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Article

International trade is a dynamic and powerful force that affects nearly every individual, business, and nation in the world. Its scope and scale have also made international trade an immense, intense, and perennial subject of interest and inquiry. Some of the foundational works on international trade can be traced back to Adam Smith and David Hume, whose theories sought to debunk the commonly held idea of international trade at the time: mercantilism, which viewed exports as beneficial because they generated an increase in foreign currency and a nation’s wealth, and imports as detrimental because they were thought to decrease a nation’s wealth. Today, the general idea of comparative advantage informs almost all neoclassical economists’ models of international trade. However, neoclassical economists tend to assume that the theoretical benefits of international trade are clear, and thus, often ignore or dismiss the negative impacts of international trade and the studies that challenge their theories. In fact, many countries have not seen the benefits predicted by neoclassical economic theories. This is particularly evident when comparing the effects of international trade across developed and developing countries. Furthermore, there is evidence that international trade has developed along patterns that are not predicted by the traditional theories of comparative advantage. Given these, the practice of trade and its international impact can be much murkier.

Article

The political economy of protection is a field within economics, but it has significant overlap with its sister discipline, political science. For a political economy of protection, one needs at a minimum two types of economic agents: political decision makers who provide protection, and economic agents who are protected or even actively seek protection. The typical political economy scenario leads to an economic outcome that is not Pareto-optimal: From a general welfare perspective, the political interaction is not desirable. An important task of political economy research is to explain why and how political interaction takes place. For the first part of the question, it appears clear that if protection is actively sought, the protection seeker intends to benefit from his activities. However, if the policymakers were truly interested in Pareto optimality and welfare maximization, they would refuse to protect. Hence a crucial assumption in the political economy literature is that the politicians’ objective function differs from the general welfare function. For the second part of the question, theoretical political economy models consider either the election campaign phase when politicians are eager to win a majority of votes (preelection models) or the phase when the politicians have been elected and may benefit from the spoils associated with holding office (postelection models). Whereas in the election phase, politicians have an incentive to cater to the interests of that part of the electorate that is considered pivotal for the election outcome, in the postelection phase they may be open to, for example, special interest group (SIG) influences from which they derive utility. A first wave of theoretical political economy models originates from the 1980s. Building on these early advances, more elaborate models have been proposed. The most prominent one is the Grossman–Helpman protection for sale (PfS) model. It delivers a postelection general equilibrium framework of trade policy determination. In this common agency model, industry interest groups act as principals and offer the government a menu of contracts of campaign contributions in exchange for trade policy. The PfS model predicts that industries that lobby for protection will obtain trade protection in equilibrium, whereas nonlobbying industries will face import subsidies. Numerous papers have evaluated the PfS model empirically and found that the implied weight on contributions in the governmental welfare function and the implied share of the population represented by lobbies are both very high. Remedies for this surprising result exist, but it has also been argued that the found empirical regularities may be spurious. At the beginning of the 21st century, the majority of political economy literature is still theoretical, but better data availability increasingly offers the opportunity to empirically test theoretical results. A number of challenges remain for the political economy literature, however. In particular, more work is required to better understand policymaker interests. Moreover, an incorporation of political economy aspects into the new trade theory models that allow for intra-industry trade and firm diversity appears to be a promising avenue for future research.

