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Think tanks and foreign policy
- A qualitative analysis of the United States and the European Union
divergent trade policies vis-à-vis China –
Marine Leleux S2582023 Leiden University
Master Thesis
M.Sc. Public Administration - Economics and Governance Faculty of Governance and Global Affairs
Supervisor: Vasileios Karakasis Second Reader: Johan Christensen
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Table of Content
1. INTRODUCTION ... 5 1.1. CONTEXT... 5 1.2. SOCIETAL RELEVANCE ... 8 1.3. ACADEMIC RELEVANCE ... 9 1.3.1. Theoretical Framework ... 10 1.3.2. Methodological Design... 11 1.4. STRUCTURE ... 11 2. THEORETICAL FRAMEWORK ... 12 2.1. INTRODUCTION ... 12 2.2. LITERATURE REVIEW ... 122.2.1. International Relations Theories ... 12
2.2.2. Locational Model ... 14
2.2.3. Kingdon’s Model ... 15
2.3. EXTERNALIZATION AND POLITICIZATION MODEL... 16
2.4. HYPOTHESES ... 20
3. METHODOLOGY... 22
3.1. INTRODUCTION ... 22
3.2. DATA COLLECTION AND ANALYSIS ... 22
3.2.1. Method of Data Collection ... 22
3.2.2. Method of Data Analysis ... 27
3.3. OPERATIONALIZATION ... 27 3.4. LIMITATIONS ... 28 4. ANALYSIS ... 30 4.1. INTRODUCTION ... 30 4.2. CONTEXTUALIZATION ... 30 4.3. EXTERNALIZATION ... 31 4.3.1. US Qualitative Analysis ... 32 4.3.2. EU Qualitative Analysis ... 41 4.4. POLITICIZATION ... 50 4.4.1. US Qualitative Analysis ... 50 4.4.2. EU Qualitative Analysis ... 53 4.5. RESULTS DISCUSSION ... 54 5. CONCLUSION... 57 5.1. RESULTS SUMMARY ... 57 5.2. LIMITATIONS ... 58 5.3. SUGGESTIONS ... 59 6. BIBLIOGRAPHY ... 60 7. APPENDIX ... 70
7.1. US THINK TANKS REPORTS TABLE ... 70
7.2. US TRADE POLICIES TABLE ... 79
7.3. EU THINK TANKS REPORTS TABLE... 82
4 Abbreviations:
- BIT: Bilateral Investment Treaty - B & R: Belt and Road Initiative - CAP: Center for American Progress - CEPS: Centre for European Policy Study
- CSIS: Center for Strategic and International Studies - EAC: EU-Asia Centre
- ECFR: European Council on Foreign Relations
- ECIPE: European Centre for International Political Economy - EIAS: European Institute for Asian Studies
- EU: The European Union - GDP: Gross Domestic Product - IP: Intellectual Property - MES: Market Economy Status
- OECD: Organization for Economic Cooperation and Development - PAS: Political Advisory System
- TEPSA: Trans-European Policy Study Association - TPP: Trans-Pacific Partnership
- UK: The United Kingdom
- US: The United States of America - WTO: The World Trade Organization
5 1. Introduction
1.1. Context
On March 23, 2018, the US president Donald Trump imposed tariffs on all steel and aluminum imports (Bown 2019). Although not directed toward one specificcountry, these tariffs are mainly impacting Chinese exports and are the result of two years of anti-trade and anti-Chinese rhetoric. Indeed, the 2016 United States presidential election has been shaped by a prominent view of Chinese trade and cooperation as inherently destructive for the American economy with statements such as “We can’t continue to allow China to rape our country” (Rosenfeld 2016). Trump’s election on November 8, 2016, raised questions on future Sino-American relations fearing for a trade war. After a relatively calm year and a successful visit to Beijing (Corera 2017), the US government initiated a new, more bellicose relation both by suing China via the World Trade Organization (through the official complaints mechanism) and imposing direct, unilateral import tariffs. Just as experts feared, the relation between the two superpowers kept worsening with growing tariffs from both sides and on all types of goods. Hence, US tariffs against Chinese goods grew from 3.1% to 21% at their highest point (Bown 2019). China retaliated with an equivalent rise of 13.1 percentage points going from 8% to 21.1% (Bown 2019). Even if revenues of these offensive policies for the US government are approximated to 79 billion dollars, costs are expected to negatively impact the American economy on the long run with a reduction in gross domestic product (GDP) of 0.23 and losing the equivalent of 179’800 full-time jobs (York 2019).
Far from going back to their initial point, in February 2020 both countries did a step toward one another with the first phase of a deal reducing current tariffs and limiting prospective ones. Figure 1 shows the evolution of US tariffs over time as much as the Chinese response (Bown 2019). It allows to see the slight tariff reduction since the beginning of 2020 and the overall increase since the beginning of the trade war.
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At the same time, on the other side of the Atlantic, the European Commission reasserted in a message to its Parliament and Council, the willingness to reinforce relations between China and the European Union (European Commission 2016a). The vision brought by the commission emphasizes greater cooperation with Beijing, prioritizing investments with the negotiation of a comprehensive agreement. They also confirmed the willingness to develop mutual gains from trade and respect of the rule of law. To do so, both parties are willing to use international organization like the WTO to conclude deals and get rid of potential tensions (European Commission 2016a). Although the EU acknowledges the country’s major human rights violations and disregard to intellectual property, it emphasizes the importance of developing relations with what is now the most important economic power in the world. Therefore, China is pictured as a still growing economy capable and willing to change from a state-dominated to a market-based system from which cooperation is in everyone’s profit.
Hence, a major difference between the EU and the US policies toward China since 2018 is identifiable. The gap in their position is unprecedented, especially if we consider that they constitute two historical allies and that the third party is now the first economic power in the world. The change also appears in the position of the past economic leader being now
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only the 3rd exporter (The Observatory of Economic Complexity 2019). With the 45th president claiming to be a “Tariff Man” (Krugman 2019) elected on the now famous “America First” principle, the United States converted vague promises of returning to protectionism to concrete measures. Indeed, the withdrawal from the Trans-Pacific agreements in 2017 (Taylor 2018) marks the first step against multilateralism which was followed by the withdrawal from the Paris agreement and numerous attacks to the WTO (Elliott 2020). Overall, the country is clearly turning its back on free trade and international organizations to increase protectionism and nationalism. Europe, on the other hand, is more than ever, investing and increasing its support to international organizations and multilateralism. We are therefore facing the three most important economic power having a widely different approach to one another.
