Political trade dependence and North-South trade agreements

Manger, Mark S. and Shadlen, Kenneth C. ORCID: 0000-0003-4010-4835 (2014) Political trade dependence and North-South trade agreements. International Studies Quarterly, 58 (1). 79 - 91. ISSN 0020-8833

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Abstract

Why do developing countries negotiate North-South trade agreements, when they already enjoy preferential market access to developed-country markets? Most developing countries benefit from the generalized system of preferences (GSP) and related schemes when they export to the United States, the EU, and other developed economies. And yet, many pursue fully reciprocal agreements that require major concessions to the developed partner. We argue that this is due to the nature of the GSP as a unilateral concession that can be (and often is) taken away. High dependence on unilateral, removable preferences generates "political trade dependence" (PTD). We distinguish PTD from standard measures of trade dependence, and we explain why PTD motivates developing countries to seek North-South Regional Trade Agreements (RTAs). We show the effects of PTD with a selection of illustrative cases and test our hypothesis on a data set of EU and US trade agreements with developing countries. We find robust statistical support for our hypothesis that high and rising levels of PTD make the negotiation of a North-South RTA more likely.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14682478
Additional Information:	© 2013 International Studies Association
Divisions:	International Relations
Subjects:	H Social Sciences > HF Commerce J Political Science > JZ International relations
JEL classification:	O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O19 - International Linkages to Development; Role of International Organizations
Date Deposited:	16 May 2013 13:26
Last Modified:	04 Apr 2024 22:39
Projects:	PIRG05-GA-2009-247836
Funders:	European Community's 7th Framework Programme [FP7/2007–2013], Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
URI:	http://eprints.lse.ac.uk/id/eprint/50280

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