The Politics of International Trade: An Analysis of WTO Safeguard Measures

• In Event: Poster Session: International Political Economy II & Conflict Processes I
  In Poster Session: Poster Session: International Political Economy II

Abstract

Under the General Agreement on Tariffs and Trade (GATT), safeguard measures were adopted mostly by developed countries such as Australia, Canada, the European Community, and the United States. Under the World Trade Organization (WTO), however, developed countries have been relatively unsuccessful in implementing safeguards, while developing countries have frequently employed this strategy. What explains this shift? In this paper, I argue that industrial cleavage and concentration of industry determine safeguard initiation and implementation. Developed countries today tend to have higher levels of product differentiation and intra-industry trade compared to developing countries. When there is no industrial cleavage or when the level of industrial concentration is low, the affected industry suffers from intra-industrial conflict of interests and collective action problems. In contrast, when industrial cleavage is present and the level of industrial concentration is high, the affected industry can more effectively call for safeguard measures. I test this theory empirically through a quantitative analysis of WTO safeguard initiations and implementations from 1995-2017. I demonstrate the causal mechanism through an analysis of Thailand’s experience with WTO safeguard measures, which highlights the importance of industrial cleavage and industry concentration, as well as the role of personal relationships in influencing the outcomes of negotiations on the issue of compensation.

Author

• Pinn Siraprapasiri, University of California Santa Barbara