As all economic indicators show the need for an increased cooperation between countries both for a sustainable growth and to face unprecedented challenges in the future, we can ask why we are currently facing divergent strategies between major allies. What is the process of policy-making behind such divergences?
To answer such questions, one would look at international forces stimulating national decisions toward possible agreements. The literature on trade agreements and trade wars is exclusively focused on the economic incentives behind such relations. Thus, the main theoretical justification to international trade is “gains of trade.” These explanations are ignoring the complex mechanisms shaping political decisions by considering states and organization as monolithic unitary actors. They emphasize policy-making as a top-down process with leaders sitting atop and implementing policies resulting from a cost-benefit analysis of trade imperative. This simplistic approach neglects the ideational factors that may underpin such decisions. These actors are influenced by national institutions decoding the international trade environment and facilitate their decision-making. They come in various shapes and types. The concept of public advisory system is often used to represent the variety of actors influencing policy-makers. It can be described as:
“An interlocking set of actors, with a unique configuration in each sector and jurisdiction who provided information, knowledge and recommendations for action to policy-makers (Hustedt and Veit 2017, 42).”
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The concept includes think tanks, public managers and lobbying groups (Craft and Howlett 2012). Think tanks are often cited as being the link between citizen’s opinion (in particular scholars) and government policies. They can be defined as:
“A handful of people involved actively in studying a particular policy area who seek to inform and educate policy-makers and the public through a variety of channels” (Abelson and Carberry 1998, 529).
With the great multiplication of these institutions over the last decade, not only in the US but all over the world, the literature focusing on their role and impact on policy-making have proliferated. To have a better understanding of the policy differences between two similar countries toward a third one, it’s therefore fundamental to explore think tanks’ role in the process of policy-making in a comparative study on the divergent US and EU trade policies vis-à-vis China. This thesis will therefore try to answer the following question:
To what extent did domestic think tanks influence the formation of the divergent EU and US trade policies toward China?
The dependent variable in this question is the current situation of the trade relationship between the US and China on one hand and the EU and China, on the other hand. To explain these differences we treat think tanks’ influence on policy making as our key independent variable (among others). The overall goal of this question is to better understand and explain to what extent “knowledge” has influenced the trade relationships of the US and the EU vis-à-vis China.
1.2. Societal Relevance
The divergent trade policies of these two economic powerhouses are worth our attention for several reasons. To start with, the EU-US cooperation has been, over our recent history, the driving force for the implementation and development of the multinational system we know and its emphasis on free trade. Therefore seeing one of the prominent instigators of the current international system not only turns its back on its own institutions but also discredit them may make-believe it’s the end of an era. Secondly, talking strictly in economic terms, the EU and the US economies are very similar and should expect the same opportunity costs
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in dealing with China. Indeed, taking all European countries together, they represent the second export destination for Chinese goods with approximately 474 billion dollars (European Commission 2020a). The United States is first with 477 billion (The Observatory of Economic Complexity 2019). These numbers show how important they both are for the Chinese economy, being respectively the first and second export destination. Furthermore, China represents the first destination for US goods with 133 billion and 225 billion for the EU (European Commission 2020a). The similarity between the US and the EU doesn’t stop here. They have a very close size in terms of GDP (The World Bank 2018a; 2018b) and their economy is similarly shaped. Indeed they are both significant mature developed economies largely relying on the service industry and who recently faced industry outsourcing to low-income countries (mostly in Asia).
As shown earlier, these two superpowers were also similar in their institutional willingness to enforce multilateralism and free trade. Throughout the 20th century, their history has been tightly correlated by the aim to rein in communism and expand capitalism.We are currently facing the two historical power and allies changing their world view while China, which used to be part of the “blacklisted” communist states, is slowly replacing the US leadership on the international political and economic scene. It is therefore crucial to understand what is the process behind these fundamental changes.
1.3. Academic Relevance
Even if the deflagration of the recent US-China tensions gathered a large media attention, scholars have exclusively focused on the economic specificities and impact of such policies. Indeed, these studies remained descriptive, putting aside the motivation and the creation process behind such change. The same is observable for the trade agreement negotiation with the EU. The main justification for agreements or trade wars is the change in gains of trade.
In the general study of foreign policy, many scholars solely focus on the international equilibrium between nations. Indeed, as the neorealist theory of international relations would argue, these changes can be the results of a power shift from the historical hegemonic power, the United States, to the new one, China (Viotti and Kauppi 2010a). These research take the economic decline of the US to justify its changing position toward multilateralism
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and free trade. However, knowing the economic similarities with the EU (currently holding the complete opposite stance on these issues) this assumption seems to bring incomplete justification for the divergences and changes. It is therefore fundamental to get out of the “black box” representation of states and dig in the national forces, in this case the role of epistemic communities, pushing for specific trade policies. Epistemic communities are defined by Haas as:
“A network of professionals with recognized expertise and competence in a particular domain and an authoritative claim to policy-relevant knowledge within that domain or issue area” (Haas 1992, 3).
This research will take a stand by assessing the role of these epistemic communities and more specifically the importance of think tanks in shaping foreign policies. We therefore hope to be able to bring a more complete and correct answer to our research question.
1.3.1. Theoretical Framework
As much as the neorealist framework is missing an important part of policy-making by ignoring the importance of national actors, classical theories of advice in foreign policy seem incomplete. Indeed, the early research on policy advice emphasizes the influence of advisors depending on their location to policy-makers, inside or outside governments. The locational theory thus focuses mainly on the importance of government insider advices and ignored the “content” of it (Howlett and Hustedt 2018). Kingdon then breaks this black and white dichotomy by analyzing the importance of three streams of our society on policy changes (Cairney and Jones 2016). Even if this theory covers well the different actors of the civil society and account for their importance, it lacks capacity to justify differences in foreign policy making when no important event occurred or when there is no concrete change in the country’s viewpoint. Therefore, this research will rely on Craft and Howlett’s work on policy advisory systems (Craft and Howlett 2013). They state that the advisory system has changed toward a greater reliance on external actors – externalization - and greater use of partisan-political advices – politicization (Craft and Howlett 2013). This theory will allow us to justify the importance of think tanks in policy making, it will also help to consider the divergences between each continent and hopefully explain the major policy differences toward China. This will be further discussed in the next chapter.
