The Impact of Non-corporate Interests on Preferential Trade Agreements

• In Event: Contemporary Issues in Trade Agreements

Abstract

How is trade governance shaped beyond corporate preferences? While the “New” New Trade Theory emphasizes how preferential trade agreements (PTAs) are mainly a function of the interests of big firms, political actors like populist parties, NGOs, and civil society movements can strongly affect the “lives” of PTAs. They can challenge their ratification, demand their partial revision, or sanction their termination. Instances like the failure of TTIP and the EU-Switzerland Framework Agreement, the only provisional implementation of the CETA, and the numerous reviews of the market aspects of Brexit are telling of the power of these interest groups. I argue that the political engagement of non-corporate actors positively predicts the establishment of PTA joint committees, implementing bodies, and joint interpretive instruments which supplement treaty provisions to address unforeseen political contingencies during implementation. This effect is stronger in the presence of deep PTAs covering non-trade issues. I contend that this qualifies as a rational design response on the part of policymakers, since the partisan and polarizing views of non-corporate actors destabilize a neat sequentiality between PTA negotiation, ratification, and enforcement, determining systematic feedback loops between the three different phases. I test these hypotheses through large-n analysis and two in-depth case studies. This work contributes to the literature on the complexity of modern trade agreements by looking beyond firm preferences only.

Author

• Leopoldo Biffi, Geneva Graduate Institute