On 31 January 2023, the Council presidency initiated negotiations with the European Parliament on the revised Generalised Scheme of Preference (GSP). The GSP is a preferential tariff system that provides duty-free access to the European Union (EU) market for least developed countries and reduces customs duties on two-thirds of tariff lines for low- and lower-middle-income countries. The EU is currently revising the scheme to adapt it to current global and economic challenges. Negotiations have proven to be challenging, primarily due to a proposal from the Commission to link the GSP benefits to cooperation on the readmission of a country’s own nationals (COM(2021)579, Article 19). MEPs from the Committee on International Trade strongly opposed the proposal, stating that it is unfortunate that the “Council has decided to hijack this trade and development tool and put it to the service of its migration objectives”. Given the Parliament’s firm opposition, it seems probable that the proposal will not make it into the final draft.
However, it is not uncommon for the EU to leverage its market power to drive domestic policy changes within its trading partners. It has done so in the past by linking trade to non-trade issues, making access to the EU market conditional on compliance with specific normative standards, such as labour rights and development commitments (Meunier & Nicolaïdis, 2006). For example, the GSP has a special incentive called GSP+ which provides duty-free access to low- and lower-middle-income countries, which is typically reserved for the least developed countries. As laid out in Articles 15 and 19 of the GSP Regulation (Regulation (EU) No 978/2012), a country seeking to benefit from the GSP+ must ratify and effectively implement 27 international conventions on human rights, labour rights, the environment and good governance. Besides promoting normative standards, the EU has also been successful in leveraging its market power to address other challenges, such as security issues (Ariel & Haftel, 2021).
This type of conditional access is typically framed as positive, or incentive-based, conditionality. It rewards compliance and stimulates cooperation through incentives. Such conditionality is generally positively received as it is perceived to be mutually beneficial. By contrast, the Commission’s proposal to make the GSP benefits conditional on countries accepting the return of their nationals is widely seen as negative, or sanctions-based, conditionality. The proposal would allow the EU to temporarily withdraw preferential market access as a form of sanction if it deems the partner country’s readmission cooperation insufficient. This approach has faced opposition because, rather than being mutually beneficial, readmission is seen as primarily benefiting the EU, as the main route of return is from Europe to the rest of the world (Stutz & Trauner, 2020).
Although migration has emerged as one of the most important priorities in the EU’s external relations, and controlling irregular migration and readmission being included in the European Commission’s priorities for 2019-24, the EU has not addressed these challenges through trade conditionalities. While the EU has incorporated readmission clauses into agreements that also stimulate trade, such as in its Stabilisation and Association Agreements with Albania, Bosnia and Herzegovina, North Macedonia, Montenegro and Serbia, these clauses are not enforced by trade sanctions in cases of non-compliance. Rather, the EU has relied on incentive-based conditionalities such as visa facilitation linked to the European Union Readmission Agreements (EURAs) (Lavenex, 2023). However, research suggests that the impact of EURAs on actual readmission rates has been overstated, as readmission rates tend to reflect broader regional dynamics rather than being directly influenced by the incentive-based agreements themselves (Stutz & Trauner, 2020).
Apart from the EURAs, there has been one notable outlier: the Samoa Agreement between the EU and the Organisation of African, Caribbean and Pacific States, which does include sanction-based conditionality linked to readmission commitments. Article 74 of the Partnership Agreement contains a detailed description of return and readmission procedures, under which both parties agree to return illegally staying immigrants. Notably, paragraph 4 of Article 74 permits the parties involved to take “proportionate measures” if either fails to comply with the readmission obligation. What these “proportionate measures” will effectively entail in the future remains unclear, as public information on whether the measure has been used is scarce. This raises an important question: if incentive-based instruments have largely proven ineffective, and the EU has demonstrated a willingness to use sanction-based leverage in other areas, why has it not leveraged its market power to enforce readmission cooperation?
It is not because of a lack of awareness; on the contrary, leveraging EU market power to advance its migration agenda has been part of the discussion since the start of EU migration cooperation (Lavenex, 2002). Even before the EU gained competence in the area of migration with the Treaty of Amsterdam, the Justice and Home Affairs Council considered leveraging the EU’s development and economic cooperation to influence the migration policy of third countries (Coleman, 2009; 20). However, since the beginning, there has also been opposition that has prevented the EU from mobilising its market power to externalise its migration policy. For example, at the 2002 Seville European Council meeting, then Prime Ministers Blair and Aznar proposed enforcing readmission obligations through trade and development sanctions, however, this proposition was met with strong French opposition that feared the consequences of such sanctions for their former colonies. President Jacques Chirac’s spokeswoman, Catherine Colonna, stated that economic sanctions would only aggravate the migratory flows and thus be counterproductive to the main goal of stopping irregular migration. Instead of sanctions-based conditionality, the Council opted for implementing an incentive-based conditionality, such as the Visa Facilitation Agreements (Lavenex, 2023).
Furthermore, another major factor is the general opposition within the EU to linking trade policy with non-trade issues. Market power can be exercised in two distinct ways: to advance economic interests, referred to as ‘power in trade,’ or to promote broader objectives, such as normative aims and non-trade issues, referred to as ‘power through trade’ (Meunier & Nicolaïdis, 2006). Within the EU, there are interest groups that are mainly focused on stimulating trade and thus prefer ‘power in trade’ and wish to refrain from issue-linkage (Ariel & Haftel, 2021). DG Trade, in particular, has been reluctant to cooperate to establish ‘power through trade’ (Christou & Damro, 2024). Perhaps it is therefore no surprise that the largest opposition to the Commission proposal comes from the Committee for International Trade. The Committee’s framing of the Commission’s proposal as a “hijacking” of trade and development tools for migration objectives reflects this broader institutional scepticism toward issue-linkage.
In addition to the internal opposition, the rules of the World Trade Organization (WTO) also limit the EU’s ability to leverage its market power in the manner proposed by the Commission. The WTO rules outline under which circumstances preferential treatment may be granted to developing countries. Paragraph 3 of the WTO Enabling Clause explicitly states that such preferences must address the development, financial, and trade needs of the recipient countries. Legal opinions suggest that the Commission proposal fails to meet these criteria, thus raising legal concerns (Vidigal, 2023).
Taken together, these factors suggest that the EU is unlikely to make market access conditional on readmission obligations anytime soon. Before the Commission’s proposal was voted down in Parliament, the concern was raised that the EU’s migration approach was shifting towards sanction-based conditionality. Now that the proposal has been rejected, that shift seems to have stalled. Whether the Samoa Agreement will change this remains to be seen. If it proves effective, there may be a renewed push for sanction-based conditionality in the future, but for now, that shift appears to have been halted.
Benoit Pols is a Master’s student in International Relations, specializing in European Union studies at Leiden University.