How do global trade rules evolve? Strategic sequencing in international economic law

Abstract

How do global trade rules evolve? This article argues that agreements create precedent that shapes subsequent negotiations, and policymakers exploit this precedent. Specifically, states sequence agreements, using negotiations with likeminded or relatively less important partners to establish model rules for subsequent use where negotiations will be more challenging. By institutionalizing negotiating positions where stakes are low, negotiators seek to improve the odds of replicating preferred terms in later, more challenging deals. A two-stage regression analysis on trade agreement design from 1965 to 2016 and qualitative probes from the UK and New Zealand support the argument: agreements with less important partners are presented as strategic opportunities to innovate and set precedent. Legal language has a way of sticking around, and states know it. States sign agreements with an eye to the future.