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The delicate stage of data gathering will be shaped around think tanks’ document analysis. We will analyze their official reports and advice regarding trade relations with China. The research conducted on these supports will be qualitative and will follow a comparative framework. We will thus compare knowledge brought by US and EU think tanks and their respective effect on trade policies toward China.
As the number of think tanks in the US and the EU is very important and regarding the limited space given for this thesis, we won’t be able to assess each think tanks’ role and position in the policy-making matters. Therefore, a selection is essential and will be based on three criteria adjusted (to the type and number of think tanks) for each region. For the United States, since think tanks are generally affiliated with a political party or ideology, we will select a sample of institutions respecting the distribution of these ideologies. Therefore one think tank of each stream (the most prominent one) will be analyzed. In the EU, most institutions claim to be independent. Therefore it’s not possible to sample the population the same way as for the US. To counter that problem, we will look at institutions having a direct impact and relation with the European Union by relying on the EU Transparency Register. This will be further discussed in Chapter 3.
A good dataset selection is essential to avoid all kinds of selection bias. Doing such comparisons between the official position of each one of these think tanks, we hope to prove that knowledge brought by these institutions is changing government’s attitude toward China which explains the wide differences we are currently facing across the Atlantic or that the knowledge regime official position is similar in both regions therefore suggesting that think tanks don’t have much influence on government’s decision on trade or that this influence varies depending on the political system and region.
1.4. Structure
After laying out the problematic, this part exposes the overall structure followed by this research. In Chapter 2, the theoretical framework is presented. It consists in three parts: the first uncovering the existent literature on the trade divergence between the US and the EU and the second introducing the theory used to test our hypotheses. Once these two steps defined, the hypotheses will be discussed. Chapter 3 will bring up the research design. In
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Chapter 4 will be discussed both the results obtained and their effect on the previously presented hypotheses. The conclusion, discussion and assessment of the results will take place in the Chapter 5.
2. Theoretical Framework
2.1. Introduction
Emanating from the previous chapter’s discussion, this thesis is willing to answer the following question:
To what extent did domestic think tanks influence the formation of the divergent EU and US trade policies toward China?
The study of trade relations between countries is mostly descriptive. It thus draws a very clear representation of the state of each country’s agreement or disagreement with economic partners. However, when it comes to the study of the conclusion of trade agreements with a lens of a specific model, research is sparse. When scholars do refer their studies to a theoretical lens, the focus stays on the nation as a unit and ignores the variety of national actors having a more or less important role in policy-making. This chapter aims to discuss and highlight these theories’ limits in explaining trade divergences vis-à-vis China. To counter these problems this chapter will then turn to the analysis of theories focusing on the study of national actors. Discussing Craft and Howlett insight on changes of the political advisory system will help us set our theoretical framework and fill in other theories slacks. Building on these insights, hypotheses will then be uncovered.
2.2. Literature Review
2.2.1. International Relations Theories
The two classical theories justifying the need of trade agreements between countries are the realist and liberal theories. They played a crucial role in understanding the development of international relations. In the first one, realism, trade cooperation arises from the zero-sum game between nations in which each country tries to dominate the others (Powell 1994). A
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trade agreement is thus a way to overtop the other government. Their representation of state is as a unitary actor where prevails top-down decision-making (Viotti and Kauppi 2010b). This idealization of decision-making has been controversial since the creation of international organizations. Indeed, such cooperation between states toward a common goal (trade liberalization) completely contradicts realist scholars’ main assumption of state working alone in an anarchic world. To solve this problem, neorealism appeared with the explanation of international organization as the creation of a single state, the hegemonic one, to implement and enforce its interests at the international level (Nye 1988). In other words, the United States was the real impulsion behind the development of the 20th century international organizations. As the hegemon is clearly turning its back on the current international trade system, neorealism identifies a shift in economic power from the US to China to explain such change. Indeed, they refer to the hegemonic shift of the 19th century between the UK and the US to contextualize the situation happening in the actual trade system (Allan 2017). As much as this explanation could justify the change in US position against international organizations such as the WTO, it lacks clarifications on its position vis-à-vis China and Chinese relations with the other main economic powers such as the EU. For liberalists, all countries gain from cooperation through international institutions, and the presence of mutual gains (Doyle 2017; Deudney and Ikenberry 1999; Ikenberry 2018). Hence, explaining last century’s development of multilateral organization and agreements. In contrary to realism and neorealism, liberalists don’t view the state as a unitary actor but consider the role of non-governmental agencies in policy-making (Viotti and Kauppi 2010a). Here, the presence of mutual gains in institutional cooperation explains the creation of trade organizations. It therefore clarifies well the increased reliance of both European and Chinese governments on the WTO to solve commercial tensions. Yet, here again, as much as scholars bring a potential explanation to the recent intensification of EU-Chinese trade relations, it greatly lacks credibility when discussing tension between Washington and Beijing or the general US behavior against the WTO.
These founding theories and their rivalry in explaining the development of international trade, greatly advanced the understanding of international relations. However, they seem to come short in explaining certain recent phenomena like the divergent EU and US trade strategy vis-à-vis China. The realist and neorealist “black box” representation of the state downplay the role of national actors in shaping policies. Moreover, the strictly
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based focus ignores regional disparities and potential temporal specificities. Neoliberalism, even if taking into account a wider range of domestic actors in the representation of the nation, doesn’t bring insights on the process or their role in policy-making. The next section thus considers theories filling in the gaps identified by considering the role of actors inside the society on policy-making as much as the importance of knowledge in this process.
2.2.2. Locational Model
The initial motivation to study the influence of each actor in the society on policy making is the discovery of bounded rationality.
“Bounded rationality principle tells us that agents will selectively search based on incomplete information and partial ignorance and terminate that search before an optimal option emerges and chose instead something that is good enough” (Gains and Stoker 2011, 488).
In other words, policy-makers’ decisions are rationally bounded by their human mind which limits the number of solutions they can consider. This concept is the core idea behind the willingness to understand how public policies are created and what is each actor’s influence in raising a specific idea to the agenda. Epistemic communities have an important role in these studies by bringing knowledge and defending impartiality. These include think tanks which role in decision-making has been extensively researched.
The assessment of think tank’s influence on policy-making started before they became as prominent and widespread as they are nowadays. Dror is one of the first academic to set the role these institutions should hold in relation to the government (Dror 1984). His analysis pointed to the fact that early think tanks were not contributing to policy-making as they should, in other words, that they were not supplying enough inputs into public policymaking (Dror 1984).Scholars analyzing the situation several years later have an opposite diagnostic of the situation. They acknowledge think tanks importance but have a variety of theoretical justification to it.
