The EU in the Global Economy

Teacher(s)

Defraigne Jean-Christophe;

Language

English

Main themes

1. Analysing the long run trends of globalization
2. Analysing the economic relations between the EU and its main economic partners

Learning outcomes

At the end of this learning unit, the student is able to :
1	Provide the multidisciplinary analytical and empirical tools to assess the evolution of economic relations between the EU and the global economy, Understand the global mechanisms that affects EU business in terms of risk and opportunities. Develop the capacity to develop a thorough case study of a strategy for a EU firm operating outside the EU or facing competition from non EU firms.

Content

1. Analysing the long run trends of globalization

• This part of the course will outline the geographical and historical evolution of the world economy (from 1945 to the present times) and how it affected the European Union economies 
  • at the macroeconomic level of national economies and the multilateral trading system, analysing the changes in terms of trade & FDI policies, opening of financial markets and exchange rate policies
  • at the microeconomic level of the firm by understanding the evolution of the global value chain, the higher interconnectivity between national markets and multicultural aspects of international management

1. Analysing the economic relations between the EU and its main economic partners

• This part of the course will analyse the trends and patterns of economic relations (trade, FDI, financial flows, labour movements and R&D cooperation) between the EU and each of its main trading partners (USA, China, Russia, Switzerland, Norway, Japan, South Korea, India and Canada).
• It will analyse the trade policies and trade disputes between the EU and each of its main trading partners.
• It will analyse the risks, obstacles and challenges faced by EU firms trying to penetrate these markets or having to adapt to the penetration from competitors originating from these countries.

Teaching methods

Students are expected to prepare preliminary readings for the course which implies to develop a synthesis of the main arguments of their readings. Readings constitute an essential prerequisite of the course. The professor will develop the lectures based on the readings. Lectures will outline and discuss empirical material and specific case studies. Lecture will necessitate a high degree of interactions with the students.

Evaluation methods

Assessment methods

1. Attendance

Attendance accounts for 20% of the final mark.

1.  Examination 

The examination for this course will consist of two parts that will take place on the same day during the examination session.

1. Collective essay (40% of the mark)

Writing a group essay accounts for 40% of the final mark. Students will be organized in groups of three. Each group will submit one essay of 6000 words on. The topic is chosen jointly by the group of students and the professor. This choice will be set two weeks before the end of the term at the latest. The topic of the essay can be either selected in a list provided by the professor or students can suggest a topic of their own that has to be approved by the professor.
The essay in a PDF format has to be sent by e-mail to jdefraigne@yahoo.com 72 hours before the date of the examination. You will receive a mail acknowledging the reception of your essay within 24 hours, if not contact the professor asap. The essay will be defended by the three students collectively at the oral examination.
The document that contains the essay should be named following this template (if the template is incorrect, the essay might be lost):
AMEBEP-Last name of student 1- Last name of student 2- Last name of student 3
e.g. AMEBEP-defraigne-fontan-sibony
The professor will carefully check for plagiarism and for the use of any AI device.

1. An individual oral examination (40% of the mark)

After their group essay, each student will have to answer individually two questions (based on the lectures) chosen randomly from a list of questions given by the Professor before the April Break. The student cannot access/consult any academic material during the oral examination. For each of these two questions, the student shall be given 5 minutes preparation.

