A comparative analysis of free trade between the U.S. and the EU: A case study of the U.S./Chile FTA and the EU/Chile FTA

Unlike many studies that assess the impacts of free trade agreements (FTAs), this thesis is a study of the negotiated outcomes in FTAs between the United States (U.S.) and Chile, and the European Union (EU) and Chile. Existing negotiation literature pertains to multilateral trade talks, dispute settlements or bilateral one good trade agreements. Studies regarding the negotiation process and other factors influencing outcomes in comprehensive FTAs are rare. In order to address this gap in the literature, this thesis is an analysis of how and why the FTA between Chile and the U.S. differs from the FTA between Chile and the EU, in particular with regards to sensitive agricultural goods. As the two agreements were negotiated and implemented within similar time frames, and thus a similar political and economic environment within Chile, it is possible to use the theory-testing method of difference case study approach. This framework helps to test the validity of one leading theory of economic negotiations posited by Odell. Moreover, any shortcomings in the applicability of Odell's theory to these specific negotiations can be ascertained using this methodology. Odell's theory postulates that negotiated outcomes are a result of market conditions, domestic politics, and negotiator beliefs and strategies. In addition to causality in FTA negotiations, the case study will ascertain how the U.S. and the EU differed in their approaches to negotiating free trade. Conclusions drawn from this study include that there are varying degrees of sensitivity in agriculture which result in special and specific negotiated outcomes. Furthermore, the U.S. and the EU differ in their approaches to free trade which inevitably affects negotiated outcomes. Overall, Odell's theory is a competent basis for understanding these FTA negotiated outcomes. Additional theoretical understanding of the impact of the institutional considerations in the negotiation process and existing domestic policies could however add to the comprehensiveness of this theory.