Report by Maximilian Rech on the 20th Shanghai Social Studies Colloquium 
Since 2013, the “Shanghai Social Studies Colloquium” (SSSC) has become a regular forum of exchange on interdisciplinary issues of current interest in EU-Asia relations. For its 20th edition, held on 22 November 2017, ESSCA School of Management welcomed Matthew Castle, PhD Candidate and Research Assistant at McGill University, for a talk about his research on negotiation and formulation of trade agreements. When the EU revised the investment clauses of its recent trade deal with Canada, the Comprehensive Economic and Trade Agreement (CETA), it was widely believed that the amendments were motivated by concern over the design of another, yet-to-be-signed agreement with the United States: the Transatlantic Trade and Investment Partnership (TTIP). There is no formal link between those two agreements, and academic literature generally sees preferential trade agreements (PTA) as products of signatories’ bilateral relations. Matthew Castle challenged this view and discusses the evolution of global trade rules. He questioned the conventional narrative about why countries sign trade agreements and how innovative rules emerge. He argued that existing agreements create precedents that shape the design of subsequent agreements and negotiators are taking the future into account by sequencing the agreement, exploiting the agreements with less important trade partners in order to establish templates that they can use in the future. The process is based on an observation of ‘stickiness’ of the legal language. Matthew Castle argued that trade rules are ‘copy-pasted’ from one agreement to another, and the power of precedent in agreement design and the ‘stickiness’ of legal language creates incentives for states to be strategic in their choice of partner, signing innovative agreements with less important economic partners first in order to increase the odds of achieving their ideal outcome with more important partners. A very revealing case in point is for instance a currency chapter in the new North American Free Trade Agreement (NAFTA), that is meant to commit the members to avoid manipulation or competitive depreciation and encompass a simple definition of manipulation to identify violators of that commitment. However, neither Canada or Mexico have ever been accused of currency manipulations in order to gain advantage in trade. This chapter can be seen as an attempt to create a precedent that the US can exploit in the future negotiations with China or Japan, the countries that have faced accusations of currency manipulations. The evidence presented in Matthew Castle’s research suggests that those states that are most likely to sequence agreements are states that not only have a concern for the content of global rules, but also the ability to translate that concern into action. Sequencing enables states to promote the adoption of their preferred trade rules, this would suggest that powerful states continue to benefit most from it. ESSCA Shanghai was delighted to welcome such a fascinating talk for it’s 20th SSSC, and looks forward to organising further editions of this original event of quality research dissemination.