Bibliography

PART TWO : AN OVERVIEW OF GLOBALISATION
Lecture 2: The rise of Europe in the World Economy 1492-1873
Readings (41 pages)
•DEFRAIGNE, Jean-Christophe: “The historical links between China, Europe and the developingworld” in “China, the EU and the Developing World”, Eds Matthieu Burnay, Jean-ChristopheDEFRAIGNE & Jan Wouters, Edward Elgar, Cheltenham,2015, pp19-60.
•KENNEDY, Paul, The Rise and Fall of the Great Powers, Vintage Books, New-York, 1987, pp143-1885
Questions
1.What are the factors that account for the difference of growth rate between Europe and the rest of theworld from the 16th century to the 19th century?
2.Why did Asia miss the industrial revolution before the late 19th century?
3.Outline Pomeranz’s arguments that underlines the importance of the American colonies for theEuropean economy
Lecture 3: The acceleration of globalization, imperialism and wars: Europe from 1873 to 1945
Readings (63 to 80 pages) (choose one among these two options)
MANDEL, Marxist Economy Theory, pp441-480 & DEFRAIGNE J-C, De l'intégration nationale à l'intégration continentale, Editions l’Harmattan, Paris, 2004, pp70-94.
KENNEDY, Paul, The Rise and Fall of the Great Powers, Vintage Books, New-York, 1987, pp194-274
Questions
1.Explain the drive for colonization
2.Explain the economic roots of WWI
3.Explain the economic roots of WWII
Lecture 4: The emergence of multinational enterprises (MNEs) and the global value chain
Readings (139 pages)
•DICKEN, Peter : “Global Shift: reshaping the global economic map in the 21st century”, Sagepublications, London, 2015, pp 40-109
•TUN, Eric : « The Globalization of production” in Ravenhill, John: “Global Political Economy”,Oxford University Press, 2017, pp174-195
•DEFRAIGNE Jean-Christophe, La reconfiguration industrielle globale et la crise mondiale, Outre-Terre, revue européenne de géopolitique, N°46, Edition l’Esprit du Temps, Paris, 2016, pp143-192.
Questions
1.How do you explain the emergence of modern MNEs in the late 19th century?
2.Why did MNEs developed global value chains in the 1960s?
3.Why did the globalization of the economy accelerate from the 1990s to the end of the 2000s?
4.Why despite economic globalization, there are still regions far more developed than other?
Lecture 5: From the Bretton Woods system to the Washington Consensus 1944-2001
Readings (chose one reading among these four possibilities: 60-93 pages)
•EICHENGREEN Barry: “The European economy since 1945”, Princeton University Press, 2007,chapitre 9, pp252-293 & HELLEINER, Eric: “States and the reemergence of global finance”, Cornell,1995, pp1-50
•HARVEY, David: “A brief history of neoliberalism”, Oxford University Press, 2005, chapters 1&2
•STRANGE, Susan: “Casino Capitalism, Manchester University Press, 1986 chapters 1&2
•KOLKO, Joyce : « Restructuring the World Economy », Pantheon Books, New-York, 1988, chapitres1à 4 pp15-100.
Questions
1.How did the Bretton Woods “system” emerged?
2.How do you explain the end of the “embedded capitalism” and the rise of neoliberalism ?
Lecture 6: Global economic governance & the end of the Washington Consensus: the return of Great Powers Rivalry 2001-2022
Readings (chose one reading among these four possibilities: 71 to 95 pages)
•ALLISON, Graham, Destined for War, Scribe, Melbourne, 2017. pp2-24 & pp 89-184
•BLUSTEIN, Paul, Schism, CIGI Press, Waterloo, Ontario, 2019 pp1-44, pp141-168
•PRESTOWITZ, Clyde, The World Turned Upside Down, Yale University Press, 2021, 139-213
•FRIEBERG, Aaron, A Contest for Supremacy, Norton, New-York, 2011, pp36-119
•DEFRAIGNE J-C, Is China on the Verge of a Weltpolitik? in Bart Dessein (Ed): Interpreting China asa Regional and Global Power, Palgrave Mc Millan, London, 2014, pp293-323 & DEFRAIGNE J-c, Lescontradictions de l’administration Trump et l’avenir du commerce mondial », Grésea Échos n°93, mars2018.
