarity across the two economies in the mix of

industries that have taken advantage of the dispute-petition processes. Industries that are

heavily protected worldwide (agriculture, textiles, footwear) make up large portions of

petitions in both the US and the EU. Intellectual property, an economic sector poorly

regulated under existing global trade rules, also accounts for a sizable share of dispute-

petitions in both economies. The remaining sectors read as a short list of the leading

industries in the US and EU; in other words, the "offensive" petition processes do not

appear to reflect merely an outward projection of protectionism in which "sunset"

industries seek government assistance as a last-ditch effort to prevail over more efficient

competitors overseas.

THE INITIATION PROCESS

The costs to a firm or industry association of filing a TBR case are near zero. As

a Commission official pointed out during an interview, the process does not require a

14

petitioner to employ legal counsel or to deploy any other specialized expertise; the

Commission conducts its own research on the case and hence is not heavily reliant on

economic or legal information provided by the petitioner. Still, Commission officials

express some surprise that the TBR is not used more frequently. One result of the

traditionally close ties between business and member-state governments is that the

“easy” cases –those involving relatively clear violations of treaty obligations by a

foreign state –bypass the TBR process altogether, going through national governments to

the Council of Ministers. TBR cases are in consequence frequently concerned with areas

of trade law that are less well-governed by precedent.

While Section 301 and the TBR share many similarities, some important

differences result from the intergovernmental nature of the EU. European firms and

industries have avenues for exerting influence with their national governments as well as

in Brussels. As Cowles (2001) notes, the “Europeanization” of business-government

relations is a relatively new phenomenon, with lobbying groups becoming particularly

active in Brussels only toward the end of the 1980s. Unlike many traditional ties

between member-state governments and businesses seeking market access abroad, the

TBR is a formal bureaucratic process carried out in the European Commission. The

availability of two tracks for industry to pursue—one at the member-state level and one

at the EU level–influences both the frequency of TBR cases and the substantive legal

content of the cases that emerge.

A degree of bureaucratic institution-building may be at work in the

Commission's desire to see the TBR used more widely. Lobbying of member states by

15

business, when successful, ordinarily bypasses the Commission and results in a decision

taken in the Council of Ministers. The TBR can be viewed as a means of replacing this

political processes with a bureaucratic one, enhancing the role of the Commission both

in internal relations with interest groups and external relations with foreign states.

Though the Commission has authority to decline to proceed with cases following a

petition, no case has been formally declined. In contrast, USTR declines to initiate

investigations on nearly 10% of Section 301 petitions.

Interviews with European business representatives, perhaps unsurprisingly,

depict a view of the TBR not altogether consistent with that held by Commission

officials. Business representatives describe the TBR as a cumbersome instrument,

requiring the transmission of volumes of sensitive information to DG-Trade and opening

the door to repeated and open-ended requests for additional data. Firm-level data

entrusted to DG-Trade in the context of a TBR investigation, according to some

interviewees, is at risk of ending up in the hands of regulatory authorities, notably, DG-

Competition, where it could be used to bring actions against the firms who provide it.

Justifiable or otherwise, these concerns on the part of industry may account for some of

DG-Trade's failure to turn the TBR into the instrument of first resort for firms facing

trade barriers in foreign markets.

TABD officials and European Commission officials involved in the TABD

process note that the different administrative structures in the US and the EU lead to

differences in implementation of TABD proposals for regulatory reform. As agencies of

an intergovernmental organization, EU-level bureaucracies are accustomed to working

16

both within and between states, and coordination among agencies across the various

Directorates-General means that regulations are vetted by the segments of the

bureaucracy responsible for relations with third states. American administrative

agencies, in contrast, have no international “mandate;” that is, their authorizing

legislation generally contains no provision for international coordination. This has

concrete implications, e.g., for the Mutual Recognition Agreement (MRA), championed

by the TABD and concluded between the US and the EU. In the US an outward-looking

bureaucracy such as the Federal Aviation Administration is accustomed to certifying the

airworthiness of imported aviation equipment on a bilateral (country-to-country) basis,

yet the inward-oriented Occupational Health and Safety Administration reviews

applications for certification of foreign testing laboratories on a facility-by-facility basis.

