Delayed cooperation: political systems, elections, and the outcomes of trade negotiations

Abstract

Why do some trade negotiations conclude with preferential trade agreements, while others drag on indefinitely? Departing from prior focuses on established cooperation, this study emphasizes the trade negotiation process and accounts for the unconcluded talks. I argue that domestic uncertainties induced by political systems and elections will influence negotiation lengths and outcomes. On the one hand, political systems’ cohesion and efficiency in decision-making may affect the progress of trade negotiations. On the other hand, the unpredictability of electoral outcomes and calendars may prolong trade negotiations. To have a complete picture of trade negotiations, I collected an original Trade Bargaining Dataset, which contains information on both concluded and unconcluded talks. To test the hypotheses, I use a sample of 157 negotiations from 1980 to 2016, in which at least one negotiating country is from the Indo-Pacific region. The results from the Cox proportional hazard models show that parliamentary systems make negotiations smoother than presidential systems. Additionally, negotiating governments are not likely to sign agreements in election years, particularly in the elections of parliamentary and democratic countries. This study contributes to the trade cooperation literature by highlighting the variations in negotiation outcomes and offering a novel approach to investigating the negotiation process.