Questions
1.Is the US hegemonic position being challenged since 2008? To what extent?
2.Can a US-China conflict be avoided?
PART THREE : THE EU IN THE WORLD TRADING SYSTEM
Lecture 7: The World Trading System from GATT to the WTO
Readings (157 pages)
•NARLIKAR, Amrita, “The World Trade Organization: a very short introduction”, Oxford UniversityPress, 2005, pp1-143pp.
•DEFRAIGNE, Jean-Christophe & NOUVEAU Patricia : « Politique Commerciale » in « Introduction àl’Economie Européenne », 3ème édition, Ouvertures Economiques, De Boeck, Brussels, 2022, pp524-538
•HOPEWELL, Kristen, Clash of Powers, Cambridge University Press, 2020 pp30-59
Questions
1.What is dumping and how do the WTO rules try to contain it?
2.Is the WTO dispute settlement mechanism always fair and effective? For what reasons?
3.How do you account for the flurry of regional trade agreements since the 1990s? Are they building orstumbling blocks?
4.Is the WTO a fragile and weakening institution and if so, why?
Lecture 8: The World Trading System from GATT to the WTO
Readings: no reading this week (0 pages)
Questions
1.What is dumping and how do the WTO rules try to contain it?
2.Is the WTO dispute settlement mechanism always fair and effective? For what reasons?
3.How do you account for the flurry of regional trade agreements since the 1990s? Are they building orstumbling blocks?
4.Is the WTO a fragile and weakening institution and if so, why?
Lectures 9 : The framework of the EU trade policy from an institutional approach and from an IPE approach
Readings (103 pages)
•GSTOHL Sieglinde & De BIEVRE, Dirk : « The Trade Policy of the European Union”, Palgrave McMillan, 2018, pp19-108.
•DEFRAIGNE, Jean-Christophe & NOUVEAU Patricia, Introduction à l’Economie Européenne, 3èmeédition, Ouvertures Economiques, De Boeck, Brussels ,2022, pp539-552
Questions
1.Outline the different institutional steps of the EU in the making by of a trade agreement with a thirdcountry.
2.Why have the trade agreements become increasingly complex to negotiate and ratify?
3.Analyse the offensive and defensive aspects of the EU trade policy.
4.Identify the various possible stakeholders involved in a trade agreement negotiated by the EU.
Lectures 10: The framework of the EU trade policy from an institutional approach and from an IPE approach
Readings: : no readings this lecture (0 pages)
Questions
1.Outline the different institutional steps of the making of a trade agreement with a third country by theEU
2.Why have the trade agreements have become increasingly complex to negotiate and ratify
3.Analyse the offensive and defensive aspects of the EU trade policy
4.Identify the various possible stakeholders involved in a trade agreement negotiated by the EU.
Lecture 11: The transatlantic relation (US & Canada)
Readings (57 pages)
•DEFRAIGNE, Jean-Christophe & NOUVEAU Patricia, Introduction à l’Economie Européenne, 3èmeédition, Ouvertures Economiques, De Boeck, Brussels ,2022, pp552-568
•DEFRAIGNE, Jean-Christophe, US industrial policy: The not-so-visible hand of the state and securingthe dominance of US prime movers, in DEFRAIGNE, Jean-Christophe, Traversa, Edoardo, Wouters Jan& Zustrassen Dimitri, Which EU industrial policy in the Multipolar Economy of the 21st Century?Edward Elgar, Cheltenham, ISBN: 978180037262, 2022, pp210-241.
Questions
1.How do you account for the rise of protectionism in the US since 2008?
2.What were the reasons behind the launching of the TTIP and why did it fail?
3.Outline the factors that generated a technological dependency of the EU vis-à-vis the US.
4.Analyse the negotiations and results of the CETA.