The first theory addressing the way in which think tanks are influencing policy-makers is referred to as the “locational model.” The main idea behind this model is the insider/outsider concept stating that the location of the policy advice to the government has a major influence on its efficiency. Doing so, allowed the classification and mapping of policy advice as a kind of market place for ideas and information (Craft and Howlett 2012). It also
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states that the proximity to decision makers is the key for influence; thus internal advisors have a great influence as external have a minimal one. The model was then developed by saying the degree of government control over internal and external actors was also a factor affecting their power (Craft and Howlett 2012). Another distinctive feature of this theory is that it grants external actors a greater autonomy than internal ones (Veselý 2013).
Overall, the core idea behind the division of the advisory system in two clusters is that one will be able to influence policy-makers and the other won’t. However, as Craft and Howlett (2012) specified, this model seems to miss a point in describing modern advisory systems by focusing solely on the location of the advice. It therefore misses the content brought by different actors in their analysis to the government (Craft and Howlett 2012). The system being increasingly complex and relying on a wide variety of actors, the inclusion of the content of advice is gaining importance in determining the influence of each actor (Howlett and Hustedt 2018). The locational model thus helped to create an argumentation over the possible and varying degree of think tanks influence in the early days of assessing policy-making. It now seems outdated by its simplicity, exclusive focus on the distance with the governance and its ignorance of the role of knowledge. Getting out of this purely locational analysis of domestic actors, Kingdon specify the analysis by distinguishing three streams and extensively describing their role and effect on policy-making.
2.2.3. Kingdon’s Model
Kingdon’s model was built on the importance of multiple actors in the society. It therefore breaks the belief of a linear knowledge brought to policy-makers by a direct and fluid process. It takes place in the evolutionary theories which, apart from acknowledging the role of different actors in the society, seek to explain how and why particular environments operate to help produce specific kinds of policy changes and how actors adapt to help shape their environment (Cairney and Jones 2016). The messiness of policy-making is well captured with the description of three steams influencing policies independently (Gains and Stoker 2011). The first stream, “problems” can be described as: attention lurches to a policy problem. The second stream captures “policies”: available solutions to the problem. The final stream is the “political” one: policy makers motive and opportunity to turn a solution into policy (Cairney and Jones 2016).
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Kingdon also underlines the role of “policy entrepreneurs” defined as insiders providing knowledge to help to couple the streams and therefore access policy-making (Cairney and Jones 2016). Understanding their role is fundamental since it’s only by the addition of these three streams at the same time that an idea rise to the agenda and reach policy-makers (Rawat and Morris 2016). Thus, policy entrepreneurs such as think tanks are key actors in policy-making by bringing all the necessary elements together. The theory pictures change as a slow process with partial mutation which can contrast with other theories such as Baumgartner and Jones radical changes (John 2016).
The original focus being the US domestic policy-making, using such theoretical framework to foreign policies raises questions (Rawat and Morris 2016). Indeed, since its elaboration had been specifically focused on the US model, which is in many ways very specific, doesn’t seem to be generalizable to other countries or policies. As Rawat and Morris have shown in their studies, many scholars tried to apply the three streams model to other issues and other countries but faced difficulties and had to complete their research with additional theoretical background (Rawat and Morris 2016).This model is even more problematic for this topic since it’s systematically based on a policy change. Meaning that to be correctly applied in a comparative analysis, there is a need for a visible change in decision-making. More broadly speaking, Kingdon’s model is very complete in showing the effect and importance of each actor in the society in shaping policies. However, the focus being specifically on policy entrepreneurs as the essential actor to bring each streams opinion together, it misses the role of knowledge in the process. Indeed, as much as recognizing the importance of each actor in the society is essential, ignoring the role of knowledge in the creation of their opinion prohibits the full understanding of the process of decision-making. The lack of consideration for knowledge and consequently for think tanks limits the use of this model to this research. It’s thus essential to consider a model completing this lack of concern as the following section does with the externalization and politicization model.
2.3. Externalization and Politicization Model
Craft and Howlett developed another theory to explain the importance, while also taking into account the evolution over time, of the policy advisory system (thereafter referred as PAS). Their findings lie on the assumption of a dual dynamic of change in the PAS, further
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developing the evolutionary theory. The first one: “externalization,” identifies the extent to which actors outside government exercise influence on policy making as the second one: “politicization,” discuss the extent to which partisan-political aspects of policy advice have displaced non-partisan public sector sources of policy advice (Craft and Howlett 2013). This new way of advisory making is changing not only by externalizing the advice but also by now combining technical knowledge to political viewpoints (Craft and Howlett 2013). Moreover, it dismantles the “vertical” system where internal sources were more influent than external ones. This chapter will firstly discuss the concept of externalization before getting to politicization.
The first important feature of externalization is an increasing relevance of non-governmental actors in policy-making (Howlett and Hustedt 2018). The pluralization of the PAS is believed to change the representation of public institutions as having a monopoly on policy advices. Three explanations are brought up by scholars to explain this change. Firstly, the change in supply and demand. Indeed, some state that, in order to secure their power and legitimize political decisions, elected officials include opinions from a wider range of actors in order to canalize the opposition (Craft and Howlett 2013). With the increasing number of officials relying on these pieces of advices, the demand increased modifying the advisory system into something close to a liberal market in which the advice supply depends on the corresponding demand.
This idea is further developed in Boston’s work on OECD countries purchases of advice (Boston 1994). In his work, he specifies the expertise of “any organization, be it a department, agency, firm or think tank, which supplies policy advice to a government will build up (…) in its particular area of responsibility” (Boston 1994, 14). Therefore there is not only a multiplication of the type of actors accessing the role of policy advisors but these try to find their “niche” in the system by specializing in a specific area. Metz, by studying the use of expert group in the European commission, highlights the need of external policy advice as resulting from both an increased demand for technical and political knowledge and an accumulation of organizational slack (Metz 2013).
Secondly, the role of globalization. Globalization brought its great amount of cooperation but also the so-called “wicked” policy problems, erasing “territorial boundaries” for many policies, transforming them into international issues (van den Berg 2017). These new
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problems and the incapacity of the classical national advisory system to answer them are reasons for the increasing demand for external source of policy advice, also at the international level. The European Union and its supranational governance system is an especially good example for this phenomenon since domestic actors are allowed to influence the intergovernmental PAS and the other way round (van den Berg 2017). The third and last explanation focuses on the supply side of policy advice. The increasing number of policy advisory sources are also the result of the diminished capacity of public institutions to respond to problems in time (Craft and Howlett 2013). The “external” advisory system thus developed and is increasingly shaped as a market place. It allows for a greater share and production of content.
