Hostname: page-component-7c8c6479df-7qhmt Total loading time: 0 Render date: 2024-03-27T12:40:08.623Z Has data issue: false hasContentIssue false

Does Flexibility Promote Cooperation? An Application to the Global Trade Regime

Published online by Cambridge University Press:  03 July 2008

Jeffrey Kucik
Affiliation:
Department of Political Science, Emory University, Atlanta. E-mail: jrkucik@emory.edu
Eric Reinhardt
Affiliation:
Department of Political Science, Emory University, Atlanta. E-mail: erein@emory.edu
Get access

Abstract

Do flexibility provisions in international agreements—clauses allowing for legal suspension of concessions without abrogating the treaty—promote cooperation? Recent work emphasizes that provisions for relaxing treaty commitments can ironically make states more likely to form agreements and make deeper concessions when doing so. This argument has particularly been applied to the global trade regime, the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). Yet the field has not produced much evidence bearing on this claim. Our article applies this claim to the global trade regime and its chief flexibility provision, antidumping. In contrast to prior work, this article explicitly models the endogeneity and selection processes envisioned by the theory. We find that states joining the WTO are more likely to adopt domestic antidumping mechanisms. Likewise, corrected for endogeneity, states able to take advantage of the regime's principal flexibility provision, by having a domestic antidumping mechanism in place, are significantly more likely to (1) join the WTO, (2) agree to more tightly binding tariff commitments, and (3) implement lower applied tariffs as well.