Lecture 12: the relation with China
Readings (90 pages)
•DEFRAIGNE, Jean-Christophe & NOUVEAU Patricia, Introduction à l’Economie Européenne, 3èmeédition, Ouvertures Economiques, De Boeck, Brussels, 2022, pp568-578.
•DEFRAIGNE, Jean-Christophe, China’s industrial policy: The visible hand of the party-state to catchup by any means necessary, in DEFRAIGNE, Jean-Christophe, Traversa, Edoardo, Wouters Jan &Zustrassen Dimitri, Which EU industrial policy in the Multipolar Economy of the 21st Century? EdwardElgar, Cheltenham, ISBN: 978180037262, 2022, pp242-269
•DEFRAIGNE JC: “China shakes the world: Challenges arising from shifts in the global balance ofpower” in “China, the EU and Global governance”, Eds Jean-Christophe DEFRAIGNE, PierreDEFRAIGNE, Tanguy de Wilde & Jan Wouters, Edward Elgar, Cheltenham, 2012 pp13-50
•DEFRAIGNE Jean-Christophe: « Chinese Outward Direct Investment in Europe and the control of theglobal value chain”, in the Asia Europe Journal, Springer, special issue on “China’s Rise and Europe’sResponse”, Asia Europe Journal, April 2017, pp1-16, Springer, Asia Eur J (2017)
Questions
1.Is China buying Europe? Analyse bilateral trade and investment flows between the EU and China.
2.Outline the main sources of economic tensions between the EU and China.
3.Why is China different from the rest of large emerging economies in the eyes of the EU and Europeangovernments?
4.What problems does the Chinese economy face in its technological catching-up of advancedeconomies?
Lecture 13: the relation with East Asia (Japan, ROK, ASEAN)
Readings (40 pages)
•DEFRAIGNE, Jean-Christophe & NOUVEAU Patricia, Introduction à l’Economie Européenne, 3èmeédition, Ouvertures Economiques, De Boeck, Brussels, 2022, pp578-582
•DEFRAIGNE Jean-Christophe & Pitakdumrongkit Kaewkamol, Economic Security, in Christiansen T.,Kirchner E, Tan, See S. (Eds) “The European Union Security Relations with Asian Partners”, PalgraveMc Millan, Basingstoke, ISBN 978-3-030-69966-6,2021, pp1-19
•CHRISTIANSEN Thomas, DEFRAIGNE, Jean-Christophe, Hiromasa Kubo, The Economic SecurityDimension in EU-Japan Relations, in Kirchner, E. and Dorussen, H. (eds) EU-Japan SecurityCooperation: Challenges and Opportunities, Routledge, London, 2018, pp1-17
Questions
1.What are the convergences and divergence in terms of commercial diplomacy objectives between theEU and its East Asian Partner?
2.Analyse the origins and the possible impact of the 2018 Japan-EU agreement?
Lecture 14 the relation with the BRICS and other large emerging economies
Readings (78 pages)
•DEFRAIGNE Jean-Christophe, L’impact des émergents sur l’Union européenne in Wintgens, Sophie &Zacharie, Arnaud, Le décentrage du monde : L’impact des émergents sur la gouvernance mondiale,Editions Le Bord de l’Eau/La Muette, Bruxelles, 2018, pp81-108
•DEFRAIGNE, Jean-Christophe & NOUVEAU Patricia, Introduction à l’Economie Européenne, 3èmeédition, Ouvertures Economiques, De Boeck, Brussels ,2022, pp 483-490, pp583-585
•DEFRAIGNE Jean-Christophe, The Eurasian Economic Union and the challenge of the BRI: acomparison of their respective impacts on economic development and Russia’s regional leadership,Eurasian Geography and Economics, Eurasian Geography and Economics, Volume 62, Issue 5-6, 2021,pp1-35
•DEFRAIGNE, Jean-Christophe, Les racines économiques de la guerre du Kremlin en Ukraine, Outre-Terre Revue européenne de géopolitique, Volume 63, forthcoming, pp1-9.
Questions
1.What are the causes of the rise of the emerging economies?
2.What are the possible impacts of this rise on global economic governance?
3.Are the BRICS a group capable of developing a coherent strategy?
4.What are the main divergences between the EU and the large emerging economies such as the BRICS,Turkey or Indonesia?