These three explanations allow a better understanding of Craft and Howlett’s concept of externalization. Moreover, it supports the idea that think tanks play an increasingly important role in policy-making. As their role has extensively been discussed for the US political context, many studies now show a globalization of the phenomenon (Howlett and Hustedt 2018).
Politicization or the increasingly predominant role of partisan advice in the PAS, can be observed in two different ways: First by an increase in the degree to which political-strategic insight is seen as relevant for the civil service when at the same time a decrease in substantive expertise is observed. Secondly, by the growing role of political appointed ministerial advisers in policy advices (van den Berg 2017).
Abelson, in his research on think tanks in Canada, proved that an important part of think tanks’ work nowadays focus on providing brief reports to policy-makers and journalists on short-term issues (Abelson 2007). As these institutions used to reflect on long-term and important problematic, they are shifting their advisory capacity to more politicized issues bringing more attention to their work but losing their niche expertise (Abelson 2007). Reacting to this trend, Rich described the impact of such politicization and mediatization: “By responding to a political environment in which ideology and marketing often override basic credibility as the criteria by which experts are judged, some think tanks contribute to lowering the standards for expertise (Rich 2004, 217).”
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A large number of definitions are also possible for politicization, thus in their work, Craft and Howlett rely on the one proposed by Eichenbaum and Shaw and also known as the administrative politicization:
“An intervention that offends against the principles and convention associated with a professional and impartial civil service (Eichbaum and Shaw 2008, 343).”
To avoid any confusion this research will rely on this definition to assess the potential think tanks politicization.
Even if Craft and Howlett’s concepts seem to explain well the current changes emphasized in the PAS, they aren’t exempt of problems. The first one, highlighted by Vesely, is the extent to which externalization might differ between various countries (Veselý 2013). Indeed, current research on the subject are focusing exclusively on long-established democracies and most developed countries, constituting a selection bias. This selection of countries makes it impossible to generalize the argument to developing regions. Furthermore, Vesely found that the concept of externalization could vary across sectors (Veselý 2013).
A much as these limitations would render the concept inapplicable for some cases, it perfectly captures changes for the two regions of interest in this research. Therefore, we acknowledge that the applicability of this theory is limited to some countries but strongly support that it’s a good way of explaining changes in foreign policies for our specific case. Indeed, since we aim to compare and explain trade disparities between the US and the EU, it seems to be a valid explanation since both sides are major developed and democratic actors. Therefore, even if the theory fundamentally requires further discussion to become globally applicable, this limitation shouldn’t affect its use in our specific case since the aim is only to compare two similar cases.
The second possible issue with Craft and Howlett’s first concept is that it can take any shape and imply all sorts of consequence since it’s not extensively defined (Veselý 2013). Thus the meaning of externalization can vary greatly from one study to another and thus also affect results. This work will use the definition of externalization presented by Vesely and most commonly used:
“The relocation of advisory activities previously performed inside government organizations to places outside of government (Veselý 2013, 200).”
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Craft and Howlett’s model is embracing the important role think tanks hold in the process of policy making while also being applicable to changing situations. This research will therefore focus on their work to explore the role of these epistemic communities on the divergent position of our two cases toward China. Their emphasis on the change of the PAS toward more reliance on external actors and their politicization is a good explanation to countries’ changing position and to identify the role of knowledge in such process.
2.4. Hypotheses
Drawing from these two concepts, it’s now possible to set our hypotheses. The first hypothesis will be the following:
Hypothesis 1: The US government recent and growing reliance on policy advices emerging from outside the government justifies the deterioration of the US-China trade
relation.
The recent think tanks recommendations should thus coincide with the initiation of the growing tensions between Washington and Beijing in 2018. Assessing this affirmation will allow to show the link between think tanks efficiency in influencing policy-makers and the growing tensions between the US and Chinese governments. A second hypothesis is necessary to complete this first assumption on US-China trade war:
Hypothesis 2: The deterioration of the US-China trade relation takes source in the growing number of think tanks’ partisan reports.
Expecting a change in think tanks recommendations in favor of an increase of partisan-biased advices finds its roots in Craft and Howlett’s politicization concept. Indeed, if this research is able to prove that the nature of advices changed before the application of tougher-import tariffs against China, it will be an additional justification to the importance of think tanks in shaping trade policies.
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Hypothesis 3: The EU institutions recent and growing reliance on policy advices emerging from outside the government justifies the intensified EU-China trade
cooperation.
This third hypothesis takes back the assumption made on the growing reliance of think tanks in US policy-making, but this time by affirming that this growing role is favoring a greater cooperation with China. It thus introduces the next hypothesis:
Hypothesis 4: The Intensified EU-China trade relation takes source in the growing number of think tanks’ partisan reports.
The expected diminished impartiality in Europeans epistemic community is in this case expected to favor a greater cooperation with China in terms of trade. The last hypothesis draws from the four already discussed to assess the relation between think tanks and policy-makers on a broader level:
Hypothesis 5: The knowledge and policy advice built by think tanks have a direct effect on governments and thus on foreign policy-making.
This hypothesis acknowledges the role of think tanks on policy-making which represent the final step in explaining the divergence in trade policies between the US and the EU toward China. It’s important to prove their place in shaping policies since our research question is focusing on their role in the divergent trade policies. If we are able to prove they have an impact on government’s decisions, it will then mean that divergent think tank analysis on trade can explain the different willingness to conclude trade agreements.
By testing these five hypotheses, this research hopes to precisely answer the research question. Moreover, they allow to account for each part of the process of policy advice and changes occurring for the past years and each one of the concepts used in by our theoretical framework.
22 3. Methodology
3.1. Introduction
As previously explained, this comparative research aims to explore the development of foreign policy-making in order to explain the recent divergence between the US and the EU trade strategy vis-à-vis China. This chapter will discuss the research design this study will follow. First, the data collected in our sample will be discussed. More precisely we will look at the number of think tanks analyzed, the type and selection criteria. For both the EU and the US, only a sample of think tanks will be selected from the overall population. Therefore, this section will explain on which ground the selection has been conducted. Then the method of analysis will be exposed. Once the data collection explained, we will go through the operationalization of the two variables arising from our theoretical framework: politicization and externalization. The last part of this chapter will be dedicated to the discussion of possible limitations emerging from the research design.
