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.     

Challenges to multilaterism free trade agreements

The establishment of free trade took place in the late 18^th and 19^th centuries and, after the Second World War, international trade through trade liberalisation gained increased importance. International organisations such as the General Agreement in Tariffs and Trade (GATT) and the present World Trade Organisation (WTO) were then established to provide the institutional framework for a system of rights and obligations for trade in goods and services between countries. Nations worldwide are currently promoting trade liberalisation using various ways, multilaterally, regionally or bilaterally.     

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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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...     

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.     

人权还是知识产权:美国对华政策的一个重要转折

克林顿政府初期处于对华政策的十字路口。冷战结束,美国全面调整对外政策,把经济放到对外战略的首位,知识产权问题凸现。而对华政策背离这一主旨,把人权作为首要目标,并与最惠国待遇问题挂钩。这种矛盾决定其必然改弦更张。以经贸为立足点的接触政策的确立,使知识产权问题再次回到中美关系的中心,美国经历了对华政策的一次重要转折。     

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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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.     

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.     

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.     

Cosmetic agreements and the cracks beneath: ideological convergences and divergences in US and EU democracy promotion in civil society

This piece examines the substance of EU democracy promotion from a comparative point of view and from a perspective placing under inquiry the meaning of the idea of liberal democracy itself. Instead of assuming that the democratic ideal that the EU promotes (‘liberal democracy’) has a clear, fixed meaning, the article examines in detail what actually constitutes the ‘ideal of democracy’ at the heart of EU democracy promotion, and compares this vision to that which informs the democracy promotion of the US. It argues that interesting differences, and shifts and oscillations, in the models of liberal democracy that the EU and the US promote exist and that these are important to note in order for us to fully appreciate how the substance of EU and US democracy support can be shaped by conceptual and ideological debate on the meaning of democracy. This dynamic is particularly relevant today, in the context of the recent attempts to develop transatlantic dialogue on democracy support. This dialogue, it is suggested, plasters over some subtle but important ideological cracks over what is meant by democracy in EU and US democracy support.     

Foreign policy begins at home: the local origin of support for US democracy promotion

ABSTRACT

Citizens hold opinions about what kinds of foreign policy their government should pursue. Because foreign policy often has geographically specific domestic consequences, we expect opinions to vary with the locality of its impact. In this article, we examine whether individual support for US foreign policy to promote democracy abroad depends on exactly where the policy’s domestic impact will occur. We expect individuals to favor policies that bestow local benefits while opposing those that impose local costs. Accordingly, we argue that support for proposed democracy aid grants will be higher when such aid benefits local firms and organizations. Conversely, we expect that opposition to proposed economic sanctions in the form of development aid cuts will be higher when the associated domestic costs stemming from lost jobs fall locally. Using the results from an original survey experiment, we find evidence that a positive local impact of aid increases support for and reduces opposition to democracy promotion, while a negative local impact of sanctions reduces indifference and increases opposition to punitive policy in the case of democratic backsliding.     

Optimal transfers and participation decisions in international environmental agreements

The literature on international environmental agreements has recognized the role transfers play in encouraging participation in international environmental agreements. However, the results achieved so far are overly specific. Therefore, we develop a more general framework that enables us to study the role of transfers in a systematic way. We propose transfers using both internal and external financial resources for making “welfare optimal agreements” self-enforcing. To illustrate the relevance of our transfer scheme, we use a stylized integrated assessment simulation model of climate change to show how appropriate transfers may induce almost all countries into signing a self-enforcing climate treaty.      

Think globally,buy locally: International agreements and government procurement

Do international treaties constrain national governments? The answer appears to be “yes” when it comes to the use of traditional barriers to trade, such as tariffs. Yet, while many governments have cut tariffs to comply with international agreements, they have often raised non-tariff barriers in their place. One increasingly prominent non-tariff barrier is discrimination in public procurement. Governments frequently discriminate against foreign suppliers in favor of domestic ones when buying goods and services. In an attempt to reduce procurement discrimination, international organizations, such as the World Trade Organization, have devoted ever more attention to members’ procurement practices. Additionally, a growing number of preferential trade agreements seek to regulate public procurement. It remains unclear, however, whether international rules are effective in changing governments’ purchasing behavior. Using original data, we find that neither multilateral nor preferential procurement agreements substantially reduce governments’ propensity to “buy national.” These results illustrate the difficulty of regulating non-transparent policy areas via international treaties.     

浅析美国《网络空间国际战略报告》

今年5月16日,美国白宫公布了奥巴马政府任内首份《网络空间国际战略报告》（International Strategy for Cyberspace,以下简称《报告》）,①这也是美国政府首次就美国的网络空间政策以及未来发展趋势出台评估报告。《报告》的公布引起了国际社会的广泛关注。     

美国对印度的政策与美印关系

布什政府上台以来,更加重视印度在地缘政治、经济潜力以及在亚太安全中的作用,称印度为美国的“天然盟友”,美印关系明显发展。由于两国关系存在一些重大制约因素,双方关系发展有一定限度。