5.What are the structural causes for the tensions between the EU and Russia these last two decades?
PART FOUR : THE GLOBAL FINANCIAL AND MONETARY SYSTEM
Lecture 15 An overview of the international financial and monteray system from Bretton Woods to the 1990s
Readings (23 pages)
1.HELLEINER, Eric “The evolution of the International monetary and financial systems” inRAVENHILL, John Eds “Global Political Economy”, Oxford University Press, 2010, p199-222
Questions: no question this lecture
Lecture 16 the mechanisms behind financial deregulation
Readings (87pages)
HELLEINER, Eric: “States and the reemergence of global finance”, Cornell, 1995, pp81-168
Questions
1.What was the context that explains the success of the Bretton Woods conference?
2.How did the Eurodollars and Eurocurrencies markets destabilise the Bretton Woods system?
3.Why did the US and European governments allowed the relaxation of capital control?
Lecture 17. The EU and the rise of financial instability 1990-2008
Readings (100 to 127 pages) (choose one among these three options)
•KRUGMAN, Paul: “The return of Depression Economics”, Norton, New-York, 2000 chapitres 2-7,pp9-136.
•DEFRAIGNE, Jean-Christophe, Introduction à l’Economie Européenne, 3ème edition, , OuverturesEconomiques, De Boeck, Brussels, 2022, pp174-189 & RAJAN, Raghuram, Fault Lines, PrincetonUniversity Press, 2010, chapters 5 to 7 (included)
•TOOZE, Adam, Crashed, 2018, chapters 6 to 9 (included)
Questions
1.Explain the rise of financial crises in emerging economies in the 1990s?
2.Explain the origins of the subprime crisis
3.How did the subprime crisis evolved into a global financial crisis in 2008?
4.How did capital mobility and the interconnection of financial markets across the globe restrain the roomfor manoeuvre of government economic policy?
Lecture 18. The global financial and monetary since 2008
Readings (99 to 111 pages) (choose one among these two options)
• PRASAD, Eswar : “the Dollar Trap”, Princeton University Press 2014, pp11-122
• ANGELONI Ignazio, BÉNASSY-QUÉRÉ Agnes, CARTON, Benjamin , ZSOLT DARVAS, DESTAIS Christophe, PISANI-FERRY Jean , SAPIR André & VALLÉE, Shahin : “Global currencies for tomorrow: a European perspective”, CEPII BREUGEL, Brussels 2011, p1-99
Questions
1. Why didn’t the 2008 crisis generate a new Bretton woods?
2. How do you explain the resilience of the dollar despite the financial crisis in the US and why couldn’t the Euro replace it?
3. What are the risks generated by the new monetary policies of the largest Central Banks after 2008?
Lecture 19. The EU and tax evasion and money laundering
Readings (150 pages)
• SHAXSON, Nicholas: “Treasure Islands: tax havens and the men who stole the world” Vintage, Londres, 2011, pp8-165
• Press clippings & reports
Questions
1. Outline the role of the State in the development of tax havens.
2. What are the consequences of tax evasion and money laundering?
3. Is tax evasion being tackled at the EU or multilateral level?
PART FIVE : TECHNOLOGY, ENERGY & INDUSTRIAL POLICY
Lecture 20. The economics of industrial Policy & technology
Readings (10 pages)
• Defraigne, Jean-Christophe, Traversa, Edoardo, Wouters Jan & Zustrassen Dimitri, Which EU industrial policy in the Multipolar Economy of the 21st Century? Edward Elgar, Cheltenham, ISBN: 978180037262, 2022, pp13-23.
Questions
1. Outline the main rationale behind an Industrial Policy.
2. Outline the main tools of an Industrial Policy.
Lecture 21. EU Industrial Policy and its limits
Readings (68 pages)
• MAZZUCATO, Elizabeth, Mission-Oriented Research & Innovation in the European Union A problem-solving approach to fuel innovation-led growth, European Commission, Directorate-General for Research and Innovation, Brussels, pp 4-30
