What Kinds of Trade Liberalization Agreements Do People in Developing Countries Want?

One of the most striking developments in the global economy in the past decades is the rapid proliferation of preferential trade agreements (PTAs), with many of them concluded among or with participation of developing countries. On the presumption that current popular debates on trade policy are not so much about whether citizens want free trade but rather what kinds of trade liberalization they want, we examine individual trade policy preferences with regard to PTAs that can vary in content along several dimensions. To that end we carried out conjoint choice experiments embedded in representative surveys in three developing countries that differ strongly in income levels, political system, and trade liberalization history: Costa Rica, Nicaragua, and Vietnam. We conceptualize trade policy preferences as preferences over the scale and scope of trade liberalization, environmental and labor standards, and labor market access (migration). Two main findings emerge. First, non-economic considerations, such as sympathy/antipathy toward particular countries and environmental and labor rights concerns influence citizens’ preferences at least as much as factors based on standard economic logic. Second, preferences over particular facets (attributes) of trade liberalization, that is PTA content, are surprisingly consistent across countries, despite strong differences in macro-economic and political context.     

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。     

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.     

Early American Views Regarding European Unification

This article examines the origins of US foreign economic policy in the post-1945 period and the major challenges posed to US policy by European economic integration and the establishment of a multilateral trade regime. US post-war economic planning began in the early stages of World War II. The US promoted bilateral trade agreements based on reciprocity and most-favoured-nation principles. During the war, US policy makers debated the merits of various plans to provide economic and financial assistance to Europe based on the assumption that Nazi Germany would be defeated. The plans for economic reconstruction of Europe were made under the premise that US economy would benefit from the creation of export markets in Europe. However, US policy makers were also concerned that the creation of a unified European market could potentially constitute a challenge to US economic hegemony and perhaps a political threat should Europe fall under another tyrannical regime. US policy therefore pursued twin tracks: it promoted economic reconstruction and integration in Europe; at the same time, it facilitated the establishment of an international trading regime that would promote principles of liberalised trade, support US economic growth and contribute to the development of a free enterprise capitalist trading system. This article illustrates that US economic planners in the 1940s were aware of the benefits and risks of European economic integration, seeking to balance European economic reconstruction with the establishment of a robust multilateral trading system.     

Seal the Deal: Bargaining Positions,Institutional Design,and the Duration of Preferential Trade Negotiations

Multilateral negotiations at the World Trade Organization have stalled. This has contributed to a steep rise in preferential trade agreements (PTAs). At the same time, negotiations for PTAs have not always proven quick and painless: While some treaties are sealed within a few months or days only, other agreements are preceded by protracted bargaining processes in trade and trade-related issue areas. In this article, we provide a theoretical explanation for this empirical variation. More specifically, we argue that PTA negotiations take longer the greater the distance between the prospective partners’ initial bargaining positions. Moreover, we contend that negotiation processes become more protracted the higher the relative ambition of the prospective PTA. Due to the limited links to the domestic political arena in autocracies, we expect this latter effect to play out for groups of democratic bargaining partners only. We test these two hypotheses for 198 preferential trade negotiations using novel measures for bargaining templates and the ambition of PTA clauses. In our two-stage survival models, we find support for our argument. In line with qualitative evidence from recent preferential trade initiatives, our models indicate that services, investment and intellectual property rights are particularly sticky agenda items for democratic leaders at the international bargaining table.     

The Electoral Salience of Trade Policy: Experimental Evidence on the Effects of Welfare and Complexity

Why do some trade policies become electorally salient while others do not? While much of the literature argues that citizens act as a domestic constraint in the formation of trade policy, a general consensus has emerged that trade is most often a nonsalient issue among voters. This poses a paradox. On the one hand, trade models hinge upon voters’ rational self-interest and preferences for varying levels of protectionism to keep their governments accountable. On the other hand, the conditions by which trade becomes salient to these very voters in the first place are both undertheorized and untested. Using experimental evidence, I argue that two dimensions of a trade policy affect the likelihood of that issue becoming electorally salient. First, policies with large welfare effects should be more salient. Second, more complex issues should be less salient because such agreements are more likely to obfuscate an individual’s ability to discern its effects. I find support for my hypotheses that a trade policy’s salience tends to increase with the magnitude of its welfare effects and decrease with its complexity.     

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.     

The choice for multilateralism: Foreign aid and American foreign policy

Why do governments choose multilateralism? We examine a principal-agent model in which states trade some control over the policy for greater burden sharing. The theory generates observable hypotheses regarding the reasons for and the patterns of support and opposition to multilateralism. To focus our study, we analyze support for bilateral and multilateral foreign aid giving in the US. Using new survey data, we provide evidence about the correlates of public and elite support for multilateral engagement. We find weak support for multilateralism and deep partisan divisions. Reflecting elite discourse, public opinion divides over two competing rationales—burden sharing and control—when faced with the choice between multilateral and bilateral aid channels. As domestic groups’ preferences over aid policy diverge from those of the multilateral institution, maintaining control over aid policy becomes more salient and support for multilateralism falls.     

