Global Value Chains, Firm Preferences and the Design of Preferential Trade Agreements

Eckhardt, Jappe; Lee, Kelley

doi:10.1111/1758-5899.12612

Cited by 13 publications

(13 citation statements)

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“…Finally, Eckhardt and Lee () contribute in another important way to this debate through an in‐depth case study on the preferences and political strategies of tobacco firms in the context of NAFTA negotiations. This contribution shows that while highly productive firms integrated in GVCs are generally supportive of PTAs, their preferences over the design of these institutions may vary considerably depending on the organization of their value chains at the time of the PTA negotiations.…”

Section: Institutions and Gvcsmentioning

confidence: 99%

“…This contribution shows that while highly productive firms integrated in GVCs are generally supportive of PTAs, their preferences over the design of these institutions may vary considerably depending on the organization of their value chains at the time of the PTA negotiations. More specifically, Eckhardt and Lee () convincingly demonstrate that firms sourcing the bulk of their inputs from within the PTA area have a strong preference for stringent rules of origin (RoOs), while firms depending on offshore procurement from outside the PTA area are in favor of more lenient RoOs to accommodate their foreign sourcing of inputs. This finding has important implications because it underscores that even the most productive firms may have divergent preferences over important design features of PTAs.…”

Section: Institutions and Gvcsmentioning

confidence: 99%

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Introduction: Bringing Institutions Back in the Study of Global Value Chains

Eckhardt

Poletti

2018

Global Policy

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This article introduces and summarizes the key questions and findings of this special issue of Global Policy on the role of domestic and international institutions in the study of global value chains (GVCs). The article starts by briefly introducing the concept of GVCs and the state‐of‐the‐art of the existing literature focusing on the political implications of these landmark changes in the global economy. Then, we make a case for grounding this emerging literature more strongly into an ‘institutionalist’ perspective. More specifically, we argue that while a great deal of attention has been paid to intra‐chain governance modes – that is, the different ways in which firms organize their cross‐border production arrangements – the role external institutional forces play in structuring chain dynamics remains surprisingly under‐researched. These observations invite an analytical perspective that brings institutions back into the study of GVCs. The contributions to the special issue focus on multiple causal pathways linking GVCs and various types of domestic‐ and international institutions. Altogether, these contributions underscore that the politics engendered by GVCs, as well as how they evolve, can only be fully understood by paying attention to the external institutional context in which they are embedded.

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Section: Institutions and Gvcsmentioning

confidence: 99%

Section: Institutions and Gvcsmentioning

confidence: 99%

Introduction: Bringing Institutions Back in the Study of Global Value Chains

Eckhardt

Poletti

2018

Global Policy

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“…3. Eckhardt and Lee (2018) provide evidence that firms vary in their preferences regarding the design of trade agreements.…”

Section: Resultsmentioning

confidence: 99%

Cherry picking in the design of trade policy: why regional organizations shift between inter-regional and bilateral negotiations

Meissner

2019

Review of International Political Economy

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As states have established preferential trade agreements outside of the World Trade Organization over the past three decades, different designs have been developed: region-to-region, region-to-single state or state-to-state even if members belong to regional organizations. What accounts for this variation? Conventional approaches which focus on domestic politics provide no fully sufficient explanation for this variation. I argue that coherence within regional organizations, or a lack thereof, triggers design changes between inter-regional and bilateral. More specifically, I hypothesize that a lack of coherence within a region leads to the adoption of a bilateral design by the negotiation partner in situations where this partner competes with other states for a trade agreement with the same region. I test my argument on interactions of the European Union (EU) with regional organizations in Asia and Latin America by employing rigorous process-tracing and interviews with negotiation officials from all three regions. The findings show that the EU shifted from trade negotiations with these regional organizations to singling out member states when regional coherence faded. This was part of an attempt by the EU to advance commercial interests against its competitors China and the United States in these regions.

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“…Of course, it is also possible that the expansion of GVCs may increase business support for the signing and design of preferential trade agreements. Indeed, recent research (e.g., Eckhardt & Lee, 2018; Kim et al, 2019) has yielded some evidence in support of the latter conjecture. We address this possibility in our robustness checks using both the instrumental variables (IVs) and propensity score matching (PSM) methods.…”

Section: Introductionmentioning

confidence: 93%

Trade agreements and Global Value Chain (GVC) participation: Evidence from Chinese industries

Zeng

Li³

2021

Economics & Politics

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The growing fragmentation of production across national borders and the proliferation of preferential trade agreements (PTAs) have become salient features of the global economy in the past decades. This paper examines the role of PTAs in promoting the integration of domestic industries into global value chains (GVCs) based on the experience of China, a country that has emerged as a key link in East Asian and global production networks in recent years. We conjecture that both the presence of PTAs and the depth of these agreements matter for GVC participation. Furthermore, PTAs that contain strong provisions with regard to investment protection and services are particularly likely to stimulate the expansion of GVC linkages. This is because strong investment protection provisions may reduce the disruptions that hostile government policy may generate for the entire production chain. Rigorous PTA provisions regarding services may help facilitate the provision of services, which are not only critical in enabling the emergence of GVCs, but are also becoming essential inputs in GVC trade. Empirical analysis of the effect of the PTAs signed by China on the GVC participation of 16 Chinese industries between 2005 and 2015 lends substantial support to our hypotheses.

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Global Value Chains, Firm Preferences and the Design of Preferential Trade Agreements

Cited by 13 publications

References 37 publications

Introduction: Bringing Institutions Back in the Study of Global Value Chains

Introduction: Bringing Institutions Back in the Study of Global Value Chains

Cherry picking in the design of trade policy: why regional organizations shift between inter-regional and bilateral negotiations

Trade agreements and Global Value Chain (GVC) participation: Evidence from Chinese industries

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