• GUINEA, Oscar& ERIXON, Fredrik: “Standing up for Competition: Market Concentration, Regulation, and Europe’s Quest for a New Industrial Policy », ECIPE 2019, pp 4-18
• DEFRAIGNE, Jean-Christophe, TRAVERSA, Edoardo, WOUTERS Jan & ZUSTRASSEN Dimitri, Which EU industrial policy in the Multipolar Economy of the 21st Century? Edward Elgar, Cheltenham, ISBN: 978180037262, 2022, pp1-13 & pp 24-39.
Questions
1. What is the purpose of mission based industrial policy?
2. What are the possible negative effects of a more interventionist EU industrial policy?
3. What are difficulties specific to the EU when it comes to developing an industrial policy?
Lecture 22. EU strategic autonomy, technology and security
Readings (44 pages)
• NOUVEAU Patricia, Falling behind and in between the United States and China: can the European Union drive its digital transformation away from industrial path dependency?in Defraigne, Jean-Christophe, Traversa, Edoardo, Wouters Jan & Zustrassen Dimitri, Which EU industrial policy in the Multipolar Economy of the 21st Century? Edward Elgar, Cheltenham, 2022, pp332-376
Questions
1. Outline the technological gap between the US and some other large economies
2. How does the EU define its strategic autonomy and is it different from other large economies?
Lecture 23. Energy Policy & Security in the EU
Readings (80 pages)
File Press clipping and reports
Questions: no question this lecture
PART SIX: THE EU & THE GLOBAL ENVIRONMENTAL CHALLENGES
Lecture 24. The environmental challenges
Readings (81 pages)
• IPCC, 2022: Summary for Policymakers, Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [H.-O. Pörtner, D.C. Roberts, M. Tignor, E.S. Poloczanska, K. Mintenbeck, A. Alegría, M. Craig,S. Langsdorf, S. Löschke, V. Möller, A. Okem, B. Rama (eds.)]. Cambridge University Press, Cambridge, UK, pp. 5–33.
• RAVENHILL, John Eds « Global Political Economy », Oxford University Press, 2008, chapters 14, pp388-413
• DICKEN, Peter : “Global Shift: reshaping the global economic map in the 21st century”, Sage publications, London, 2015, Chapter 9, pp354-382.
Questions
1. Outline the main results of the IPCC report of 2022
2. What are the environmental impacts of economic globalization?
Lecture 25. The EU responses and their limits (domestic policies)
Readings (70 pages)
• DEFRAIGNE, Jean-Christophe : « Introduction à l’Economie Européenne », Ouvertures Economiques, De Boeck, Brussels, 2017, pp398-404
• EUROPEAN COMMISSION: 'Fit for 55': delivering the EU's 2030 Climate Target”, European Commission, Brussels 2021, pp2-15
• EUROPEAN COMMISSION, Next generation EU green bond framework, European Commission, Brussels 2021, pp1-22
• CORPORATE EUROPE OBSERVATORY “A grey deal? Fossil fuel fingerprints on the European Green Deal”, Brussels, July 2020, pp1-21
• CORPORATE EUROPE OBSERVATORY: « Big Oil and Gas buying influence in Brussels, Brussels, October 2019” pp1-11
Questions
1. Is the Green Deal more than an exercice greenwashing? Discuss
Lecture 26. The EU responses and their limits (multilateral policies)
Readings (96 to 110 pages) (choose one among these three options)
• ADELLE, Camilla Adelle, BIEDENKOPF, Katia TORNEY Diarmuid (Eds), “European Union External Environmental Policy: Rules, Regulation and Governance Beyond Borders”, Palgrave, McMillan, 2018, pp1-101 & RIFKIN, Jeremy - Can a Green New Deal Save Life on Earth?, Science Pô, Paris April 2020, https://www.youtube.com/watch?v=11LJBsTugWo
• TANURO, Daniel, Green Capitalism : Why it can’t work, Fernwood Publishing, 2014, pp30-126
Questions
1. Is the multilateral framework to tackle climate change working?
2. Is Green sustainable capitalism a chimera?

Faculty or entity

CLSM