||Volumes of trade between the European Union and China have increased tremendously over the last decades, with the EU becoming China`s largest trading partner. Among the academic world there are serious concerns about the impacts of trade on national environmental regulation setting. There is fear that international trade will not only put advanced nations under strong competitive pressure to lower their environmental standards in order to stay competitive (race to the bottom) but also provide developing nations no incentives to strengthen their environmental protection measures as this would carry costs and reduce their global competitiveness (stuck at the bottom). In contrast to that believe, some scholars, such as David Vogel, argue that engaging in international trade can – under certain assumptions – result in tighter national regulation setting among trading partners (trading-up).|
This study sets out to analyze the linkage of trade and environmental standards between two major trading powers – the EU and China. China`s integration with the world economy has spurred concerns among environmentalists as it was feared that the country`s national environmental regulatory system will be kept at low levels due to competitiveness considerations. However, China, the opposite can be observed. The EU has adopted strict environmental directives in several areas, and China has upgraded its environmental regulatory system. This study aims to find answers to the question if in the case of trade between the EU and China a situation of trading-up can be identified. In order to bring in domestic as well as international developments, the study applies a two-level games approach. The research is based on recent environmental directives that have been adopted by the EU. A selection of three directives forms the basis of the case studies: the Restriction of Hazardous Substances (RoHS), car emissions standards, and the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH). The study provides insights into how China is affected by these external regulations, how it responded to them and how it tries to utilize them to boost its economic development and enhance the quality of its environment.
As the study reveals, European environmental directives have positive impacts on China`s national environmental regulatory setting processes, since the EU regulations not only raise the awareness of the issue among China`s policy makers and public interest groups
but they also called for responses from affected domestic constituents. The external regulations raised the stakes of numerous domestic actors which then had to decide how to react adequately. All in all, the study concludes that EU environmental directives have worked in favor of stricter regulation setting in China.