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This chapter explores the complexities of discrimination in international trade law, a core principle that mandates equal treatment of foreign and domestic goods, services, and intellectual property. Despite its significance, the definition of discrimination remains contested, with debates focusing on intent versus impact and the comparability of products. The chapter analyses these issues, examining key legal texts like the GATT, GATS, and TRIPS agreements, and the evolving jurisprudence of GATT panels and the WTO Appellate Body. It highlights the shifts in interpreting ‘discrimination’, including the move from considering both ‘aim and effect’ to focusing primarily on the effect of trade measures. The chapter concludes by discussing the challenges in reaching a clear, agreed-upon standard for discrimination and the implications for international trade.
This chapter examines the historical development of economic thought concerning international trade, tracing its evolution from early barter systems to contemporary theories. It explores mercantilism, classical theories of absolute and comparative advantage by Smith and Ricardo, and neoclassical economics’ focus on consumer preferences. The chapter delves into imperfect competition, introducing concepts like monopolistic power and product differentiation, which led to ‘New Trade Theory’. It also discusses efficiency maximisation, non-discrimination principles like MFN and national treatment, trade in services, and international vertical integration. The chapter concludes by emphasising the significance of reciprocity in trade relations and the role of the WTO in promoting international cooperation and reducing trade barriers.
This introduction to The Cambridge Companion to World Trade Law introduces the book’s purpose and structure. The volume is intended to be an authoritative and accessible guide to the field, appealing to both legal specialists and those with no specialist knowledge of trade law. It is written by experts and provides a compact discussion of the perspectives, enduring issues, and emergent challenges in the field. The introduction also discusses the current context of world trade, highlighting the divisions in the world following decades of growth and the challenges posed by globalisation. It sets the stage for the chapters that follow.
This chapter examines the relationship between geopolitical rivalry and world trade law. It begins by discussing the consequences of trade for national power and security, and how dominant states approach foreign economic policy. It then analyses recent geopolitical developments and their implications for the evolution of the international economic order. It concludes by discussing the implications of the analysis for world trade law and policy in the future.
Are people who are more knowledgeable and interested in trade policy more likely to change their preferences regarding trade agreements compared to their less knowledgeable and less interested counterparts on receiving new information from politicians? This study responds to this question by developing a framework that distinguishes knowledge from interest and assesses it using an original survey conducted on voters during the 2020 US election campaign. Assessing whether information about trade agreements provided by political elites shifts individuals’ trade preferences and whether knowledge and interest condition susceptibility to such information reveals that people knowledgeable and interested in trade policy are less likely to change their original preference. Together, the results sharpen the existing theories by establishing knowledge and interest as moderators of trade opinion change in low-salience trade settings.
This Element presents the main characteristics of international trade in the Middle East and North Africa (MENA) region by analyzing whether its trade policy managed to build or break bridges among MENA countries and with the rest of the world. Its objective is threefold. First, it provides an overview of trade theories from the MENA region perspective. Second, it analyzes the main trends and features of trade flows and trade policies. Third, it shows how trade policies had different development outcomes related to gender, informal employment, and the composition of labor demand. The main findings show that trade policies and domestic characteristics explain the relatively poor performance of trade flows in most of the diversified MENA economies. Also, the MENA region is highly affected by world business cycles given that this region is the largest exporter of oil. Finally, development outcomes still need to be streamlined within trade policies.
Legislators may consider the preferences of both business actors and citizens when making trade policy decisions. But when business and citizen preferences diverge, what makes legislators more responsive to one side or the other? We argue that when levels of political engagement are kept constant, legislators are more responsive to citizens than business. This effect should be particularly large for left-leaning legislators and legislators who conceive of themselves as delegates. We use three survey experiments with over 1000 legislators from 47 countries across the globe and qualitative evidence from an open survey question and 30 interviews with legislators to test our expectations. Based on this unique evidence, we find strong support for our expectations. These findings contribute to research on trade policy-making, the interaction between elites and the public in international relations, and responsiveness.
A large body of literature examines the drivers of individual attitudes towards international trade policies. This article contributes to this literature by exploring the role of border regions across the European Union (EU). Border regions offer a unique context for examining trade attitudes. Residency in either EU, non-EU, or maritime borders generates differential impacts on individuals’ support for distinct trade policies. Focusing on attitudes towards import duties and EU trade agreements, this article demonstrates that individuals in non-EU borderlands and maritime border regions are particularly supportive of lowering import duties, whereas support for extra-EU trade agreements is largely uniform across regions, with only a modest positive tendency among maritime residents. Broader sentiment on trade shows limited regional differences, chiefly between EU-border and non-EU-border residents. Including a battery of control variables drawn from the literature, the article leverages individual-level data at the most fine-grained level available in the EU to explore these dynamics relying on several regression models. This article speaks to both the literature on trade attitudes and border studies by offering a conceptualization of borders that distinguishes between EU borders, non-EU borders, and maritime borders, each of which has distinct implications for individuals’ trade attitudes.
