Social standards in trade agreements and free trade preferences: An empirical investigation

The Review of International Organizations - Free trade generates macroeconomic gains but also creates winners and losers. Historically, to reconcile this tension, governments compensated...     

Environmental aspects in free trade agreements in the Asia-Pacific region

The trade and environment interface has become a topic of growing importance. Until the early 1990s, the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organisation (WTO), were the major forums to address the relationship between trade and the environment. Significant progress in this area has not yet been made. Since the 1990s, environmental issues have been addressed by the North American Free Trade Agreement (NAFTA) and in recent times by trans-regional and bilateral free trade agreements (FTAs) such as the Trans-Pacific Strategic Economic Partnership Agreement (SEP), the U.S.–Singapore FTA (USSFTA), the Canada–Chile FTA or the New Zealand–Thailand Closer Economic Partnership Agreement (CEP). Not only questions on the effectiveness of FTAs in global and regional environmental governance arise but also on the various actors involved in these negotiations. The question here is whether the integration of environmental issues in FTAs is a top-down approach, leaving the negotiations and implementation of environment cooperation frameworks in the hands of governments, or whether environmental arrangements are the result of a multi-stakeholder dialogue, consequently committing governments, the private sector and civil society to the objective of making trade and environmental policies mutually supportive. This article seeks to address these questions by analysing environmental issues and stakeholder participation in the Asia-Pacific Economic Cooperation (APEC), the Trans-Pacific SEP and the New Zealand–Thailand CEP.

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Free trade agreements and vertical-specialisation in East Asia

Regional integration in East Asia has been described as ‘market-led’ integration driven by the activities of multinational corporations creating vertical specialisation. This paper investigates the effect of free trade agreements (FTAs) on vertical specialisation-based trade by employing a gravity estimation for a sample of nine East Asian countries plus the US. We find that FTAs promote international trade based on vertical specialisation and enhances deep integration between countries. The FTA effect on vertical specialisation-based trade increases with pre-agreement vertical linkage level, that is, the deeper the real integration between countries the larger the FTA impact. The results of this paper also suggest that deeper economic integrations, such as currency unions, will enhance trade based on vertical production by reducing the risk of exchange rate volatility.

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Intellectual property provisions and support for US trade agreements

Intellectual property rights are a key piece of the expanded trade agenda, and the United States has pushed hard to strengthen protections beyond WTO standards in its trade agreements. While agreement provisions governing intellectual property are commonly thought to be an important driver of corporate preferences over US trade policy, systematic empirical evidence for this proposition, especially in comparison to other determinants of trade policy, is generally lacking. To fill this void, this paper examines variation in reliance on intellectual property across US industries to explain attitudes and lobbying on US trade agreements. The effects of IP provisions on support for US trade agreements are politically substantial, though trade remains the primary determinant of preferences over trade agreements.     

Asia-Pacific regionalism and preferential trade agreements: the Australian case

Since the late 1990s, many developed states and customs territorieshave been seeking out preferential trade deals. This articleexamines this trend, which has been especially evident in theAsia-Pacific, and focuses specifically on Australia as a leadingexponent of preferentialism in the region. The article has twodistinct aims. First, to shed light on the thinking behind Australia'sforeign economic policy and, specifically, to examine the motivationsfor moving away from multilateral and non-discriminatory meansof advancing its free trade agenda in the region. Second, itaims to examine the developing dynamics of regional economicco-operation in the Asia-Pacific given the stasis of existinginstitutional efforts. This paper begins with a brief examinationof the regional context and Australia's approach to trade policy.It then considers the nature of Australia's preferential bilateralismand its aims and motivations. The article shows that Australianpolicy-makers believe that preferential agreements can providetrade creation through market access, as well as broader benefitswhich derive from market expansion. Australia is motivated topursue preferentialism by concern about existing institutions,by the technical appeal of bilateral agreements, and by thebroader trend toward preferentialism in the international system,as well as shifts in its own domestic politics. The paper concludeswith a short examination of the character of regionalism inthe Asia-Pacific in the light of burgeoning regional bilateralism.     

The impact of preferential trade agreements on governmental repression revisited

Previous research suggests that most treaties are ineffective in ensuring countries’ compliance with human rights standards. It has been argued, however, that preferential trade agreements (PTAs) including ‘hard’ human rights standards can withhold economic benefits and, thus, can have a real potential to substantially reduce human rights violations. The following article questions this as existent work on the effects of PTAs on human rights standards neglects a selection process underlying the implementation of these treaties. Countries being aware of the ‘shadow of the future’ already take into account what may happen at the succeeding enforcement stage when establishing a particular PTA. This implies that states agree on ‘hard’ human rights standards in PTAs only if they have a general propensity to abide by human rights in the first place. For testing the empirical implications of their argument, the authors collected new data on PTAs in 1976/77-2009, and employ genetic matching techniques. The results support the theoretical argument that PTAs are unlikely to affect human rights compliance when controlling for the outlined selection problem.     