Article

In a time of trade wars, free trade skepticism, tech rivalry, and multipolar disorder, the European Union (EU) cannot evade its responsibilities the last defender of the World Trade Organization (WTO). Yet, it raises the question of whether the EU has power to defend the WTO. The EU is a multilateralist-oriented power of global magnitude. Unlike the United States, the EU is openly defending the WTO in the current crisis created by continued refusal to appointment WTO Appellate Body members. Like the United States, the EU is concerned with the illegitimate trade practices of China. Yet, the EU uses diplomatic pressure on China within the rules of the WTO. The EU is actively trying to rescue the rule-based trade system. Yet, it cannot do so alone. It needs support, not just form other WTO members but also from within Europe itself. The current crisis is in part rooted in the inability of the WTO members to update the WTO rulebook. The focus will be on the potential clash between a more assertive EU on sustainability and the absence of updated WTO rules on sustainable trade issues. This may force the EU to confront a deep-rooted policy dilemma. The question is whether the EU should continue to refrain from using its market power to promote sustainable trade in respect of the WTO. As the EU is about to ratify several bilateral trade agreements of commercial, geo-economic, and indeed geo-political importance, such as the EU–Mercosur or EU–Vietnam agreements, the rule-orientation of the EU faces growing domestic opposition as well as external contestation. Furthermore, the EU is modernizing its trade defense weaponry, the antidumping instrument, and has recently declared its intent to impose unilateral climate-related trade policy measures, the carbon-adjustment tariff, in the future. Thus, an incident such as the burning of the Amazon forest may force the EU to take a tougher stance on sustainability at the risk of bringing the EU on a collision course with the WTO itself, its rules, process, and member states. Consequently, the complex setup of the EU as a trade power could make it difficult to ratify WTO-compatible trade agreements in the future.

Article

Anthony R. Zito

New policy instruments have come onto the policy agenda since the 1970s, but there is a real question about whether the ideas behind the design of such tools are actually all that “new” when you assess the role of the policy instrument in its particular institutional and policy context. Taking Hood’s 1983 categorization of instruments as tools that manipulate society to achieve public goals via nodality (information), authority, treasure (finance), or organization, we can find instances where innovations in these areas predate the 1970s. Nevertheless, the mention of these instruments in international organizations such as the Organisation for Economic Co-operation and Development (OECD) and national institutions and debates as the means for both improving governance and protecting economic efficiency has increased in light of a number of interacting trends, including the rise of neoliberal and new management ideologies, the increasing perception of a number of wicked problems (e.g., climate change) and nested, politically sensitive problems (e.g., health and welfare policy), and a rethinking of the role of the state. A typology is offered for differentiating changes and innovation in policy instruments. Some very notable and complex policy instruments have reshaped politics and public policy in a particular policy sector; a notable example of this is emissions trading systems, which create market conditions to reduce emissions of climate change gases and other by-products. Information and financial instruments have become more prominent as tools used to achieve policy aims by the state, but equally significant is the fact that, in some cases, the societal actors themselves are organizing and supporting the management of an instrument voluntarily. However, this obscures the fact that a much more significant evolution of policy instruments has come in the area that is associated with traditional governing, namely regulation. The reality of this “command and control” instrument is that many historical situations have witnessed a more flexible relationship between the regulator and the regulated than the term suggests. Nevertheless, many OECD political systems have seen a move toward “smart” or flexible regulation. It is increasingly important that those who promote this new understanding of regulation see regulation as being supplemented and supported by and sometimes reinforcing new policy instruments. The integration of these “newer” policy instruments into the regulatory framework represents perhaps the most significant change. Nevertheless, there is some reason to question the real impact that new policy instruments have in terms of effectiveness and democratic legitimacy.

