The World Trade Organization and U.S. Domestic Politics

• In Event: Production Networks and Market Protection

Abstract

The Appellate Body (AB) of the World Trade Organization (WTO) was rendered inoperative in December 2019 by the refusal of the United States to approve new members. To what extent do WTO-AB rulings affect U.S. domestic politics? Using two definitions of “U.S. domestic politics” we find empirical support for the local political relevance of WTO-AB rulings. First, we find that voters in U.S. counties that were more exposed to adverse AB rulings were significantly more likely to vote for Donald Trump in the 2016 presidential election than for the Republican presidential candidate four years prior. We measure “local exposure" with the cumulative share of county employment in industries affected by AB rulings between 1995 and 2015, and we control for county-level import competition, the "China shock," and other economic, political, and demographic characteristics. Second, we find that when U.S. membership in the WTO was up for Congressional reauthorization in 2000 and 2005, members of Congress representing districts that were more exposed to adverse AB rulings were more likely to vote against reauthorization. We measure “local exposure" with the cumulative share of congressional district employment affected by AB rulings from 1995 to 1999 for the 2000 vote, and from 2003 to 2004 for the 2005 vote. Overall, our results suggest that WTO-AB rulings are salient in U.S. domestic politics and have contributed to a backlash from exposed voters and U.S. legislators.

Authors

• Renee Bowen, University of California, San Diego

• J. Lawrence Broz, University of California, San Diego

• Marc-Andreas Muendler, University of California, San Diego