National Interest and Environmental Politics: The United States and Europe
By Marcus Schaper

Conflicts between trade and environmental concerns are becoming increasingly salient. Genetically Modified Organisms (GMOs), bananas, hormones in beef, global climate change, and steel have all proven their potential to create transatlantic conflict.

Many conflicts over environmental issues are of a different nature than global environmental summitry: they require harmonization of domestic regulations, which are negotiated among governments (often at the staff level) and do not require ratification by legislatures. Put differently, these transatlantic environmental disputes are not about international treaties addressing the global commons, such as the Kyoto protocol, but about different domestic approaches to regulating a certain issue area, and they require substantial concessions by the party that needs to change its domestic regulations as a result.

Where domestic regulations need to be harmonized--as in the case of GMOs, chemicals policy, and environmental standards for export credit agencies--the level of conflict depends partially on whether domestic regulations are in place. When both the United States and Europe have regulations on the books or have already sketched out their own regulatory regime before engaging in talks, then a high level of conflict is almost certain, as can be witnessed in the cases of GMO regulation and chemicals policy. If, however, regulation does not pre-exist on one or both sides, then the party with its regulatory regime not yet in place is much more likely to take cues from the other side. Creating new regulations is much easier and can be much more innovative than revising existing rules. In addition, the first party to put a given issue on the transatlantic agenda often has the first-mover advantage and is able to influence the outcome of harmonization. The United States is often the first mover, especially when it seeks to internationalize its domestic regulations.

The consequence is that many international environmental agreements are shaped using U.S. regulations as a model. Europeans either acquiesce to the rules proposed by the United States or they define their position in reaction to the United States. In the rare instances where the Europeans actually manage to agree on a common response to U.S. proposals, they can have a decisive impact on the emerging agreement. Most of the time, however, European states do not speak with one voice and thus no substantial challenge to U.S. proposals arises.

Conversely, in the even rarer instances of European-led initiatives, the United States has only limited influence on the outcome if it does not have the first-mover advantage on its side. Since it takes much coordination for European states or the EU as a whole to agree on a joint position, once a position has been defined, this position is resilient to change. The regulation of GMOs is a rare case in which the Europeans managed to set a marker for the United States to react to. Here the Europeans managed to define their own regulatory framework for GMOs based on the precautionary principle and consumer protection as the guiding policy concerns. These regulations are fundamentally at odds with the U.S. approach of treating modified organisms under established rules developed for traditional varieties. As it became clear that negotiations on a common regulatory framework would not meet U.S. expectations, taking the matter to the WTO was the only hope for the United States to modify the EU position.

GMOs are the exception to the rule. Usually a U.S. initiative is met either with a joint European response or--more commonly--with many uncoordinated responses. These policy responses tend to be formulated in reaction to the U.S. proposal and thus are limited in scope. Only when Europeans manage to formulate a common response does a serious challenge to the U.S. proposal exist. Otherwise, the United States can divide and rule.

Negotiations over the Common Approaches--an agreement to establish environmental standards for Export Credit Agencies--may serve as a good example. Initiated by the United States in 1995, the negotiations resulted in an agreement in 2003 that mostly reflected strict domestic U.S. environmental policies for the U.S. Export-Import Bank. Now all major Export Credit Agencies must follow similar environmental review procedures as the Export-Import Bank, and they also must make environmental assessments available to the public before making a support decision despite poor institutional fit of these measures in their own regulatory contexts. The United States was able to shape that agreement on its own terms because European opposition was divided and U.S. negotiators could form alliances with individual European states, undermining a joint European position.

How can this source of transatlantic conflict be managed? The challenge is to develop policy initiatives that are not bound to fail by design. Proposals that are more compatible with the other side's political and institutional frameworks are not only likely to be more effective but they also help to reduce transatlantic strife over conflicts that need not exist. What is needed is willingness by both parties to take the interests and considerations of the other into account. The initiator, in particular, needs to consider how his proposal would fit with the domestic institutional frameworks of the other parties. So far, we have not seen more open conflict because the Europeans have generally been more open to U.S. policy initiatives that challenge their domestic institutions (such as transparency provisions in the OECD Anti-Bribery Convention and the Common Approaches) than the United States has been to European policy ideas like the precautionary principle. As long as the United States almost exclusively determined the transatlantic agenda, this did not cause much trouble. However, with a more assertive Europe framing issues on its terms, more attention to the other side's interests and limits is needed.

With misperceived policy intention--like the U.S. charge that European GMO policies only serve to shield the EU agricultural market from competition--playing a major role in these controversies, a better understanding of not only the other side's politics but also of its domestic regulatory regimes in the contested policy areas is a prerequisite to avoiding these conflicts.

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Marcus Schaper is a DAAD/AICGS Fellow and a Doctoral Candidate in the Department of Government and Politics at the University of Maryland.

This essay appeared in the July 15, 2004 AICGS Advisor.

The views expressed in this article are those of the author(s) alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies.