Abstract
Free trade generates macroeconomic gains but also creates winners and losers. Historically, to reconcile this tension, governments compensated globalization losers with social spending in exchange for support for free trade, known as the embedded liberalism compromise. In the neoliberal era, what other policies can governments pursue to strengthen support for globalization? We assess the effect of social standards in preferential trade agreements (PTAs) on individual preferences for free trade. We analyze data from an original survey experiment and find that respondents in advanced industrialized countries have greater support for free trade when PTAs include social standards. Differences do exist in how these social standards are perceived: while we do find evidence of an embedded liberalism compromise recast, fair trade norms have the most salience. An external validity check using the PEW global attitudes survey confirms the hypothesis. Our analysis has serious implications for the legitimacy of the global trading system suffering from neo-mercantilist creep.
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