Introduction to the special issue on the political economy of multilateral trade negotiations

Abstract

Multilateral trade negotiations (MTNs) are on life support. 1 The Doha Round of negotiations launched in 2001 has missed most of the targets set in the “July Package” of 2004. If the success of the Trade Facilitation Agreement concluded in Bali in December 2013 gives some hope, it should be reminded that this is a fairly narrow agreement where the necessary funds for its implementation are yet to be found. It is clear that the system has found its limits and as Richard Baldwin’s article in this special issue suggests “it is time to start thinking ahead on global trade governance.” The papers in this special issue all help us better understand the causes and consequences of the deadlock in MTNs. The interaction of political economy forces within and across countries is at the heart of the analysis. The papers suggests that the deadlock could be partly explained by a misunderstanding of how these different political economy forces interact with each other, as well as with negotiations in other forums, such as bilateral, regional and plurilateral agreements. A failure by negotiators in the World Trade Organization (WTO) to understand how trade in the 21st century differs from 20th century trade may have misled them when they defined the negotiating agenda. This may explain why there is so little domestic political support among WTO members for the issues put forward in the 2004 “July Package.” Over the last two decades the political economy literature has made important progress in helping understand the different rationales behind international trade agreements and their impact. The internalization of terms-of-trade effects among large trading partners has been shown to be an important rationale behind trade agreements trying to solve a prisoners’ dilemma (Bagwell and Staiger 1999, 2011). These models often allow for domestic politics but tend Rev Int Organ (2014) 9:135–142 DOI 10.1007/s11558-014-9196-2