3.2. Data Collection and Analysis
3.2.1. Method of Data Collection
The first step in the construction of this comparative analysis is to constitute a database representing each region’s work on trade policies with China. As the number of think tanks in both the US and the EU is very important, it’s impossible to analyze all their reports. This research is therefore focusing on a sample of think tanks representing the overall population. The sample is crucial to get the right and unbiased overview of the domestic official position over this foreign policy. To take into account all types of ideological differences inside each region’s epistemic communities, the selection criteria is adapted to the overall population. The first step of the US think tank’s selection is to look at the domestic role and position of these institutions. In other words, whether or not they are affiliated to a political party, specific ideology or work independently. The main outcome rising from the mapping of the US think tank population is that they are easily classifiable between ideologies since most of them claim their link to a specific ideology. The following table reports the six different ideologies identified:
23 Number Ideology 1 Conservative 2 Libertarian 3 Progressive 4 Independent 5 Centrist 6 Liberal
In order to have a representative view of the overall political advisory system in the US, we will analyze one think tank per political ideology. Indeed, it’s expected that the main variations in policy advice appears between the different types of institutions and not inside the respective ideology. Once the environment settled, comes the selection of the analyzed think tank for each category. Here the importance lies in the selection of the most influent institution in each one of these categories. Indeed, since we are interested in determining the role of think tanks on shaping trade policies with China, the more influent the institution, the more accurate our results will be. Therefore, we will rely on the Global Go To Think Tank index report by the University of Pennsylvania (McGann 2020). The yearly report build, with the use of experts and extensive research of think tanks, a classification of the best think tanks in the world (McGann 2020). The global classification is also followed by a regional ranking which will be used here. To build their report and classify institutions, researchers rely on a large number of criteria, the main ones being: the quality and commitment of the think tank’s leadership, the ability to recruit elite scholars and analysts or even the quality, number and reach of its publications (McGann 2020). Their work is thus perfectly suited to help choose the most influent institution for this research. To complete this criterion, our selection of think tanks depends on the number of publications on our matter of interest.
To sum up, the choice was made firstly on the ideology, to have one think tank per category identified. Secondly, it focused on the US regional ranking. And finally the number of publications is also considered in order to have a clear overview of the official position regarding the problematic. These three criteria excluded some think tanks such as the Urban Institute, a liberal institution better ranked than the CAP but which didn’t publish enough
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reports to draw a sufficiently clear position over the trade relations with China. This leaves us with a selection of the following 6 think tanks:
Think tank Name Ideology Number of
reports Date range US ranking
The Heritage
Foundation Conservative 9 2016-2020 3
Cato Institute Libertarian 6 2015-2019 13
Brookings Institution Progressive 5 2019-2020 Center of Excellence
Belfer Center for Science and International Affairs
Independent 9 2015-2020 12
Center for Strategic and International
Studies
Centrist 11 2016-2020 1
Center for American
Progress Liberal 2 2017-2019 7
Two important information must be drawn from this table. The first one is that the selection is in the top 13 best institutions in the US. The second point concerns the date range of the reports analyzed. It is indeed the second part of this data collection. In order to capture the policies changes creating the divergence between the US and the EU trade policy toward China, it’s crucial to have enough reports published both during and before the potential policy change. Since the first important tariff against Chinese imports were implemented by Trump Administration in 2018, it has been decided to look at reports from 2015 onwards. Not only it allows to possibly take into account differences in the Chinese representation with the new government, but also allows to see the changes over time. Moreover, scholars affirm that the knowledge brought by experts can take years to reach policy-makers. Considering reports published 3 years before the beginning of the trade war allows to control for this possibility.
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One of the problems faced by this research is the possibility of a reversed causality. Meaning that instead of having think tanks reports influencing policies, it could well be that these reports are published after the policy enforcement and rather have a policy justification or denunciation role. So once again, taking a six-year span is essential to see the evolution and the order in which policy ideas appeared which will help clarifying the analysis.
The selection of the European think tanks and reports differ in many ways. To start with, the overall epistemic community in the EU is very different from the one in the US in the sense that nearly all think tanks claim to be independent and not spread specific ideologically related reports and ideas. Therefore, even if the number of think tanks in the EU is now very close to the one in the US, it’s impossible to classify them as we have done for the latter. The second difference lies in the structure of the European Union itself. Since we are comparing a country to a union of 28 states, it’s crucial that the sample of think tanks studied in the EU has a direct impact on European politics. This is the first and most important criteria of our selection since it gets rid of all institutions only providing their expertise to national governments and focusing on national policies. The European transparency register (Europa 2020) allows to see which lobby or think tanks are registered at the European level and thus directly influencing policy-makers. The think tanks used will all be part of the register’s subcategory “think tanks and research institutions.” The second criterion is the number of publications on the matter of interest. As for the US, it allows to get a clear representation of the official position on the subject. The third and last criterion is for the institution to appear on the think tank ranking index (McGann 2020). The following table sums up the eight different think tank selected to represent the knowledge brought in the EU.
26 Think tank name Number of
reports Date range Ranking
Registering date
Bruegel 5 2016-2020 1 27/09/2011
Carnegie Europe 8 2016-2019 28 25/09/2015
European Centre for International Political Economy (ECIPE) 5 2016-2018 64 23/10/2019 European Council on Foreign Relations (ECFR) 3 2015-2019 25 14/01/2015 EU-Asia Centre (EAC) 2 2018-2020 - 21/12/2012 European Institute for Asian Studies
(EIAS) 3 2015-2019 - 03/07/2013 Trans-European Policy Study (TEPSA) 2 2019 - 03/01/2014
Centre for European
Policy Study (CEPS) 3 2017-2020 7 18/07/2016
Some of these institutions are not classified in the 2019 think tank ranking; however, they are still part of our research since they have an important role in the EU policy-making and published enough reports on trade relations. The size of the European dataset is bigger than for the US due to their lower number of reports.
Here again, reports from a six-year span will be analyzed in order to take possible changes into account and determine as precisely as possible the role of think tanks in policy-making. For both US and EU think tanks, this six-year span is applied, meaning that when the reports analyzed don’t cover the whole period, the institution didn’t publish any report on that matter during these years. This leaves us with an overall analysis based on 73 different reports including 42 from the US think tanks and 31 from the EU ones.
