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.     

Economics,security, and individual-level preferences for trade agreements

Empirical research on the determinants of individual-level support for trade liberalization has focused almost entirely on the economic effects of trade. Yet, international relations scholarship has long recognized that commerce also has a variety of security implications. This paper explores if and when security considerations influence individual attitudes toward trade. In this study, we ask two questions: First, to what extent do expectations about the security implications of trade affect individual-level attitudes toward trade agreements? Second, does the introduction of security concerns into the discussion of trade agreements influence how heavily individuals weigh their economic costs and benefits? We employ an original experiment embedded in a conjoint survey to investigate the relative impact of a variety of economic and security considerations on respondents’ support for trade. Our findings suggest that security information matters and undermines the appeal of some, though not all, economic arguments for trade liberalization among our respondents.     

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 legitimacy of free trade agreements as tools of EU democracy promotion

This article questions whether the European Union (EU) strategy of using free trade agreements (FTAs) as tools of democracy promotion is, currently, normatively coherent and legitimate. It focuses on FTAs with proximate autocracies and makes four main claims. First, FTAs raise significant legitimacy concerns in that they can ordinarily be expected to generate both economic ‘winners’ and ‘losers’ in the target country without democratic processes in place to legitimate these costs. Second, the EU risks empowering autocrats (rather than catalysing democratic transition) in the way it negotiates FTAs. Third, ‘leverage’ strategies of withholding or suspending cooperation as a result of violations of democratic and human rights norms are applied inconsistently by the EU, undermining leverage credibility. Fourth, the best-case impact of regulatory convergence with the EU acquis communautaire on the democratic character of sector-level policymaking is mixed: increased transparency and accountability can improve democratic credentials, while, paradoxically, increased stakeholder participation is normatively suspect in the absence of a democratic framework.     

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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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.     

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.     

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.     

Trust in international organizations: An empirical investigation focusing on the United Nations

The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyzes a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN.

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.     

The EU-Japan free trade agreement in evolving global trade politics

Asia Europe Journal - The European Union (EU) and Japan began to search for the conclusion of a free trade agreement (FTA) around 2010, and formal negotiations on the EU-Japan FTA (EJFTA) began in...     

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.     

Social security for rural widows in Rajasthan: an empirical study

Widows are one of the socially excluded groups in India. This study primarily focuses on the needs of widows in Rajasthan for social security, and also seeks to examine the outreach of existing social security schemes to them. The study found that a considerable proportion of widows are engaged in physically-demanding casual work. Involvement in casual employment reveals the vulnerability of widows since such employment is often considered the last resort for earning a living. Social security in various forms can play a crucial role in their lives.

La sécurité sociale et les veuves rurales au Rajasthan : une étude empirique

Les veuves constituent en Inde un des groupes exclus de la société. Cette étude est axée essentiellement sur les besoins de sécurité sociale chez les veuves au Rajasthan ; elle essaie aussi d'examiner les programmes actuels de la sécurité sociale qui sont destinés à leur aide. L'auteur de cette étude a trouvé qu'un pourcentage important de veuves sont engagées dans un travail physiquement éprouvant et à titre temporaire. L'emploi à titre temporaire met à jour la vulnérabilité des veuves puisqu'un tel emploi est souvent considéré comme la dernière solution pour survivre. La sécurité sociale sous ses différentes formes peut jouer un rôle capital dans leur vie.

Seguro social para las viudas del área rural en Rajastán: un estudio empírico

Las viudas de India conforman uno de los grupos socialmente excluidos. El presente artículo se centra en las necesidades de seguro social existentes entre las viudas de Rajastán y pretende examinar el alcance que distintos programas de seguro social tienen para este sector. Las conclusiones del estudio demuestran que un número significativo de viudas participa en el sector del trabajo informal físicamente exigente. En este sentido, la participación en el empleo informal constituye un indicador de la vulnerabilidad de las viudas, ya que este sector se considera como el último recurso para ganarse un ingreso. El seguro social en sus distintas variedades puede llegar a desempeñar un rol importante en las vidas de las viudas.

Segurança social para viúvas da área rural em Rajasthan: um estudo empírico

As viúvas são um dos grupos socialmente excluídos da Índia. Este estudo primariamente concentra-se nas necessidades das viúvas em Rajasthan de segurança social, e também busca examinar o alcance de esquemas de segurança social existentes para elas. O estudo constatou que uma considerável proporção de viúvas está engajada em trabalho temporário fisicamente demandante. O envolvimento em emprego temporário mostra a vulnerabilidade das viúvas, uma vez que tais empregos são frequentemente considerados a última opção para se ganhar a vida. A segurança social pode, de várias formas, desempenhar um papel crucial em suas vidas.     

The demand for transparency: An empirical note

By encouraging socially wasteful rent seeking and corruption, natural resources abundance might not be a blessing but a country’s curse. A recent attempt to impede these practices of corruption with theft is the Extractive Industries Transparency Initiative (EITI). The purpose of this organization is to verify and fully publish company payments and government revenues from oil, gas, and mining. Using a probit estimation technique the paper analyses empirically the political and socio-economic factors which determine a country’s participation in EITI, which can be interpreted as revealed willingness to reform.     

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.