Article

Trade policy is one determining factor of 19th-century globalization, alongside transport and communication innovations and broader institutional changes that made worldwide commodity and factor flows possible. Four broad periods, or trade policy regimes, can be discerned at the European level. The first starts at the end of the French Revolutionary and Napoleonic wars that had led to many disruptions in trade relations. Governments tried to recover from the financial impact of the wars and to mitigate the adjustment shocks to domestic producers that came with the end of the wars. Very restrictive trade policies were thus adopted in most places and only slowly dismantled over the following decades as some of the welfare costs of, for example, agricultural protection became evident. The second period dated from the mid-1840s, which saw the liberalization of protective grain tariffs in many European countries, to the mid-1870s, when trade liberalization reached its maximum. This period witnessed unilateral trade liberalizations, but is most famous for the spread of a network of bilateral trade agreements across Europe in the wake of the Cobden–Chevalier treaty between France and the United Kingdom in 1860. From the 1870s, industrial and commercial crises and falling prices in agriculture due to global market integration led governments to search for solutions to these policy challenges. Many European countries thus increased protection for agriculture and manufactured goods in which domestic import-competing producers struggled. At the same time, demands for renegotiations threatened the treaty network, and lapsing agreements were only provisionally prolonged. From the late 1880s, the struggle between protection for import-competing producers and market access abroad for export-oriented producers led to internal and external conflicts over trade policy in many countries, including trade (or tariff) “wars.” A renewed network of less ambitious trade treaties than those of the 1860s restored a fragile equilibrium from the early 1890s, to be renewed and renegotiated roughly every 12 years as treaties approached their expiration date. When looking at the country and commodity level it can easily be appreciated that the more or less common shifts during these periods at the European level were more pronounced in some countries than in others. For example, the United Kingdom, the Netherlands, Switzerland, and Belgium shifted more decisively to free trade and remained there, while liberalization was much less pronounced and more decisively undone in Portugal, Spain, Russia, and the Habsburg monarchy. The experiences of the Scandinavian countries, Germany, and France lie somewhere in between. Turkey and the countries that gained independence from the Ottoman Empire in the 19th century started as (forced) free traders and from the 1880s increased their duties, in part to meet growing fiscal demands. At the commodity level, tariffs on raw materials remained generally low and did not follow the protectionist backlash that affected foodstuffs. One exception was (initially) “tropical” goods such as sugar, coffee, tea, and tobacco, where many countries levied high tariffs to extract fiscal revenue. For manufactured goods, liberalization and protectionist backlash were milder than in agriculture, although there are many exceptions to this rule.

Article

Marc L. Busch and Edward D. Mansfield

A survey of the literature on trade has revealed that it is becoming more difficult for elected officials resist protectionist pressures by citing constraints imposed by global pacts and supply free trade. There are two main reasons why. First, the literature on the design and politics of international institutions increasingly emphasizes how they build in slack that can undermine government claims of being constrained. Second, as states accede to an ever-growing list of overlapping international institutions, there is often a choice among, or uncertainty over, which institution’s obligations apply. Where this situation creates more policy space for government officials, it also will make it more difficult for them to credibly tie their hands and supply free trade in the face of interest group pressures for protection. Currently, the literature is somewhat at a turning point. Questions about the design and politics of international institutions, and the growing thickness of the market for them, are very much in vogue. These questions have profound implications for the supply of free trade. The credibility of elected officials’ hands-tying strategies is likely undermined where institutions anticipate the political reactions of their members, or where members can shop for different rules on trade to accommodate domestic preferences. The irony is that the proliferation of international institutions may lead scholars of trade policy to renew their focus on domestic interest groups.

Article

Mostafa Beshkar and Eric Bond

International trade agreements have played a significant role in the reduction of trade barriers that has taken place since the end of World War II. One objective of the theoretical literature on trade agreements is to address the question of why bilateral and multilateral trade agreements, rather than simple unilateral actions by individual countries, have been required to reduce trade barriers. The predominant explanation has been the terms of trade theory, which argues that unilateral tariff policies lead to a prisoner’s dilemma due to the negative effect of a country’s tariffs on its trading partners. Reciprocal tariff reductions through a trade agreement are required to obtain tariff reductions that improve on the noncooperative equilibrium. An alternative explanation, the commitment theory of trade agreements, focuses on the use of external enforcement under a trade agreement to discipline domestic politics. A second objective of the theoretical literature has been to understand the design of trade agreements. Insights from contract theory are used to study various flexibility mechanisms that are embodied in trade agreements. These mechanisms include contingent protection measures such as safeguards and antidumping, and unilateral flexibility through tariff overhang. The literature also addresses the enforcement of agreements in the absence of an external enforcement mechanism. The theories of the dispute settlement process of the WTO portray it as an institution with an informational role that facilitates the coordination among parties with incomplete information about the states of the world and the nature of the actions taken by each signatory. Finally, the literature examines whether the ability to form preferential trade agreements serves as a stumbling block or a building block to multilateral liberalization.