As a consequence the MRA has met with swifter implementation on the EU side.

Given the level of EU-US trade interdependence and bilateral public and private

sector initiatives to address, and redress, obstacles to trade, it could perhaps be expected

that more disputes would be settled bilaterally. Surprisingly, fewer than half of all 301

disputes against the EU resulted in an USTR termination following a negotiated

settlement; 9 cases ended in retaliatory US sanctions, while 10 disputes are still ongoing

(as of June 2004). The cases of retaliation include mostly food products, one of the

smallest industry groups of EU exports and imports. The ongoing cases are largely

concerned with non-border trade violations, chiefly antidumping and the food sector.

There is interesting suggestive evidence for a relationship between foreign direct

investment (FDI) and resort to the dispute-petition processes. Industrial sectors with the

17

largest FDI (Machinery and Vehicles, accounting for roughly 40%, and Iron and Steel

products, another 15%) are amongst the least likely to be subject to 301/TBR

investigations. There are several possible explanations. A high degree of FDI in an

industry means that many producers are multinationals, which may be less eager than

more nationally-focused firms to wield coercive measures to wrest open foreign markets.

At the same time the Food and Beverage sector is among the least likely to experience

antidumping investigations, while Machinery and Equipment, Motor Vehicles, and Iron

and Steel Products, the largest groups of FDI into the US, dominate anti-dumping

investigations (60% of all antidumping cases, 70% of all cases involving the EU, and

59% of all cases against Japan). In this respect the principal defensive trade measures

are used extensively by a different set of industries than the principal offensive

measures. Furthermore, as Elliott and Richardson (1997) show, industries with border

measures such as tariffs and quotas (e.g., agriculture) are more likely to be targeted, and

targeted successfully (for the plaintiff) under Section 301. The EU also has large trade

surpluses with the US (as does Japan) and consists of stable democracies, supporting for

Nolan (1997) and Sherman’s (2002) previous findings.

THEORETICAL AND NORMATIVE CONSIDERATIONS

The emergence of "privatized" commercial diplomacy bears interesting

relationships to recent currents in international relations theory, which is increasingly

18

concerned with the link between domestic-level political processes and inter-state

negotiations. Moravscik's (1997) reformulated liberal theory of international politics

takes societal preferences as primitive and state preferences as derivative. International

bargains are then driven by the preferences of states, which ultimately represent sectoral

interests in society. Section 301 and the TBR are interesting in part because they are real

embodiments of this theoretical idea. The TABD takes this logic one step further by

engaging interest groups at the international level, in effect doing some of the work of

interstate negotiators by staking out areas of agreement among influential sectors in

multiple countries. Contrary to the conventional approach taken by two-level game

theory (Putnam 1988; Milner 1997), interest groups rather than heads of government

take initiative in proposing negotiated outcomes, and in many instances the key

interlocutors between domestic interests and governments in international bargaining are

not legislatures but executive agencies themselves.

More generally, the issues raised by privatized commercial diplomacy can be

viewed as problems of agency. The state is a notional agent of society, a notion that

raises a nest of questions regarding what "society" is, how its various demands should be

aggregated, etc. From a narrow perspective, the dispute-petition processes can be seen

as a simple restoration of balance to the state's attentiveness to two types of demands:

those for trade protection, and those for trade promotion. Given that protectionists have

long had available petition processes to seek relief from import competition, the dispute-

petition processes level the playing field somewhat by giving comparable access to

export-oriented producers.

19

More macroscopically, privatized diplomacy is an instance of what is known in

agency theory as "relying on the information of an interested party," and it is this that

inspires criticism from anti-globalization groups. If international corporate negotiation

forums such as the TABD acted simply as the joint command of a global capitalist class

authorized by government to liberate itself from regulation, there would be little indeed

to recommend them. This scenario is however a significant overstatement of the

TABD's scope for action. The TABD has presented the EU and the US administration

with several initiatives to prevent trade disputes, as well as proposals on how to solve

potential conflicts (TABD, 2002b, pp.7-9.). Some of these initiatives, such as the

TABD’s Guidelines on Regulatory Co-operation, have been adopted by the US and EU

(TABD, 2002a), while others are being examined (e.g. an “Early Warning System”).