Type
Research Article
Copyright
Copyright © The IO Foundation 2008

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Bagwell, Kyle, and Staiger, Robert. 1990. A Theory of Managed Trade. American Economic Review 80 (4):779–95.Google Scholar
Bagwell, Kyle, and Staiger, Robert. 2006. What Do Trade Negotiators Negotiate About? Empirical Evidence from the World Trade Organization. NBER Working Paper 12727. Cambridge, Mass.: National Bureau of Economic Research.CrossRefGoogle Scholar
Beck, Nathaniel, Epstein, David, Jackman, Simon, and O'Halloran, Sharyn. 2002. Alternative Models of Dynamics in Binary Time-Series—Cross-Section Models: The Example of State Failure. Paper presented at the 18th Annual Meeting of the Society for Political Methodology, July, Atlanta, Ga.Google Scholar
Beck, Nathaniel, Katz, Jonathan N., and Tucker, Richard. 1998. Taking Time Seriously: Time-Series-Cross-Section Analysis with a Binary Dependent Variable. American Journal of Political Science 42 (4):1260–88.CrossRefGoogle Scholar
Blonigen, Bruce A., and Bown, Chad P.. 2003. Antidumping and Retaliation Threats. Journal of International Economics 60 (2):249–73.CrossRefGoogle Scholar
Blonigen, Bruce A., and Prusa, Thomas J.. 2003. Antidumping. In Handbook of International Trade, edited by Choi, E. K. and Harrigan, J., 251–84. Cambridge, Mass.: Blackwell.CrossRefGoogle Scholar
Bown, Chad P., and Crowley, Meredith A.. 2006. Policy Externalities: How U.S. Antidumping Affects Japanese Exports to the EU. European Journal of Political Economy 22 (3):696714.CrossRefGoogle Scholar
Busch, Marc L., Raciborski, Rafal, and Reinhardt, Eric. 2007. Does the Rule of Law Matter? The WTO and U.S. Antidumping Investigations. Unpublished manuscript, Emory University, Atlanta, Ga.Google Scholar
Busch, Marc L., and Reinhardt, Eric. 2003. Developing Countries and GATT/WTO Dispute Settlement. Journal of World Trade 37 (4):719–35.Google Scholar
Dam, Kenneth W. 1970. The GATT: Law and International Economic Organization. Chicago: University of Chicago Press.Google Scholar
Directorate-General of Anti-Dumping and Allied Duties. Ministry of Commerce and Industry. 2006. Annual Report 2005–2006. New Delhi: Government of India.Google Scholar
Dunoff, Jeffrey L., and Trachtman, Joel P.. 1999. Economic Analysis of International Law. Yale Journal of International Law 24 (1):159.Google Scholar
Fearon, James D. 1998. Bargaining, Enforcement, and Cooperation. International Organization 52 (2):269305.CrossRefGoogle Scholar
Feinberg, Robert M., and Reynolds, Kara M.. 2006. The Spread of Antidumping Regimes and the Role of Retaliation in Filings. Southern Economic Journal 72 (4):877–90.Google Scholar
Finger, J. Michael. 1992. Dumping and Antidumping: The Rhetoric and Reality of Protection in Industrial Countries. World Bank Research Observer 7 (2):121–43.CrossRefGoogle Scholar
Finger, J. Michael. 2002. Safeguards: Making Sense of GATT/WTO Provisions Allowing for Import Restrictions. In Development, Trade, and the WTO: A Handbook, edited by Hoekman, Bernard, Mattoo, Aaditya, and English, Philip, 195205. Washington, D.C.: World Bank.Google Scholar
Finger, J. Michael, and Nogues, Julio J., eds. 2005. Safeguards and Antidumping in Latin American Trade Liberalization: Fighting Fire with Fire. Washington, D.C.: World Bank.CrossRefGoogle Scholar
Finlayson, Jock A., and Zacher, Mark W.. 1981. The GATT and the Regulation of Trade Barriers: Regime Dynamics and Functions. International Organization 35 (4):561602.CrossRefGoogle Scholar
Gallaway, Michael P., Blonigen, Bruce A., and Flynn, Joseph E.. 1999. Welfare Costs of the U.S. Antidumping and Countervailing Duty Laws. Journal of International Economics 49 (3/4):211–44.CrossRefGoogle Scholar
Goldstein, Judith, and Martin, Lisa. 2000. Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note. International Organization 54 (3):603–32.CrossRefGoogle Scholar
Goldstein, Judith L., Rivers, Douglas, and Tomz, Michael. 2007. Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade. International Organization 61 (1):3767.CrossRefGoogle Scholar
Gowa, Joanne, and Kim, Soo Yeon. 2005. An Exclusive Country Club: The Effects of the GATT on Trade, 1950–94. World Politics 57 (4):453–78.CrossRefGoogle Scholar
Greene, William H. 1998. Gender Economics Courses in Liberal Arts Colleges: Further Results. Journal of Economic Education 29 (4):291300.CrossRefGoogle Scholar
Greene, William H. 2000. Econometric Analysis, 4thed.Upper Saddle River, N.J.: Prentice-Hall.Google Scholar
Hoekman, Bernard M., and Kostecki, Michel M.. 2001. The Political Economy of the World Trading System: The WTO and Beyond. 2d ed.New York: Oxford University Press.CrossRefGoogle Scholar
Hudec, Robert E. 1987. “Transcending the Ostensible”: Some Reflections on the Nature of Litigation Between Governments. Minnesota Law Review 72 (2):211–26.Google Scholar
