Interest group preferences towards trade agreements: institutional design matters

Abstract

Interest groups play a key role in the political economy of preferential trade agreements (PTAs). Their support for or opposition to a planned PTA tends to be crucial in determining the fate of PTAs. But which PTAs receive support from (which) interest groups? Clearly, the design of a PTA, that is, which types of provisions are (not) included in the agreement, is essential in that respect. We argue that trade and trade-related provisions, such as those that regulate services trade or the protection of intellectual property rights, mainly increase support for PTAs among export-oriented business groups. In contrast, the inclusion of non-trade provisions, namely clauses aimed at the protection of environmental and labour standards, makes citizen groups, labour unions, and import-competing business groups more supportive of trade agreements. Relying on original data from a survey of interest groups across the globe, including a conjoint experiment, we find support for the argument that different types of interest groups value the inclusion of trade and non-trade provisions in PTAs differently. Interestingly, however, we find little difference between export-oriented and import-competing business interests. Our study speaks to research on interest groups and trade policy.