The Diffusion of Non-Trade Issues in Trade Agreements: A Network Approach

• In Event: The Design of Free Trade Agreements

Abstract

Preferential trade agreements (PTAs) are ubiquitous in the global trade system. Emerging economies signing agreements among each other are now responsible for the largest proportion of PTAs. While much scholarly attention has been devoted to the causes and consequences of North-South agreements, the phenomenon of South-South PTA proliferation, their position in the global trade network and its effects on their design remains largely unexplored. Yet, aside from the removal of traditional trade barriers, these agreements also increasingly tackle various new trade issues (NTIs), such as investment, intellectual property rights and social standards, something that North-South PTAs have previously done. We use network theory and the tools of social network analysis to explore the network effects on the diffusion of NTIs from North-South to South-South agreements, examining the mechanisms responsible for this process, such as coercion, competition and socialization. We base our analysis on the DESTA dataset that covers the whole universe of PTAs and NTIs, focusing on the agreements signed by emerging economies. Exploring the relationship structure and design patterns of various PTAs will help us understand how emerging economies respond to systemic pressures and whether they are socialized into the global liberal order.

Authors

• Evgeny Postnikov, University of Melbourne

• Ekaterina Turkina, HEC Montréal