The Trans-Pacific Partnership: Defence,Industry and Strategy

The Trans-Pacific Partnership, if ratified by all parties, is likely to have ramifications for the global defence market and the US’ economic and political strategy towards the Asia-Pacific region. Although the TPP excludes a number of defence-related issues such as defence procurement, the TPP’s provisions on technology transfers and intellectual property rights could bolster the US’ military-technology relations with the Asia-Pacific. For Europe, which is excluded from the Partnership, the likely impact of TPP is uncertain and could raise important challenges and opportunities related to Europe’s own defence-industrial relations with the Asia-Pacific and its wider security role in the region.     

Trade and investment: Introduction to the special issue

This special issue focuses on a variety of political-economy questions on trade and investment and is guided by a shared understanding that trade and investment processes can no longer be studied in isolation from each other. Three articles provide new insights into the study of the design of preferential trade agreements and effects thereof, two of which focus on the politically salient issues of non-trade concerns. A third one investigates which export sectors win from improved market access opportunities, in order words, how gains from trade are distributed. Two articles study the World Trade Organization’s dispute settlement system. One contribution is unpacking the role of the most important and influential firms and investors in affecting US behavior in WTO disputes, a second contribution studies how leadership changes in democracies and autocracies have different effects on dispute behavior. Finally, the special issue includes a new study on how the shadow economies in developing states are affected by the integration into the world economy (trade and investment) and by policy programs of the International Monetary Fund.     

奥巴马的“新政”及美国对华政策走向

奥巴马以倡导“新政”当选美国总统。美国长期奉行的经济自由主义政策将会终结；单边主义外交政策将会被多边主义取代。奥巴马政府的经济政策可能会在经贸、汇率、环境、知识产权以及人权等问题上给中国造成压力；多边主义外交将增加中美磋商与合作的机会。奥巴马“新政”下的中美建设性合作伙伴关系将会继续发展。     

Why do some international institutions contain strong dispute settlement provisions? New evidence from preferential trade agreements

To understand why some international institutions have stronger dispute settlement mechanisms (DSMs) than others, we investigate the dispute settlement provisions of nearly 600 preferential trade agreements (PTAs), which possess several desirable case-selection features and are evoked more than is realized. We broaden the study of dispute settlement design beyond “legalization” and instead reorient theorizing around a multi-faceted conceptualization of the strength of DSMs. We posit that strong DSMs are first and foremost a rational response to features of agreements that require stronger dispute settlement, such as depth and large memberships. Multivariate empirical tests using a new data set on PTA design confirm these expectations and reveal that depth – the amount of policy change specified in an agreement – is the most powerful and consistent predictor of DSM strength, providing empirical support to a long-posited but controversial conjecture. Yet power also plays a sizeable role, since agreements among asymmetric members are more likely to have strong DSMs due to their mutual appeal, as are those involving the United States. Important regional differences also emerge, as PTAs across the Americas are designed with strong dispute settlement, as are Asian PTAs, which contradicts the conventional wisdom about Asian values and legalization. Our findings demonstrate that rationalism explains much of international institutional design, yet it can be enhanced by also incorporating power-based and regional explanations.     

The European Union’s trade and investment policy in Asia: new challenges and opportunities in a changing global environment – or: following individual roadmaps

Asia is Europe’s largest trading partner and EU-Asia trade relations have undergone a rapid change since the global financial crisis. On a global scale, the new multilateral trade agreements such as the now stalled Trans-Pacific Partnership (TPP) involving European Unions’ (EU) major trading partners such as Japan, Singapore and Vietnam also have the potential to change the trade equations. In this paper, we evaluate the new EU trade policy which has been designed to ensure that the EU benefits from the changing global trade scenario and also look at the steps which have been taken by the EU to promote trade relations with its major trading partners in Asia in the predicted ‘Asian century’. We look into the Free Trade Agreements, which are being negotiated with its Asian partners and seek to understand the reasons which have resulted in delays in their signing and negotiations. We evaluate new policies pushed forward by its Asian partners such as the One Belt One Road policy by China and Japan’s policy of securing a large number of trading agreements in the America. Moving ahead, we also shed light on the indirect factors that may influence the success of EU trade negotiations in Asia such as the EU policy on granting China market economy status and the commencement of the ‘Brexit’ process. Lastly, we try to present a list of immediate priorities for EU in Asia, which will ensure that it secures a toehold in trade with the region. All in all, it is shown that the EU has not one and the same approach for all Asian countries but it negotiates flexibly and individually country by country. Because of this “country by country approach” the EU is also not ready to enter into general EU-ASEAN trade negotiations again.     

