Deciphering Veto Threats: EU Trade Policy Post-Lisbon

Since the implementation of the Lisbon Treaty, the European Parliament (EP) wields formal veto powers over international (trade) agreements and thus holds the potential to threaten to veto. Due to the high financial and reputational costs of vetoes, the European Commission was expected to read and react to these threats effectively. However, the Commission’s responses to such threats have varied from re-opening concluded agreements to appeasing the EP. Building on a fine-grained causal mechanism derived from Information Processing Theory and an extensive process-tracing analysis of seven free trade agreements post-Lisbon, we explain why the Commission has responded differently to veto threats by the European Parliament. Our analysis reveals that the variation in Commission responses derives from the centrality of an information-processing system, an ‘early warning system’, that had to be adapted to the new institutional equilibrium post-Lisbon. Because of this adaption process, factors exogenous to the parliamentary context (“externalities”) as well as internal uncertainties (“internalities”) add constant unpredictability to the Commission’s reading of the Parliament.