Politicisation, business lobbying, and the design of preferential trade agreements

Abstract

Our paper addresses the question of how governments respond to the politicisation of preferential trade agreements (PTA). How have governments responded to business interest mobilisation while negotiating PTAs? Moreover, if there has been an increase in the salience of a trade agreement, has this changed the government response? First, we assess politicisation in terms of the mobilisation patterns of private sector interests during PTA negotiations. Our central argument is that governments liberalise more when a broad range of business interests involving a large number of sectors mobilise in response to trade negotiations, as this would provide legitimacy to their policy positions. Second, we study governments’ reactions to the level of salience of the trade agreement at hand. We argue that governments liberalise less when the agreement in question is highly salient and provokes increased public debate. We take an actor-centred and comparative approach to our research questions and use a novel dataset of 157 PTAs covering the period from 2005 to 2018. Both of our hypotheses are supported by our analysis. Our results also reveal an important difference between PTA ‘depth’ and ‘rigidity’, which are often perceived as closely correlated in assessing trade openness.