Article

Kerry A. Chase

Government policies to protect and promote national culture are a perennial issue in the trading system. Controversy over trade and culture, in almost every instance, swirls around entertainment media—mainly movies, television, video, and music. The object of contention is that many states employ an assortment of financial, trade, and regulatory measures to subsidize locally produced entertainment, restrict imports, and favor national content over foreign content. Such measures often impede trade, pitting commercial interests in open markets and free choice against calls for state action to mitigate trade’s social repercussions. Differing perspectives on the motives behind these policies typify disputes over trade and culture. In one view, state regulation of entertainment media is cultural policy, an essential means of preserving a nation’s identity, culture, and way of life. From another vantage point, these policies are backdoor protectionism, a handout to local business and labor under the guise of cultural preservation. The problem of trade and culture therefore raises basic questions about politics: Why do states subsidize production and restrict imports? What drives political demands for trade protection and government aid? How can variation in policy responses be understood? In the World Trade Organization (WTO), disputes over trade and culture center on two related issues. The first is inclusion of a “cultural exception” in trade rules to green-light, on cultural grounds, state actions that interfere with trade in entertainment media. Although there is no cultural exception in the WTO, pressure to accommodate the “specificity” of entertainment media as a cultural phenomenon has complicated trade negotiations and at times required give and take to placate the opposing sides. The second issue is policy liberalization in entertainment media, which has lagged behind market opening in many other goods and services. Deadlock over trade and culture has inspired some WTO members to explore other options: the European Union (EU) and Canada spearheaded the push for a Convention on Cultural Diversity, and the United States has pursued policy liberalization in a series of free trade agreements. Important political questions again crop up: Why has culture stalemated the WTO, and why haven’t trade linkages like those for health safety standards been institutionalized for trade and culture? Why do international political alignments on this problem form as they do? What explains the design of trade rules for entertainment media, and what is the trade regime’s impact on state policy? The age-old conflict over trade and culture continues to play out and shows no signs of abating.

Article

Stephanie J. Rickard

Policies as diverse as tariffs, exchange rates, and unemployment insurance vary across democratic countries. In an attempt to explain this cross-national variation, scholars have turned to the institutions that govern countries’ elections. The institutions that regulate elections, also known as an electoral system, vary significantly across democracies. Can these varied electoral institutions explain the diversity of policies observed? This question remains unanswered. Despite a growing body of research, little consensus exists as to precisely how electoral institutions affect policy. Why is it so difficult to untangle the effects of electoral institutions on economic policy? One reason for the confusion may be the imprecise manner in which electoral institutions are often measured. Better measures of electoral systems may improve our understanding of their policy effects. Improved theories that clarify the causal mechanism(s) linking electoral systems to policy outcomes will also help to clarify the relationship between electoral systems and policies. To better understand the policy effects of electoral institutions, both theoretical and empirical work must take seriously contextual factors, such as geography, which likely mediate the effects of electoral institutions. Finally, different types of empirical evidence are needed to shed new light on the policy effects of electoral institutions. It is difficult to identify the effects of electoral systems in cross-national studies because of the many other factors that vary across countries. Examining within-country variations, such as changes in district magnitude, may provide useful new insights regarding the effects of electoral institutions on policy.

