Veto powers and access capabilities in the design of preferential trade agreements

Abstract

Studies of domestic political actors’ influence on the design of preferential trade agreements (PTAs) have focused on veto players as obstacles to policy change, assuming their roles as access points or channels for economic interests. Access point and veto player theories predict that multiple access points lead to a protectionist bias and that numerous veto players have a constraining influence over PTAs. This study argues that after the veto player and access point theories are combined, the effect of variation in the number of veto players and access points on the institutional features of PTAs depends on the types of exporters (endowment-based or intra-industry exporters) with whom said political actors interact. Quantitative tests show that as the value of intra-industry exports rises, veto players and access points have a less constraining effect on the scope and autonomy of PTAs. This study employed a novel dataset to approximate the values of intra-industry and endowment-based exports of 256 Standard International Trade Classification (SITC) products manufactured by 500 trading partners. The findings highlight the importance of considering the broader influence of political actors and economic interests on PTA design.