Comparatively little of the group's activity has been directed toward deregulation, the

greatest part of its effort directed toward the reduction of regulatory duplication.

Still, even the relatively low-hanging fruit represented by the Mutual Recognition

Agreement has not been fully implemented. When asked about the TABD's

achievements in the regulatory area, both TABD officials and European Commission

officials begin with general statements of the group's importance; as practical evidence,

however, they offer only the Mutual Recognition Agreement and an indefinite

postponement of the EU's proposed metric-only labeling requirement.

The TABD would appear to have naturally built–in limitations on its potential

reach. As a cross-sector and transatlantic industry lobbying group, the range of its

opportunities for consensus within the group are significantly smaller than in, say, a

20

national industry confederation or a single-sector industry association. What states are

able to do, assign benefits and costs across industries with policy choices in which some

industries win and others lose, the TABD itself is institutionally constrained from doing.

As in political economy generally, though, organized interests seem to find a

way. The "dialogue" model that was originally developed to allow privileged access for

international business interests now has a formal counterpart in the Transatlantic

Consumer Dialogue, an organization composed of consumer-advocacy groups in the

United States and Europe (TACD, nd). The EU also conducts official public "dialogues"

with labor and environmental groups, and non-governmental organizations (albeit still

principally industry associations) now participate formally in WTO ministerial

conferences. It may ultimately emerge that business's "foot in the door" was, in

retrospect, also the "camel's nose in the tent" for broader segments of civil society to

gain access to international commercial diplomacy.

21

Figure 1. Section 301 cases and Trade Barriers Regulation cases by year

Figure 2: Trade Barriers Regulation cases by industry, 1984-2004 (includes New Commercial Policy Instrument)

Food, beverages, and tobacco

Textiles, leather, and footwear

Intellectual property

Other

Auto parts and motor vehicles

Pharmaceuticals

Aircraft

Chemicals

Iron and steel products

Other

Shipbuilding

23

Figure 3: Section 301 Cases by Industry, 1975-2004

Food, beverages, and tobacco

Intellectual property

Other

Textiles, leather, and f ootw ear

Auto parts and motor vehicles

Media

Other high-tech

Chemicals

Forest products

Insurance

Iron and steel products

Other

Shipping

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1 61% of all FDI into the EU is American, and 51% of FDI into the US stems from the

EU (Eurostat 2002; US Census Bureau 2003).

2 Public Law 93-618; 19 U.S.C. § 2411.

3 Council Regulation 3286/94.

4 Interview, EU Commission Official, 20 June 2002.

5 See Trans-Atlantic Business Dialogue (n.d.); Cowles, 2001:161.

6 The research here is part of a larger research project for which interviews and data

collection are ongoing. The interviews referred to here were semi-structured interviews

conducted during summer 2002 and 2003. Since interviewees were assured of

anonymity, they are referred to by date and institutional location.

29

7 See, e.g., Public Citizen (n.d.), which describes the TABD as “perhaps the most extreme

example of ‘corporate rule,’ because it is an organization specifically designed to

‘privatize’ public policy decision-making and put it in the hands of big business,” and

Corporate Europe Observer (1999), which argues that “the politicians responsible for this

corporate-state alliance act on the absurd, harmful and deeply undemocratic premise that

corporate priorities should be the basis of trade policies and political decision-making in

general.”

8 For background on Section 301, see Bayard & Elliott (1994).

9 Parallel procedures for intellectual property (“Special 301”) and telecommunications

(“Telecommunications 301”, or Section 1377) were also introduced in the 1988

amendments to Section 301 in the Omnibus Trade and Competitiveness Act of 1988

(Public Law 100-148). The Super 301 provision lapsed in 2001 and has not been

renewed.

10 Interview, EU Commission official, 26 June 2002.

11 On the TBR, see Bronckers & McNelis, 2001; Garcia, 1999.