Article

While economists overwhelmingly favor free trade, even unilateral free trade, because of the gains realizable from specialization and the exploitation of comparative advantage, in fact international trading relations are structured by a complex body of multilateral and preferential trade agreements. The article outlines the case for multilateral trade agreements and the non-discrimination principle that they embody, in the form of both the Most Favored Nation principle and the National Treatment principle, where non-discrimination has been widely advocated as supporting both geopolitical goals (reducing economic factionalism) and economic goals (ensuring the full play of theories of comparative advantage undistorted by discriminatory trade treatment). Despite the virtues of multilateral trade agreements, preferential trade agreements (PTAs), authorized from the outset under GATT, have proliferated in recent years, even though they are inherently discriminatory between members and non-members, provoking vigorous debates as to whether (a) PTAs are trade-creating or trade-diverting; (b) whether they increase transaction costs in international trade; and (c) whether they undermine the future course of multilateral trade liberalization. A further and similarly contentious derogation from the principle of non-discrimination under the multilateral system is Special and Differential Treatment for developing countries, where since the mid-1950s developing countries have been given much greater latitude than developed countries to engage in trade protectionism on the import side in order to promote infant industries, and since the mid-1960s on the export side have benefited from non-reciprocal trade concessions by developed countries on products of actual or potential export interest to developing countries. Beyond debates over the strengths and weaknesses of multilateral trade agreements and the two major derogations therefrom, further debates surround the appropriate scope of trade agreements, and in particular the expansion of their scope in recent decades to address divergences or incompatibilities across a wide range of domestic regulatory and related policies that arguably create frictions in cross-border trade and investment and hence constitute an impediment to it. The article goes on to consider contemporary fair trade versus free trade debates, including concerns over trade deficits, currency manipulation, export subsidies, misappropriation of intellectual property rights, and lax labor or environmental standards. The article concludes with a consideration of the case for a larger scope for plurilateral trade agreements internationally, and for a larger scope for active labor market policies domestically to mitigate transition costs from trade.

Article

Economic nationalism tended to dominate U.S. foreign trade policy throughout the long 19th century, from the end of the American Revolution to the beginning of World War I, owing to a pervasive American sense of economic and geopolitical insecurity and American fear of hostile powers, especially the British but also the French and Spanish and even the Barbary States. Following the U.S. Civil War, leading U.S. protectionist politicians sought to curtail European trade policies and to create a U.S.-dominated customs union in the Western Hemisphere. American proponents of trade liberalization increasingly found themselves outnumbered in the halls of Congress, as the “American System” of economic nationalism grew in popularity alongside the perceived need for foreign markets. Protectionist advocates in the United States viewed the American System as a panacea that not only promised to provide the federal government with revenue but also to artificially insulate American infant industries from undue foreign-market competition through high protective tariffs and subsidies, and to retaliate against real and perceived threats to U.S. trade. Throughout this period, the United States itself underwent a great struggle over foreign trade policy. By the late 19th century, the era’s boom-and-bust global economic system led to a growing perception that the United States needed more access to foreign markets as an outlet for the country’s surplus goods and capital. But whether the United States would obtain foreign market access through free trade or through protectionism led to a great debate over the proper course of U.S. foreign trade policy. By the time that the United States acquired a colonial empire from the Spanish in 1898, this same debate over U.S. foreign trade policy had effectively merged into debates over the course of U.S. imperial expansion. The country’s more expansionist-minded economic nationalists came out on top. The overwhelming 1896 victory of William McKinley—the Republican party’s “Napoleon of Protection”—marked the beginning of substantial expansion of U.S. foreign trade through a mixture of protectionism and imperialism in the years leading up to World War I.

Article

Roberto Dominguez and Joshua Weissman LaFrance

The history of the European Union (EU) is closely associated with the development of the United States. As the process of European integration has produced institutions and gained a collective international presence, the United States has been a close observer, partner, and often critic of the policies and actions of the EU and its member states. A steady progression of events delineates this path: the Marshall Plan, origins of European integration, the Cold War, the post–Cold War, 9/11 and its effects on the international system, the Great Recession, and the deterioration of global democracy. All throughout, the EU and the United States have both cooperated and collided with one another, in line with the combination of three main factors: (a) the evolution of the EU as an independent, international actor; (b) American strategies for engagement with Europe and then with the EU; and (c) the adaptive capacity and cohesion of the overall transatlantic relationship. The EU–U.S. relationship is significant not only for the influential role of the EU in world affairs but also because, as opposed to China or Russia, the transatlantic area hosts one of the most solid relationships around the world. Crises surely have been, and will be, a frequent aspect of the intense interdependences on both sides of the Atlantic; however, the level of contestation and conflict is relatively low, particularly as compared with other areas that smoothly allow the flow of goods, services, people, and ideas. Taken altogether, then, the transatlantic relationship possesses a strong foundation: it is integral, resilient, and enduring over a history of diplomatic disagreements and conflicts. The primary question remains just how this steady stream and confluence of shared challenges ultimately will fare in face of evolving crises and systemic disruptors. In any case, the answer is determined by the enduring nature, and foreign policy choices, of the primary actors on each side of the Atlantic.

