The internationalization of production and the politics of compliance in WTO disputes

Yildirim, Aydin; Chatagnier, J. Tyson; Poletti, Arlo; Bièvre, Dirk De

doi:10.1007/s11558-017-9278-z

Cited by 24 publications

(17 citation statements)

References 60 publications

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“…Yet, the heterogeneity of firms within the same sector goes beyond variation in (export) performance: firms also differ in their ability to engage in transnational production activities and to establish (global and/or regional) value chains (Osgood, ). Scholars have found that firms’ preferences depend to a significant extend on their ability to source (intermediates) from – and open production facilities overseas, as well as their integration and position within (regional or global) value chains (Curran, ; Eckhardt, ; Eckhardt and Poletti, ; Kim, ; Manger, ; Osgood, ; Yildirim et al., ). That is, firms that heavily depend on foreign imports and production and/or are integrated in GVCs are most likely to have pro‐trade preferences.…”

Section: Business Interests and The Politics Of Tradementioning

confidence: 99%

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

Eckhardt

Lee

2018

Global Policy

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The conventional view in the literature is that only the largest and most productive firms in a country benefit, and hence support the signing of preferential trade agreements (PTAs), as they are able to take advantage of the key benefits such agreements offer. In this paper we argue that such firms may indeed be generally supportive of PTAs, but that their preferences often differ when it comes to the exact design of PTAs. These different preferences stem from the ways that firms have organized their value chains. We focus on one crucial issue where firms may hold different preferences, depending on the organization of their value chains: Rules of Origin (RoO). We test the plausibility of our argument through a detailed analysis of the preferences and political strategies of tobacco firms in the context of the North American Free Trade Agreement (NAFTA) negotiations.

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Section: Business Interests and The Politics Of Tradementioning

confidence: 99%

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

Eckhardt

Lee

2018

Global Policy

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“…GVC‐related trade interests and the political clout of foreign affiliates Because of their characteristics, policymakers in the complainant can also expect GVC‐related firms such as MNCs to play a crucial role the domestic politics of the defendant trade partner in facilitating swift compliance. Recent research shows that when WTO disputes concern trade barriers that affect firms and sectors highly integrated in GVCs, the probability of swift compliance increases significantly (Yildirim et al., ). Moreover, transnational lobbying, that is, lobbying by firms on both sides of a WTO complaint has been shown to be quite prevalent in WTO disputes, particularly in those involving MNCs (Eckhardt and De Bièvre, ).…”

Section: Global Value Chains and Wto Dispute Initiationmentioning

confidence: 99%

“…Whether firms in the defendant are vertically integrated partners of an MNC or arm's length enterprises, following the initiation of a WTO dispute they can actively stimulate the emergence of stronger constituency base that has a stake in reducing the barriers to trade that exist between their country and the complainant as much as possible, in order to accrue benefits stemming from the possibility of accessing cheaper imports (Manger, ). In short, the initiation of a formal WTO dispute by the complainant changes the domestic constellation of political conflict in the defendant, incentivizing greater political mobilization by these previously marginalized constituencies, as well as by exporters seeking to avoid decreased market access opportunities in the complainant's market as a result of the possible imposition of retaliatory measures in cases on non‐compliance (Yildirim et al., ). These arguments suggest that policymakers should be relatively more prone to initiate WTO disputes against trade barriers that negatively affect GVC‐related trade interests.…”

Section: Global Value Chains and Wto Dispute Initiationmentioning

confidence: 99%

The Globalization of Production and the Politics of Dispute Initiation at the World Trade Organization

et al. 2018

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The aim of this article is to show how the degree of integration into so‐called global value chains (GVCs) affects World Trade Organization (WTO) members’ decision to initiate a dispute at the WTO. Many potential violations of WTO law remain unchallenged, raising the question under which conditions WTO members complain about particular allegedly‐WTO‐incompatible policies. Controlling for alternative explanations, we demonstrate that decision‐makers are generally more likely to try and eliminate barriers to cross‐border trade by tabling a WTO complaint, when they are facing pressures to do so by firms and sectors highly integrated into such GVCs, especially when these are multinational corporations with sourcing interests in the defendant country. We test our hypothesis by comparing data from trade barrier reports with actual dispute initiation data from the US and find that, all else equal, trade barriers are more likely to be filed as disputes at the WTO in sectors with US MNCs highly integrated into GVCs. In light of the anti‐WTO rhetoric of the current US administration and its attempts to undermine its functioning and legitimacy, this analysis suggests that GVCs activate relevant societal actors that have an interest to uphold existing multilateral trade commitments, even in the efface of reluctance from their own political leaders.

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“…4E.g., Baccini and Dür (2018); Baccini et al (2018); Eckhardt and Poletti (2016); Kim (2017); Kim and Osgood (2019); National Board of Trade (2015); Osgood et al (2017); Yildirim et al (2018). …”

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confidence: 99%

“…14Eckhardt and Poletti (2016); Jensen et al (2015); Kim (2017); National Board of Trade (2015); Osgood (2018); Yildirim et al (2018). …”

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confidence: 99%

Trade policy in a “GVC World”: Multinational corporations and trade liberalization

Anderer

Dür

Lechner³

2020

Bus. Polit.

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The globalization of production is changing the political economy of trade policymaking: Traditional supporters of free trade (exporters seeking market access in foreign countries) are joined by new actors (companies needing intermediates from abroad for their production processes) in their lobbying efforts for trade liberalization. Multinational corporations (MNCs) play a crucial role in this new alliance due to their strong involvement in international trade and endowment with resources that can be used to lobby policymakers. We derive an argument from these premises that leads to the expectation of variation in trade policy outcomes across industries depending on their degree of integration in a global network of multinational corporations. Disaggregated data on the level of tariffs and speed of tariff cuts in preferential trade agreements, international mergers and acquisitions at the firm level, and MNC imports of intermediates by sector allow us to test the argument. The findings support our theoretical expectations. The paper sheds light on the processes and outcomes of trade policymaking in a globalized economy by further developing an existing argument about GVCs and trade policy outcomes as well as expanding on it by adding data on international corporate connections.

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The internationalization of production and the politics of compliance in WTO disputes

Cited by 24 publications

References 60 publications

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

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

The Globalization of Production and the Politics of Dispute Initiation at the World Trade Organization

Trade policy in a “GVC World”: Multinational corporations and trade liberalization

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