Limits to deep integration: Canada between the EU and the US1

Abstract

Twenty-five years ago, as preferential trade agreements started to proliferate, Jagdish Bhagwati sounded the ‘spaghetti bowl’ alarm, arguing that the ensuing complexity would create inefficiencies in the international system and challenges for firms navigating overlapping rules. This article seeks to update and complement Bhagwati’s thesis by asking if proliferating ‘deep’ trade agreements add a new dimension of complexity to this picture. This article shows that the early answer to this question is ‘not yet’, as governments have discovered that prospective conflicts with existing or simultaneous commitments limit just how deep the provisions of an agreement can be. Governments managing multiple deep agreements play a variation on Putnam’s two-level game. As Putnam theorized, these governments reconcile domestic interests with international opportunities in formulating their strategies. However, ensuring compatibility across various, sometimes competing international opportunities is also a key consideration. Canada’s concurrent participation in the Trans-Pacific Partnership (TPP) and the Canada–European Union Comprehensive Economic and Trade Agreement (CETA) provides a crucial exploratory case study.     

‘We care about you,but …’: the politics of EU trade policy and development

The European Union (EU) is one of the most important markets for developing countries, and trade policy has long been one of its most important instruments for promoting development. There is, however, a paradox at the heart of the relationship between the EU's trade policy and development. On the one hand the EU's trade as development policy has undergone a paradigm shift, the objective shifting from supporting the former colonies of the EU's member states to addressing poverty and with a greater emphasis on reciprocal liberalization. On the other hand, the EU's conventional trade policy initiatives—particularly its market access objectives in the Doha Round and in commercially motivated bilateral trade agreements—have adverse consequences for developing countries, as does its tendency to adopt stringent product regulations. We argue that this paradox is explained by differences in how much traction the emphasis on the development implications of trade has had in the EU's various trade policy subsystems.     

US economic statecraft in East Asia

Linkage politics in the US were revived after the terroristattacks in 2001 as the US endeavored to bolster its positionin the international system. This paper examines current USeconomic statecraft in East Asia, particularly through the useof the preferential trade agreement instrument. As the US encountersincreasing threats in the region through China's economic andmilitary expansion, the emergence of Islamic militancy, andcontinuing tensions on the Korean peninsula, it is attemptingto reinforce its strategic position through the economic reinforcementof its bilateral politico-military alliances. However, as theestablishment of its recent free trade agreements has revealed,neo-mercantilist politics, as motivated by US Congressionalattention to domestic lobbying, present a risk to this strategy.It is possible that this tendency to economic nationalism, asevidenced in the Australia–US Free Trade Agreement, willdetract from the broader purpose of reinforcing the US strategicposition in the region. Received for publication April 10, 2007. Accepted for publication February 19, 2008.     

Preventing protectionism: International institutions and trade policy

This paper examines the role of international institutions in preventing the rise of protectionism. We analyze states?? choices in trade policy during the current global economic crisis, a situation likely to exacerbate uncertainty in the conduct of commercial relations and to push countries toward ??beggar-thy-neighbor?? trade policies. The main argument of the paper is that the numerous international institutions present in the international system during the current economic crisis serve as conveyors of information and mechanisms of commitment and socialization. They mitigate the uncertainty problem that prevails in prisoner??s dilemma settings such as trade. Economic international organizations increase the flow of information about the preferences and behaviors of its members. Non-economic organizations also have a role to play as social environments that encourage cooperation. Specialized international institutions devoted to trade, such as the WTO and preferential trade agreements (PTAs), not only provide monitoring and enforcement functions but also lock in commitments to liberal trade through legal obligations that make defections costly. We test our argument using a dataset of trade policies during the current economic crisis and of membership in international organizations. The paper finds strong support for the role of international institutions as commitment and socialization mechanisms in preventing the rise of protectionism.     

Drone Warfare in Counterterrorism and Normative Change: US Policy and the Politics of International Law

The use of Unmanned Aerial Vehicles (UAVs) or drones in counterterrorism has changed the face of warfare and is challenging international law on a number of levels. This article assesses some of those challenges in the context of the Obama administration’s justifications to use drones for targeted killing. It focuses on the US as a norm entrepreneur that purposefully works to alter prevalent norms related to the use of drones in counterterrorism efforts. The article analyses normative developments and the meaning-in-use of existing legal provisions that are invoked to justify US policy in this area. By focusing on norm entrepreneurs, this article moves away from purely structural accounts of normative change towards a stronger emphasis on actors and the role of agency. Rather than understanding US drone policy as violating international law, this article argues that the Obama administration was acting as a norm entrepreneur in its counterterrorism efforts, aiming to change the meaning of a number of international legal concepts to justify its policy decisions.     

The Dominican Republic and Central America Free Trade Agreement with the USA: some concerns

This article examines the role of free-trade agreements that integrate profoundly asymmetrical economies in simultaneously benefiting the more powerful nation and exacerbating inequalities within and between the countries involved. The latest in a series of such agreements in the Americas, the Dominican Republic and Central America Free Trade Agreement (DR–CAFTA), opens up the economies of these small nations to US investment and exports, as multinational companies are able to take advantage of lower production costs and weak labour legislation. In the global economy, South–South trade agreements offer a far better alternative for countries with weak institutions and little economic or political leverage.