Game theory has a long history in the political economy of trade policy. Beginning with work by Johnson in the 1950s, trade economists have used these tools to study strategic interactions between governments, interest groups representing industries or factors of production, political parties, and legislators representing different voting districts. Research has focused both on trade policies that have been set noncooperatively, sometimes in response to internal political pressures, and on the negotiation and features of cooperative trade agreements.
As digital connectivity expands and more services become tradable online, international trade is increasingly transitioning into the digital realm. Consequently, the regulatory environment facilitating digital trade has emerged as a central aspect of trade policy. Empirical research plays a vital role in informing the design, implementation, and reform of regulatory policies to facilitate trade in the digital era. However, such research heavily relies on the availability of up-to-date regulatory information across various countries. This paper introduces the Digital Trade Integration (DTI) database, which provides an overview of regulatory policies and practices expected to impact digital trade integration across 146 countries. These measures are organized into 65 indicators and 12 policy pillars covering restrictive and enabling policies. This paper highlights global and regional trends that are considered the four main components of digital trade integration: regulating (Information and Communication Technology) ICT goods, online services, investment in sectors relevant to digital trade, and data. The findings underscore the necessity for ongoing research and policy development to foster an equitable and integrated global digital economy.
This paper reviews the evolution of the Australian fashion and textile industry over the last 50 years as it confronts the challenges of climate change. Given Australia’s susceptibility to trade policies and shifting regulations, the industry needs to adapt to climate pressures, given its significant resource consumption and waste production. This analysis highlights key events that shaped the trading landscape, regulatory changes, and the need for stronger climate policies that bridge environmental responsibility between local and global actors, aiming to reduce the industry’s impact on climate change.
Technical Summary
This review examines the Australian fashion and textile industry’s response to climate change from the 1970s to the 2020s, using a methodology adapted from Harvard University comparative review guidelines and incorporating PRISMA . With evolving trade policies and regulatory shifts, this paper highlights the industry’s environmental challenges. This analysis examines the influence of local and international trade regulations and the effectiveness of climate policies in fostering sustainability. Key policy insights include the integration of climate considerations into trade policies to address the environmental impacts of international transactions, aligning trade with global climate goals. Additionally, it advocates for mandatory climate disclosures encompassing onshore and offshore emissions to enhance transparency across the supply chain. This paper calls for stronger alignment between climate and trade policies and expanded producer responsibility, holding both domestic and international actors accountable for environmental impacts.
Social Media Summary
Reviewing 50 years of Australia’s fashion and textile industry as it adapts to climate pressures & policy shifts.
This paper examines the likely economic consequences of a unilateral US trade policy, particularly those involving across-the-board tariffs and retreat from multilateral commitments. Drawing on computable general equilibrium (CGE) models, dynamic macroeconomic frameworks, and a rich body of empirical literature, the paper demonstrates that the static efficiency losses, estimated by standard trade models, understate the true costs of protectionism. It identifies five key amplification channels – loss of economies of scale, supply chain fragility, diminished technological spillovers, investment hold-up under policy uncertainty, and financial market reactions – that interact to depress both short-run output and long-run growth potential. The analysis estimates that comprehensive unilateral trade measures could reduce US GDP by 2–3% in the short term and lower the long-term growth trajectory by 0.4–0.7 percentage points annually. While some strategic interventions may yield resilience or national security benefits, the paper concludes that unilateralism generates systemic economic risks and should be approached with caution. The findings underscore the need for integrated policy frameworks that combine targeted trade tools with domestic support and international cooperation.
This chapter presents qualitative case studies of the dramatically different political dynamics of TPP and TTIP negotiations. Why was lobbying so much more contentious over TPP while lobbying over TTIP was muted and almost entirely in favor of the agreement? The chapter traces the development of industry and labor union positions on each agreement, showing how the effects of endowments-based, inter-industry trade on the basis of comparative advantage (much more prevalent with TPP partners) serves to unify industries and unions around their particular position, facilitating strong collective action. With TTIP, the chapter shows how internationally engaged firms were highly motivated to lobby in favor of increased market access and the removal of regulatory barriers, while domestic-oriented firms either sat out of the political process entirely or formed cross-sectoral ad hoc coalitions. These cases elucidate how and why actors came to these decisions.
Chapter 3 develops a theory of the domestic politics of intra-industry trade. It argues that changes in the nature of trade away from endowments-based trade to two-way trade within industries change the structure of preferences over trade policy and the way that actors mobilize politically in order to influence trade policy. This, in turn, affects trade policy outcomes and the ease with which trade agreements are concluded. First, I argue that the distributional effects of intra-industry trade drive a wedge through industry preferences over trade policy. As intra-industry trade increases, globalized firms support openness, and smaller, domestic-oriented firms within the same industry support protection. Second, these heterogeneous firm preferences change the ability of industries to overcome collective action problems and organize politically to influence trade policy. I argue that industry associations are hamstrung in their ability to lobby while individual firms have a greater incentive to lobby alone for their preferred policies. Third, exporters will overwhelm domestic-oriented firms in their ability to lobby, and as a result, tariffs will be lower in industries with higher intra-industry trade, though this may not be the case with non-tariff barriers to trade.
