PROTECTION IN THE FACE OF A TRADE WAR: INFLUENCES AND DECISION MAKING IN THE EU-CHINA SOLAR PANEL ANTI-DUMPING CASE

Abstract

Unlike the typical liberal, non-protectionist outcomes of European Union (EU) antidumping cases featuring a powerful free-trade lobby group, weak producer industry group, and fierce member state backlash, the EU-China solar panel anti-dumping case strangely featured protectionist outcomes. This thesis explores the influences behind the European Commission’s decision to supply protection in the EU-China solar panel case. The mainstream literature claims that the European Commission forms its trade policy according to member states’ positions and in pursuit of political goals that can be achieved by reflecting the interests of politically powerful domestic lobby groups within the institutional constraints. However, this thesis argues that the EU Trade Commissioner’s decision to supply protection in this case is the result of a foreign policy goal: gaining leverage over China and his strategies for achieving this goal. Leverage in this case is the pursuit of the ability to influence China to reform its trade practices. The thesis suggests that the Trade Commissioner practiced two strategies in pursuit of this goal: using individual anti-dumping cases as a means to achieve leverage and pursuing trade defense instrument reform legislation. Because of issue linkage between the trade defense instrument reform legislation and individual anti-dumping cases and the member states’ and European Parliament’s ability to block trade legislation, the Commissioner’s decisions in the solar panel case reflect the choice that maximizes his leverage over China, given the constraints imposed by his need to adhere to the member states’ and European Parliament’s case-specific demands in order to pass his trade defense instrument reform legislation. Primarily using a method of process tracing, this thesis analyzes the outcomes at each stage of the solar panel case to show that the Commission’s pursuit of leverage with China explains the unintuitive protectionist outcomes. Additional tests of comparisons to other EU anti-dumping cases and a supplementary case study support this finding. Adding to the underdeveloped literature on the supply of protection in the European Union, this thesis contributes an alternative lens with which to view a policymaker’s motives for supplying protection in anti-dumping cases. Foreign policy goals may need to be considered in addition to the traditional influences on anti-dumping policies. The implications of how the current Commission’s goals towards China affect its actions in China-specific anti-dumping cases apply to member state governments, domestic lobby groups, and China. Increased engagement with the European Parliament may be necessary in order for these players to successfully influence the policy outcome.