1932

Abstract

Modern trade agreements no longer emphasize basic trade liberalization but instead focus on international policy coordination in a much broader sense. In this review we introduce the emerging literature on the political economy of such deep integration agreements. We organize our discussion around three main points. First, the political conflict surrounding trade agreements is moving beyond the classic antagonism of exporter interests who gain from trade and import-competing interests who lose from trade. Second, there is a more intense popular backlash against deep integration agreements than there was against shallow integration agreements. Finally, the welfare economics of trade agreements has become more complex, in the sense that the goal of achieving freer trade is no longer sufficient as a guide to evaluating the efficiency of international agreements.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-economics-121020-032425
2021-08-05
2024-03-28
Loading full text...

Full text loading...

/deliver/fulltext/economics/13/1/annurev-economics-121020-032425.html?itemId=/content/journals/10.1146/annurev-economics-121020-032425&mimeType=html&fmt=ahah

Literature Cited

  1. Aisbett E, Karp L, McAusland C. 2010a. Compensation for indirect expropriation in international investment agreements: implications of national treatment and rights to invest. J. Glob. Dev. 1:21–35
    [Google Scholar]
  2. Aisbett E, Karp L, McAusland C. 2010b. Police powers, regulatory takings and the efficient compensation of domestic and foreign investors. Econ. Rec. 86:367–83
    [Google Scholar]
  3. Antras P, Staiger R. 2012. Offshoring and the role of trade agreements. Am. Econ. Rev. 102:73140–83
    [Google Scholar]
  4. Autor D, Dorn D, Hanson G. 2013. The China syndrome: local labor market effects of import competition in the United States. Am. Econ. Rev. 103:62121–68
    [Google Scholar]
  5. Autor D, Dorn D, Hanson G, Majlesi K. 2020. Importing political polarization? The electoral consequences of rising trade exposure. Am. Econ. Rev. 110:103139–89
    [Google Scholar]
  6. Bagwell K, Staiger R. 2001. Domestic policies, national sovereignty, and international economic institutions. Q. J. Econ. 116:2519–62
    [Google Scholar]
  7. Bagwell K, Staiger R. 2006. Will international rules on subsidies disrupt the world trading system?. Am. Econ. Rev. 96:3877–95
    [Google Scholar]
  8. Bagwell K, Staiger R 2016. Handbook of Commercial Policy Amsterdam: Elsevier
  9. Ballard-Rosa C, Malik M, Rickard S, Scheve K. 2017. The economic origins of authoritarian values: evidence from local trade shocks in Great Britain Conf. Memo, Stanford Univ. Stanford, CA:
  10. Battigalli P, Maggi G 2003. International agreements on product standards: an incomplete contracting theory NBER Work. Pap. 9533
  11. Brou D, Ruta M. 2013. A commitment theory of subsidy agreements. B.E. J. Econ. Anal. Policy 14:1239–70
    [Google Scholar]
  12. Cerrato A, Ferrara F, Ruggieri F. 2018. Why does import competition favor Republicans? Work. Pap., Univ. Calif. Berkeley:
  13. Colantone I, Stanig P. 2018. Global competition and Brexit. Am. Political Sci. Rev. 112:2201–18
    [Google Scholar]
  14. Costinot A. 2008. A comparative institutional analysis of agreements on product standards. J. Int. Econ. 75:1197–213
    [Google Scholar]
  15. Dur A, Mateo G. 2014. Public opinion and interest group influence: how citizen groups derailed the Anti-Counterfeiting Trade Agreement. J. Eur. Public Policy 21:81199–217
    [Google Scholar]
  16. journal 2008. The Doha round…and round…and round. Economist July 31. http://www.economist.com/finance-and-economics/2008/07/31/the-doha-roundand-roundand-round
    [Google Scholar]
  17. Ederington J, Ruta M. 2016. Non-tariff measures and the world trading system. See Bagwell & Steiger 2016 211–77
  18. Evans P 2003. Is trade policy democratic? And should it be?. The New Economic Diplomacy: Decision-Making and Negotiations in International Economic Relations N Bayne, S Woolcock 147–59 Farnham, UK: Ashgate
    [Google Scholar]
  19. Gandal N, Shy O. 2001. Standardization policy and international trade. J. Int. Econ. 53:363–83
    [Google Scholar]
  20. Gennaioli N, Tabellini G. 2019. Identity, beliefs, and political conflict Work. Pap., Bocconi Univ Milan, Italy:
  21. Goldberg P, Pavcnik N. 2016. The effects of trade policy. See Bagwell & Steiger 2016 161–206
  22. Grossman G, Helpman E. 1995. Trade wars and trade talks. J. Political Econ. 103:4675–708
    [Google Scholar]
  23. Grossman G, Helpman E. 2021. Identity politics and trade policy. Rev. Econ. Stud. 88:31101–26
    [Google Scholar]
  24. Grossman G, Lai E 2004. International protection of intellectual property. Am. Econ. Rev. 94:51635–53
    [Google Scholar]
  25. Grossman G, McCalman P, Staiger R. 2021. The “new” economics of trade agreements: from trade liberalization to regulatory convergence?. Econometrica 89:1215–49
    [Google Scholar]
  26. Hofmann CA, Osnago, Ruta M 2017. Horizontal depth: a new database on the content of preferential trade agreements Policy Res. Work. Pap. 7981 World Bank Washington, DC:
  27. Horn H, Maggi G, Staiger R 2010. Trade agreements as endogenously incomplete contracts. Am. Econ. Rev. 100:1394–419