The book concludes by synthesizing the major findings and discussing the compelling questions it raises about future trade policy negotiations. This chapter focuses on the troubling implications of a lobbying landscape dominated by individual firms. It discusses the ways that intra-industry trade may increase societal inequality, as well as links between firm lobbying and the societal backlash to hyperglobalization. The chapter also provides policy recommendations and fruitful areas of future research based on the findings of this study.
This chapter assesses the effects of intra-industry trade on lobbying in the EU. It includes the results of analysis of an original dataset of EU-based lobbying over several trade agreements. First, the chapter briefly discusses the nature of trade policy in the EU, and then surveys the literature on the politics of trade in Europe, with a focus on the state of our knowledge about the character of political coalitions and the involvement of industry associations and individual firms in the trade policymaking process. Second, the chapter discusses the role of intra-industry trade in the EU and presents an argument about the way that IIT has eroded the ability of European industry associations to lobby jointly over trade policy. Third, the chapter introduces the dataset used to assess the argument and discusses the quantitative analysis and results. The results support the theory developed in this book and demonstrate that IIT affects societal coalitions across diverse institutional contexts.
Why are some firms more successful than others in obtaining privileged treatment from their government? Trade policy, as an unusually targeted tool, offers a rich context to understand such questions of special-interest politics and corporate power. Studying decisions on anti-dumping petitions in the United States, we introduce a novel source of privileged treatment. We argue that firms with more linkages throughout the domestic economy enjoy a privileged political position. Benefits to these firms extend indirectly to a wider set of constituents, which allows firms to assemble broader coalitions and to portray protectionist policy as more than purely particularistic politics. We provide evidence for this argument by developing original measures of linkages between firms, derived from over 600,000 customer–supplier relationships among industries, matching them with data on anti-dumping petitions filed by US firms, written briefs filed by members of Congress on behalf of these firms, and the geographic distribution of industries. Our account identifies a new explanation of differences in the political influence of firms, underscores the relevance of domestic production networks in politics, and offers a novel perspective on cleavages and coalitions in trade politics. Our results also suggest that the expansion of global supply chains, long considered a hallmark of political power, has weakened the clout of some of the largest firms by limiting their domestic footprint.
Economists have modelled the economic rationale for intra-industry trade, yet political scientists largely have neglected it until recently. Every Firm for Itself explores how dramatic shifts in the way countries trade have radically changed trade politics in the US and EU. It explores how electorally minded policymakers respond to heavy lobbying by powerful corporations and provide trade policies that further advantage these large firms. It explains puzzling empirical phenomena such as the rise of individual firm lobbying, the decline of broad trade coalitions, the decline of labor union activity in trade politics, and the rising public backlash to globalization due to trade politics becoming increasingly dominated by large firms. With an approach that connects economics and politics, this book shows how contemporary trading patterns among rich countries undermine longstanding coalitions and industry associations that once successfully represented large and small firms alike.
Trade policy in Chile has always enjoyed a high degree of consensus among the various social actors. The low level of debate in the media and civil society has always been highlighted, especially with regard to the strategy of signing preferential trade agreements (PTAs), except for some sectoral debates. However, this low level of politicization has been reversed since the social outbursts of 2019, when this questioning was installed. The CPTPP has generated a broad debate among different actors. To determine the extent to which perceptions of PTAs have actually changed, the chapter develops a mixed qualitative methodology based on stakeholder surveys, expert interviews, and media analysis. We try to find out why Chile appears to have turned its back on PTAs, given the potential economic benefits they have brought to the country. The first section reviews the literature on perceptions, particularly in relation to trade agreements. The second section describes the evolution of Chile’s trade policy in order to understand the key moments when turning points in general perceptions have occurred. The third section presents and discusses the results of the surveys, media analysis, and interviews.
Over the past 20 years, the European Union (EU) has shifted the emphasis of its trade policy from multilateral agreements towards bilateral preferential trade agreements (PTAs) and, more recently, to unilateral policy instruments. In this article we analyze the EU’s growing ambitions in promoting environmental sustainability in the context of these shifts. We advance an analytical and a conceptual argument, focusing on a product group that is highly relevant to the EU’s green transition: aviation fuels. We argue that the increasing hardness and ambition of the EU’s environmental policy instruments on the sustainability of aviation fuels contributes to a trend of ‘unilateralization’ in EU trade policy. Our analysis further illustrates how the complementary qualities of hardness and ambition in the multi-, bi-, and unilateral EU instruments lead to their flexible combination in the EU trade policy mix. Based on these findings, we propose to describe and critically analyze the EU’s current approach as ‘flexilateralism’. The EU has changed from prioritizing multilateralism to a more pragmatic, flexilateral approach, rather than for fully fledged bilateralism or unilateralism. This is what the EU’s more assertive ‘strategic autonomy’ may be about: a flexilateral approach to better address issues such as environmental sustainability with the most useful combination of instruments available.