Abstract
What is the impact of firms’ value chain integration on their trade preferences? In this chapter, I review the scholarship on trade policy, value chains, and compliance at the WTO dispute settlement. I theorize on the potential impact of value chains on firms’ and sectors’ political mobilization over trade policies in general, and over WTO dispute settlement rulings in particular. I propose that WTO Members’ cooperative behavior at the dispute settlement is shaped by domestic interests’ demands, which in turn is significantly shaped by their integration into value chains. Firms that are integrated into value chain networks have clear preferences over free trade to avoid disruption to their production processes and imports that they rely on. All things being equal, the combination of exporters that seek market access and the integrated import-dependent firms’ mobilization changes the domestic balance of interests in favor of trade liberalization and swift compliance with WTO panel rulings.
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