    [Google Scholar]
  28. Horn H, Tangeras T. 2020. Economics and politics of international investment agreements IFN Work. Pap. 1140 Res. Inst. Ind. Econ. Stockholm, Swed:.
  29. Janeba E. 2019. Regulatory chill and the effects of investor state dispute settlements. Rev. Int. Econ. 27:1172–98
    [Google Scholar]
  30. Johnston C. 2015. Berlin anti-TTIP trade deal protest attracts hundreds of thousands. Guardian Oct. 10. https://www.theguardian.com/world/2015/oct/10/berlin-anti-ttip-trade-deal-rally-hundreds-thousands-protesters
    [Google Scholar]
  31. Klimenko M. 2009. Policies and international trade agreements on technical compatibility for industries with network externalities. J. Int. Econ. 77:151–66
    [Google Scholar]
  32. Kohler W, Stahler F. 2019. The economics of investor protection: ISDS versus national treatment. J. Int. Econ. 121:
    [Google Scholar]
  33. Konrad K. 2017. Large investors, regulatory taking and investor-state dispute settlement. Eur. Econ. Rev. 98:341–53
    [Google Scholar]
  34. Lee GM. 2007. Trade agreements with domestic policies as disguised protection. J. Int. Econ. 71:1241–59
    [Google Scholar]
  35. Maggi G 2014. International trade agreements. Handbook of International Economics 4 G Gopinath, E Helpman, K Rogoff 317–90 Amsterdam: Elsevier
    [Google Scholar]
  36. Maggi G, Ossa R. 2020. Are trade agreements good for you? NBER Work. Pap. 27252
  37. Maggi G, Rodriguez-Clare A. 1998. The value of trade agreements in the presence of political pressures. J. Political Econ. 106:3574–601
    [Google Scholar]
  38. Maggi G, Rodriguez-Clare A. 2007. A political economy theory of trade agreements. Am. Econ. Rev. 97:41374–406
    [Google Scholar]
  39. Margalit Y. 2019. Economic insecurity and the causes of populism, reconsidered. J. Econ. Perspect. 33:4152–70
    [Google Scholar]
  40. Mattoo A, Rocha N, Ruta M. 2020. The evolution of deep trade agreements Policy Res. Work. Pap. 9283 World Bank Washington, DC:
  41. Mattoo A, Staiger R. 2020. Trade wars: What do they mean? Why are they happening now? What are the costs?. Econ. Policy 35:103561–84
    [Google Scholar]
  42. Mavroidis P. 2016. Regulatory cooperation: lessons from the WTO and the World Trade Regime Policy Options Pap., E15 Initiat., Int. Cent. Trade Sustain. Dev. Geneva, Switz:.
  43. Mayda A, Rodrik D. 2005. Why are some people (and countries) more protectionist than others?. Eur. Econ. Rev. 49:1393–430
    [Google Scholar]
  44. Mei Y. 2019. Regulatory protection and the role of international cooperation Work. Pap., Univ. Chicago Chicago:
  45. Miravete E, Moral M, Thurk J. 2018. Fuel taxation, emissions policy, and competitive advantage in the diffusion of European diesel automobiles. RAND J. Econ. 49:3504–40
    [Google Scholar]
  46. Mukand S, Rodrik D. The political economy of liberal democracy. Econ. J. 130:765–92
    [Google Scholar]
  47. Ossa R. 2014. Trade wars and trade talks with data. Am. Econ. Rev. 104:124101–46
    [Google Scholar]
  48. Ossa R. 2016. Quantitative models of commercial policy. See Bagwell & Steiger 2016 207–59
  49. Ossa R, Staiger R, Sykes A. 2020. Disputes in international investment and trade NBER Work. Pap. 27012
  50. Parenti M, Vannoorenberghe G. 2020. A simple theory of deep integration Work. Pap., Univ. Libre Brux. Brussels, Belg:.
  51. Rodrik D. 2018. What do trade agreements really do?. J. Econ. Perspect. 32:273–90
    [Google Scholar]
  52. Rodrik D. 2021. Why does globalization fuel populism? Economics, culture, and the rise of right-wing populism. Annu. Rev. Econ. 13:133–70
    [Google Scholar]
  53. Saggi K. 2016. Trade, intellectual property rights, and the World Trade Organization. See Bagwell & Steiger 2016 433–512
  54. Schmidt J, Steingress W. 2020. No double standards: quantifying the impact of standard harmonization on trade Work. Pap., Bank Can Ottawa:
  55. Smith N. 2014. The dark side of globalization: why Seattle's 1999 protesters were right. Atlantic Jan. 6. https://www.theatlantic.com/business/archive/2014/01/the-dark-side-of-globalization-why-seattles-1999-protesters-were-right/282831/
    [Google Scholar]
  56. Stahler F. 2018. An optimal investor state dispute settlement mechanism Work. Pap., Univ. Tübingen Tübingen, Ger:.
  57. Staiger R, Sykes A. 2019. The economic structure of international trade-in-services agreements NBER Work. Pap. 22960
  58. Steiner N, Harms P. 2020. Local trade shocks and the nationalist backlash in political attitudes: panel data evidence from Great Britain Work. Pap. 2014 Johannes Gutenberg Univ. Mainz Mainz, Ger:.
  59. Venables A. 1987. Trade and trade policy with differentiated products: a Chamberlinian-Ricardian model. Econ. J. 97:700–17
    [Google Scholar]
  60. [Google Scholar]
  61. Young A. 2016. Not your parents' trade politics: the Transatlantic Trade and Investment Partnership negotiations. Rev. Int. Political Econ. 23:3345–78
    [Google Scholar]
  62. Young A. 2017. Intergovernmental policy makes transnational politics? The unusually transnational politics of TTIP. Camb. Rev. Int. Aff. 30:5–6527–48
    [Google Scholar]
/content/journals/10.1146/annurev-economics-121020-032425
Loading
  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error