A Preliminary Analysis of Competition for Trade Liberalization between the EC/EU and EFTA
Author：Wei-Feng Huang, Associate Research Fellow
The concept of “competitive liberalization” may seem like something that had only emerged recently; however, competition for trade liberalization between the EC/EU and the European Free Trade Association (EFTA) had been around since the end of World War II. In the past, the main focus had been on “competitive liberalization” between the EC/EU and the United States, but very little attention was paid to the competitive pressure the EC/EU trade liberalization had given the EFTA. What exactly are the prominent characteristics that increased the likelihood of the EFTA signing free trade agreements (FTA) with other countries? Is the phenomenon of competitive pressure an occurrence after the 1990s? Are there external and internal factors that pushed the EFTA to seek bilateral FTAs with third countries?
In view of this, to make up for the shortcomings of existing studies on this subject, this paper attempts to explore the complete context of the competitive relationship between the EC/EU and the EFTA. By analyzing the covariations of objective long-term trade data and the subjective 1960-2002 EFTA Council records, this paper constructs a statistical quantitative model. Furthermore, this paper examines the factors affecting the EC/EU trade liberalization and the factors influencing the EFTA when signing FTA with other countries.