Trade Dependence and Foreign Policy Compliance: A Longitudinal Analysis

Abstract

It is widely believed that asymmetrical economic interdependence affords political leverage on foreign policy whereas symmetrical economic transactions generally do not. A more recent impression is that “vulnerability” (as opposed to mere “sensitivity”) dependence identifies those particular asymmetrical economic ties that create political opportunity. We adopt these distinctions to test the proposition that asymmetrical trade vulnerability compromises the foreign policy behavior of the more dependent of two partners. We examine trade and foreign policy relations between the United States and the 25 nations that were trade dependent upon it between 1950 and 1973. Time-series data for trade and selected roll calls of the UN General Assembly permit cross-sectional and longitudinal tests of the underlying political economy proposition. The evidence is consistent with the expectation that the asymmetrical trade vulnerability of the dependent countries leads to their compliance, albeit selective, with U.S. foreign policy preferences. On roll calls not salient to the United States, dependent countries are no more in accord with the United States than are the remaining Assembly members. Our data reinforce the tentative conclusions of two studies that were exclusively cross-sectional. Even so, there is some indication that trade sensitivity has no systematic political repercussions. The last interpretation lends quantitative support to an interdependence thesis that has previously relied upon case study evidence.