Jackman, Simon. 2000. In and Out of War and Peace: Transitional Models of International Conflict. Unpublished manuscript, Stanford University, Palo Alto, Calif.Google Scholar
Jackson, John H. 2004. International Law Status of WTO Dispute Settlement Reports: Obligation to Comply or Option to “Buy Out”? American Journal of International Law 98 (1):109125.CrossRefGoogle Scholar
Kaufmann, Daniel, Kraay, Aart, and Mastruzzi, Massimo. 2005. Governance Matters IV: Governance Indicators for 1996–2004. Policy Research Working Paper WPS-3630. Washington, D.C.: World Bank.Google Scholar
Koremenos, Barbara. 2005. Contracting Around International Uncertainty. American Political Science Review 99 (4):549–65.CrossRefGoogle Scholar
Koremenos, Barbara, Lipson, Charles, and Snidal, Duncan. 2001. The Rational Design of International Institutions. International Organization 55 (4):61799.CrossRefGoogle Scholar
Maddala, G. S. 1983. Limited Dependent and Qualitative Variables in Econometrics. New York: Cambridge University Press.CrossRefGoogle Scholar
Mankiw, N. Gregory, and Swagel, Phil L.. 2005. Antidumping: The Third Rail of Trade Policy. Foreign Affairs 84 (4):107–19.CrossRefGoogle Scholar
Mansfield, Edward D., Milner, Helen V., and Rosendorff, B. Peter. 2002. Why Democracies Cooperate More: Electoral Control and International Trade Agreements. International Organization 56 (3):477513.CrossRefGoogle Scholar
Mansfield, Edward D., and Pevehouse, Jon C.. 2006. Democratization and International Organizations. International Organization 60 (1):137–67.CrossRefGoogle Scholar
Mansfield, Edward D., and Reinhardt, Eric. Forthcoming. International Institutions and the Volatility of International Trade. International Organization.Google Scholar
Moore, Michael O., and Zanardi, Maurizio. 2006. Does Antidumping Use Contribute to Trade Liberalization? An Empirical Analysis. CentER Discussion Paper 2006–61, Tilburg University, Tilburg, Netherlands.CrossRefGoogle Scholar
Pauwelyn, Joost. 2006. How Strongly Should We Protect and Enforce International Law? Unpublished manuscript, Duke University School of Law, Durham, N.C.Google Scholar
Prusa, Thomas J. 2001. On the Spread and Impact of Anti-Dumping. Canadian Journal of Economics 34 (3):591611.CrossRefGoogle Scholar
Prusa, Thomas J. 2005. Anti-Dumping: A Growing Problem in International Trade. World Economy 28 (5):683700.CrossRefGoogle Scholar
Prusa, Thomas J., and Skeath, Susan. 2002. The Economic and Strategic Motives for Antidumping Filings. Weltwirtschaftliches Archiv 138 (3):389413.CrossRefGoogle Scholar
Rosendorff, B. Peter. 1996. Voluntary Export Restraints, Antidumping Procedure, and Domestic Politics. American Economic Review 86 (3):544–61.Google Scholar
Rosendorff, B. Peter. 2005. Stability and Rigidity: Politics and Design of the WTO's Dispute Settlement Procedure. American Political Science Review 99 (3):389400.CrossRefGoogle Scholar
Rosendorff, B. Peter, and Milner, Helen V.. 2001. The Optimal Design of International Trade Institutions: Uncertainty and Escape. International Organization 55 (4):829–57.CrossRefGoogle Scholar
Schwartz, Warren F., and Sykes, Alan O.. 2002. The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization. Journal of Legal Studies 31 (1):S179S204.CrossRefGoogle Scholar
Shaffer, Gregory C. 2003. Defending Interests: Public-Private Partnerships in WTO Litigation. Washington, D.C.: Brookings Institution.Google Scholar
Simmons, Beth, and Elkins, Zachary. 2004. The Globalization of Liberalization: Policy Diffusion in the International Political Economy. American Political Science Review 98 (1):171–89.CrossRefGoogle Scholar
Staiger, Douglas, and Stock, James H.. 1997. Instrumental Variables Regression with Weak Instruments. Econometrica 65 (3):557–86.CrossRefGoogle Scholar
Stiglitz, Joseph E. 1997. Dumping on Free Trade: The U.S. Import Trade Laws. Southern Economic Journal 64 (2):402–24.Google Scholar
Sykes, Alan O. 1991. Protectionism as a “Safeguard”: A Positive Analysis of the GATT “Escape Clause” with Normative Speculations. University of Chicago Law Review 58 (1):255305.CrossRefGoogle Scholar
Trachtman, Joel P. 2007. The WTO Cathedral. Unpublished manuscript, Tufts University, Medford, Mass.Google Scholar
Trebilock, Michael J., and Howse, Robert. 1999. The Regulation of International Trade. 2d ed.New York: Routledge.Google Scholar
World Trade Organization (WTO). 2002a. Accession of Cambodia: Additional Questions and Replies. WT/ACC/KHM/12. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 2002b. WTO Members' Tariff Profiles: Note by the Secretariat. Revision. TN/MA/S/4/Rev.1. Geneva: WTO.Google Scholar
Zanardi, Maurizio. 2004. Anti-Dumping: What Are the Numbers to Discuss at Doha? World Economy 27 (3):403–33.CrossRefGoogle Scholar