The design of international trade agreements: Introducing a new dataset

Preferential trade agreements (PTAs) have been proliferating for the last twenty years. A large literature has studied various aspects of this phenomenon. Until recently, however, many large-N studies have paid only scant attention to variation across PTAs in terms of content and design. Our contribution to this literature is a new dataset on the design of trade agreements that is the most comprehensive in terms of both variables coded and agreements covered. We illustrate the dataset’s usefulness in re-visiting the questions if and to what extent PTAs impact trade flows. The analysis shows that on average PTAs increase trade flows, but that this effect is largely driven by deep agreements. In addition, we provide evidence that provisions that tackle behind-the-border regulation matter for trade flows. The dataset’s contribution is not limited to the PTA literature, however. Broader debates on topics such as institutional design and the legalization of international relations will also benefit from the novel data.     

Trade at the margin: Estimating the economic implications of preferential trade agreements

Preferential Trade Agreements (PTAs) have become the most prevalent form of international trade liberalization in recent decades, even though it remains far from clear what their effects on economies and their key units, firms, are. This paper evaluates the distributional consequences of trade liberalization within industries differentiating two distinct aspects in which trade liberalization could result in higher trade flows: the intensive vs. the extensive margin of trade. In particular, we analyze whether trade liberalization leads to increased trade flows because either firms trade more volume in products they have already traded before (intensive margin) or because they start to trade products they have not traded previously (extensive margin), or both. We test these arguments for the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR) and exporting firms based in Costa Rica for the time-period 2008–2014. The results of our study suggest that the effects of CAFTA-DR depend not only on whether we analyze the extensive versus the intensive margin of trade but also whether the product in question is homogenous or differentiated and whether the exporting firm under analysis is small or large. In particular, we find support for the theoretical expectation that firms exporting heterogeneous products, such as textiles, gain from trade agreements, such as CAFTA-DR, in that they can export more varieties of their products. Yet at the same time, they tend to lose at the intensive margin by a reduction in their trade volume while the opposite pattern occurs for firms exporting homogenous products.     

Protecting labor rights in preferential trade agreements: The role of trade unions,left governments,and skilled labor

This paper investigates variation in the design of labor provisions in preferential trade agreements (PTAs) by focusing on the power of trade unions, the role of government partisanship, and the relative strength of skilled labor. We expect strong trade unions and left-leaning governments to be associated with more, and more far-reaching labor provisions in PTAs. We also expect the strength of skilled workers relative to the strength of unskilled workers to negatively correlate with the depth of labor provisions in PTAs. In addition, the effect of trade unions should be conditional on both the presence of left government and democracy. We test these hypotheses relying on an original dataset of labor provisions included in 483 PTAs signed between 1990 and 2016. This dataset covers 140 different labor provisions that relate to six overarching dimensions. The quantitative analysis finds support for the expectations concerning the influence of trade unions and the role of a country’s skill profile.     

Good for some,bad for others: US investors and non-trade issues in preferential trade agreements

Preferential trade agreements (PTAs) trigger investment through their commitment to a liberal market economy. Increasingly however, PTAs go far beyond liberalizing trade and investment flows. Especially controversial features included in most modern PTAs are environmental and labor standards. Do these standards affect business activity? If so, how do investors react to such non-trade issues in trade deals? The literature provides inconclusive findings about the impact of standards on foreign direct investment (FDI). Some contributors argue that strict standards decrease FDI, whilst others claim that environmental and labor protection increases productivity and, in consequence, inward investment. In all likelihood, the usage of aggregated FDI data, as is the case for most studies, causes confusion. I expect standards to influence investors’ decisions – but heterogeneously across sectors. Environmental and labor standards should reduce FDI in polluting and low-skilled labor endowed industries, but increase investment in environmentally clean and high-skilled labor abundant sectors. Based on an original dataset of environmental and social standards in trade agreements and at the sector-level disaggregated US-FDI data, I find robust support for my argument. The paper provides a more nuanced picture on the standards and investment nexus: Standards have no uniform effect on multinationals. Instead, they are good for some, but bad for other industries.     

Austria and European integration, 1947-60: Western orientation, neutrality and free trade

The purpose of this paper is to analyze Austria's role in the early days of European integration. This includes the attempt to find a European solution to the South Tyrol problem and the first steps towards the economy's Western orientation, that is, Austria's participation in the Marshall Plan, its OEEC and EPU memberships as well as its relationship with the Council of Europe and the ECSC. International relations determined Austria's room for manoeuvre in its efforts to obtain independence. This excluded EEC membership. The Ballhausplatz was thus striving for a European Free Trade Area. The role of the political parties are also covered in this paper. A further objective is to examine Austria's integration policy and the contrasts between the situation in Austria and West Germany. The paper points out how this small European state tried to avoid its exclusion from the European integration process and how it applied various methods to approach and cooperate with European institutions.     

Responding to Our Peripheral Security Challenges

Current challenges to the security in China＇s surrounding areas, the ＇strategic belt for China＇s ascendance, can be characterized as follows：     

东北亚核不扩散面临的挑战

东北亚地区核武器扩散形势严峻。朝核危机加剧,核大国核军备竞赛势头难以遏止,对东北亚的安全与稳定构成严重挑战。美国强化核威慑战略、谋求绝对战略力量优势是地区核扩散形势加剧的主因。中国一贯反对核军备竞赛和核扩散行为,是维护东北亚地区和平与安全的坚定力量。