27 3.2.2. Method of Data Analysis
Once all these documents gathered, their analysis can start. To be able to compare results from think tanks influence, this research will implement document analysis. Document analysis allows to take the main recommendations from each report and draw a map of what emanates from each actor of our sample. Once these ideas classified per region, institution and date, we will be able to compare them to the trade policies. Doing so, we will not only be able to see if the knowledge brought by these institutions vary between each line of thought, but if it’s the case, which one is the most influent. It will also indicate the real impact of these publications by comparing their publication to the date of policy implementation.
For instance, if the policy is implemented after a large number of think tanks recommended it, it’s a proof of direct influence on policy-makers’ decisions. If, on the other hand, reports are published systematically after the policy, it might show the willingness for justification or questioning of the policy. This method of document analysis allows to determine what is our dependent and our independent variables, which is not possible beforehand.
3.3. Operationalization
This section will be used to transform our two concepts emerging from the theoretical framework into empirically observable entities. Following this process, we will be able to compare our results to our hypotheses and thus reject or confirm them. Following Craft and Howlett theory, to measure the influence of each think tank on its government policy vis-à-vis China, we will use the concept of externalization and politicization (Craft and Howlett 2013).
Externalization is important to provide proofs of the important role played by domestic epistemic communities (specifically think tanks) on policy-making. As politicization helps justifying the growing divergence between US and EU strategy toward China. The analysis will measure for each of these concepts the indicators shown in the following table:
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Concepts Dimensions Indicators
Externalization Think tanks reports - Number of reports per think tank - Date of each report
- Number of direct recommendations - Type of recommendation
- Recommendation per Think tank - Recommendation per region
Policies - Date of the implementation
- Type of policy - Policy focus
Politicization EU reports - Date of each report - Report length - Report focus
US reports - Date of each report
- Report length - Report focus
Externalization indicators are meant to capture similarities between policies and think tanks recommendations over time. In the case of a correlation between indicators, we will be able to prove the government increasing reliance on think tanks. Concerning politicization indicators, they are meant to capture the changing length and focus on short-term problems. This research will thus follow these indicators in order to set and analyze results. It will then be possible to draw conclusions from the analysis and determine think tank’s role in the policy divergence between the US and the EU vis-à-vis China.
3.4. Limitations
The European Union being extremely diverse, capturing, in a sample, all types of beliefs and strategies concerning trade relations with China is a difficult task. In order to avoid any bias, a solution would have been to divide the Union per region, such as eastern European countries, Western and so on. By classifying think tanks by regions, it would allow to capture variation in the expected role of EU institutions in building trade relations with a third party. However, as the aim is to determine the impact of the epistemic on European
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institutions, it’s fundamental to have a proof of direct connection of the institution in question and each think tank. The transparency register allowed to do so at the expense of considering think tanks not registered. As the most influent think tanks are based in Brussels, close to policy-makers, looking at regional differences is losing any interest. The selection based on international, regional ranking is also facing limits. The index used to determine the rank of each think tank analyzed is from the year 2019. However, the analysis is conducted on a six-year span (from 2015 to 2020); thus they might be reflecting a greater or lower influence than the one given here to their institution. As much as this problem is complicated to solve, theories of the influence of knowledge on policy-making often expect the impact to happen after a certain period of time. Therefore the ranking of each of these research institutions are reflecting their impact at a certain time gives a general idea but should not affect the global interpretation of their results.
This brings us to the discussion of the use of document analysis itself. Indeed, document analysis is an excellent tool to strictly represent think tank’s official position. Nonetheless, it’s often recommended to complete the analysis with other channels of information such as interviews. The risk with focusing on the sole use of documents is to give excessive importance to their role and effect on policy-makers. In this specific comparative case, it seems, however, adapted to accord these documents a rather big role since the aim is to draw each region’s source of their trade strategy with China. Therefore, looking at the official “line” of each think tank is a good first step in determining their role in shaping policies. In any way, the design being specifically focused on think tanks, is already omitting several actors of the political advisory system. It’s thus impossible to affirm that these reports are the only reason for policy-makers’ choices. Nevertheless, this research doesn’t claim to look at the one and only actor influencing policy-makers but rather aims at completing the literature by determining the role of think tanks in this process and possibly by doing so, explain the increasingly divergent trade relation of the US and the EU vis-à-vis China.
30 4. Analysis
4.1. Introduction
This chapter analyze results from think tanks and policies sample. Before digging in results obtained by the qualitative analysis, this section will refresh the events and general context of the period of interest. Then, it will focus on each country’s externalization results by starting to look at the general publication and policies timeline before exposing the content and possible correlation between advice and policy-making. Secondly, it will assess results from the politicization analysis. Once these results analyzed, the last part will gather them up and confront them to our five hypotheses in the hope to answer our research question by affirming or rejecting these hypotheses.
4.2. Contextualization
This section is dedicated to the contextualization of the following results. Hence, results on both externalization and politization analysis need to be correlated to the context of their time to be further analyzable. We will thus discuss the events timeline for the United States before moving to the one of the European Union.
The year 2016 marks the election of the 45th president of the United States, Donald Trump. His campaign held primarily on nationalist objectives and the reject of international institutions made experts fear for a trade war with China. As the year 2017 was marked by a relative calm relation between the two nations, the new administration engaged in a first retreat on the international level by withdrawing from the Trans-Pacific Partnership (TPP) (Taylor 2018). The negotiation of this agreement was initiated in 2005 and put forward as strategic for US interests in the region by the Obama administration (McBride 2019). Trump taking such a sharp turn against multilateralism in his first year of office clearly marked the willingness to change the US international strategy.
Indeed, 2018 marks the beginning of the trade war with China with the first tariffs imposed on steel and aluminum (Bown 2019). The relation will quickly escalate that year (and the next one) with both parties imposing tariffs on diverse goods. Initiated mid 2019, negotiations for a first phase trade agreement between Washington and Beijing were
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finalized early 2020. While recognized as a first step toward the normalization of the trade relations, this first deal doesn’t get relations back to their initial point. Now that the timeline of events is clear for the United States, it’s time to refresh the one for the EU.
The willingness to develop a tighter relationship with China at the European level gets back to 2013. Indeed, that year the European Commission launched negotiations for the creation of a bilateral investment agreement (European Commission 2013). This is supposed to be the first step toward a Union-level trade agreement with China. The idea behind the relation between Beijing and Brussels as a unified actor is to merge trade rules between member states which have concluded bilateral agreements at the national level. The year 2013 is also marked by the Belt and Road initiative launched by the Chinese government (Chatzky, Segal, and Cohen 2020). This project aims to connect Europe to Asia with the construction of new infrastructures.
In 2016, the EU commission reasserted its willingness to develop a bilateral agreement on investment and discuss trade relations (European Commission 2016a). Since then, both countries haven’t done much progress toward the agreement. However both government has been intensively discussing possible ways to deepen trade relations. Keeping these in mind, it’s now possible to turn to the results analysis.
4.3. Externalization
The analysis conducted on 6 US and 8 EU think tanks collected a total number of 148 recommendations. The dataset on US policies gathered a total 25 policies as the European one gathered 11. This section will start by exposing think tanks’ data such as their rate of reports containing recommendations. Then it will compare reports and policies publication date to set the general timeline of events. Once the timeline set, we will dig in the content of think tanks reports by looking at their recommendations. The main ones listed, we will be able to compare them to policies targets and determine more precisely if think tanks influenced these policies and thus if governments divergence can be explained by Craft and Howlett’s theory by relying on external knowledge to develop their trade policies with China. To complete these results, we will look at recommendations specific to each think tank to determine if one of them has a greater influence on policy-makers.
32 4.3.1. US Qualitative Analysis
For our 6 think tanks, results show that over the total number of reports published during the period of interest (2015 to 2020), which rise to 53, only 42 were explicitly advising the White House on how to develop its trade relation with China. Making an average of 80% of reports directed not only to the analysis of trade relations but also to concrete recommendations. The appendix 1 is reporting and referencing in detail all these reports. The sample selected for US think tanks is representative of the six most predominant ideologies. The number of publications on our matter of interest and the rate of reports containing explicit advices is varying between think tanks. Indeed, the number of publications during the period of analysis range from 14 for the CSIS to 3 for the CAP. However, these numbers must be observed with cautions since not all of them include direct advices to policy-makers. The following table sums up the number of reports for each think tank and their rate of advice:
Think tank Total number of
reports
Including explicit
advices Advice Rate
The Heritage Foundation 10 9 90% Cato Institute 8 6 75% Brookings Institute 6 5 83% CSIS 14 11 78% CAP 3 2 66% Belfer Center 12 9 75%
The most active think tank is well the CSIS but when it comes to advising the White House, it stands only in the third position, behind the Heritage Foundation and Brookings Institute. For all institutions, the rate of reports including advices is higher than 50% indicating that US think tank’s main activity is to advise policy-makers and not only to submit descriptive information. Since we are interested in the effect of think tanks’ recommendation on policy-makers, this section will remain focus and further analyze the 42 reports explicitly advising the government.
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The number of reports concerned by US-China trade relation varies over time. With the following timeline, it’s possible to observe the dispersion of publications between 2015 and 2020:
This timeline shows the publication date of each report analyzed and the think tank publishing it. Naturally, the timeline extends to the end of the year 2020 but reports analyzed are extending only until May 2020.
Representing results as such allows for a quick understanding of think tank’s activity over time. Two points must be discussed here. Firstly, there is a slightly higher productivity starting early 2017 which coincide with Trump accession to the White House. Secondly, the timeline shows a densification of reports between mid 2019 and 2020. To analyze these results, it’s necessary to compare them to policies. Indeed as Craft and Howlett’s theory indicates that governments increasingly rely on external actors such as think tanks to implement policies, the increasing number of reports should be the results of an increased need for policy advice. It should thus appear before the enforcement of new trade policies. The dataset of US trade policies, which table and references can be found in the appendix 2, shows the following results:
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Before getting to the analysis of results spread of this timeline, acronyms need a few explanations. The denomination “WTO” indicates that the US dropped a complaint at the WTO resolution mechanism. “Tariff” is the imposition of a new tariff on Chinese goods or services, as “process” indicates that the White House initiated a process that might lead to additional tariffs. “Postpone,” indicates that the imposition of a new tariff or the increase of existing ones has been pushed later in the year as “Reduction” and “Suspension” indicate the reduction or the suspension of existent tariffs. The last two policies denominations are respectively “Fin” the indication of the finalization of an agreement as “Deal” indicated the signature of a trade agreement. The marking system allows not only to have a clear representation of the distribution of policies over time but also their evolution. We thus see that until mid 2018, the only way for the United States to counter China’s trading misbehavior was through the WTO. It’s only in July 2018 that the White House imposed its first unilateral tariffs on Chinese imports. The shift from WTO to direct tariff is well observable with such timeline. Indeed the first tariff was imposed on July 2018 and the last official complaint to the WTO was dropped the same month. The United States then only relied on direct, unilateral measures. With this technical change also came the multiplication of measures. Moving from a maximum of three policies per year until 2018 to five in 2018 and eleven in 2019.
Comparing policies to reports, results show that most reports appeared before the US strategy shift toward direct actions. The analysis of the content of these reports will be
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necessary to determine whether or not they were the motivation for such strategical change. Another feature of this comparison is the great multiplication of reports between June 2019 and early 2020 which seem to coincide with the second wave of Trump policies. Since this second wave is a mix of tariffs increase, postpones of planned increases and trade agreements, determining if reports were the results or the impulse of the Trump Administration policy remains difficult. Therefore, the second step of this qualitative analysis is to look at reports and policies sampled content.
Starting with reports, results show a variation between think tanks and over time. The following table highlights the 11 different recommendations made over the whole six-year period:
Recommendation Frequency
1 Keep TPP negotiations 1
2 No focus on currency discipline 3
3 Bilateral Agreement 12
4 Intensify dialogue for deeper changes 14
5 Reassess China 12
6 Rule-based cooperation 2
7 Set clear goals 6
8 International Cooperation 12
9 National reforms 5
10 Avoid tariffs 8
11 Levy tariffs 4
The first advice “keep TPP negotiations” indicates the need for the US to keep the negotiation going on for the Trans-Pacific Partnership to counter the Chinese offensive in the region. The second one “No focus on currency discipline” warns about the US willingness to impose currency discipline to China as this would penalize countries, including the US, when facing natural currency changes. “Bilateral agreement” is combination of the recommendation to develop a bilateral trade agreement and the need of a Bilateral Investment Treaty. They form a single category since they both reflect the need to have a bilateral agreement with Beijing to further develop economic and trade ties. “Intensify dialogue for deeper changes” reflect three types of recommendations; the ones advising to further negotiate, the ones advising for negotiations to go further than economic aspects and the last ones on the need for regulation on specific issues such as IP rights.