Article

Yoshiharu Kobayashi

Economic sanctions are an attempt by states to coerce a change in the policy of another state by restricting their economic relationship with the latter. Between, roughly, the 1960s–1980s, the question dominating the study of sanctions was whether they are an effective tool of foreign policy. Since the 1990s, however, with the introduction of large-N datasets, scholars have turned to more systematic examinations of previously little explored questions, such as when and how sanctions work, when and why states employ sanctions, and why some sanctions last longer than others. Two dominant perspectives, one based on strategic logic and the other on domestic politics, have emerged, providing starkly different answers to these questions. A growing body of evidence lends support to both strategic and domestic politics perspectives, but also points to areas in which they fall short. To complement these shortcomings, a new direction for research is to unite these perspectives into a single theoretical framework.

Article

Michael Anthony Lewis

This article will cover basic economic concepts, as well as their relevance to public policy. It defines economics and follows this with discussions of microeconomic concepts, such as market, demand, supply, equilibrium price, and market failure. Next, it takes up discussions of macroeconomic concepts, such as gross domestic product, aggregate demand, inflation, unemployment, fiscal policy, taxes, and free trade. As these economic concepts are discussed, they are related to public policies, such as Social Security, Unemployment Insurance, and Temporary Assistance for Needy Families, which all address the provision of benefits for people in need of income and resources.

Article

James Cameron

Although never enemies, the United States and Brazil have a complex history stemming primarily from the significant imbalance in power between the Western Hemisphere’s two largest nations. The bedrock of the relationship, trade, was established in the 19th century due to the rapid growth in US demand for Brazilian coffee, and since then commercial disputes have been a constant feature of the relationship. Brazil’s periodic attempts to use cooperation with Washington to enhance its own economic and diplomatic status during the 20th century generally fell short of expectations due to the relative lack of weight the United States gave to Brazilian objectives. Consequently, Brazilian foreign policy has swung between advocating closer ties with the United States and asserting the country’s autonomy from the colossus to the north. American support for the 1964 military coup left a persistent legacy of suspicion. In the early 21st century, the two countries enjoy relatively good relations. Brazil and the United States also have a rich history of transnational interactions, encompassing areas such as culture, race, business, trade unionism, and human rights. Both countries’ processes of racial and national identity formation have been influenced by the other. US business figures have at different times attempted to shape Brazil’s economic development along their preferred lines, while US culture has been used to further Washington’s political objectives. During the dictatorship, transnational actors worked together to push back against the regime and US national security policy. This history of transnational relations has become an increasingly important part of the scholarship on the United States and Brazil.

Article

“Antitrust” or “competition law,” a set of policies now existing in most market economies, largely consists of two or three specific rules applied in more or less the same way in most nations. It prohibits (1) multilateral agreements, (2) unilateral conduct, and (3) mergers or acquisitions, whenever any of them are judged to interfere unduly with the functioning of healthy markets. Most jurisdictions now apply or purport to apply these rules in the service of some notion of economic “efficiency,” more or less as defined in contemporary microeconomic theory. The law has ancient roots, however, and over time it has varied a great deal in its details. Moreover, even as to its modern form, the policy and its goals remain controversial. In some sense most modern controversy arises from or is in reaction to the major intellectual reconceptualization of the law and its purposes that began in the 1960s. Specifically, academic critics in the United States urged revision of the law’s goals, such that it should serve only a narrowly defined microeconomic goal of allocational efficiency, whereas it had traditionally also sought to prevent accumulation of political power and to protect small firms, entrepreneurs, and individual liberty. While those critics enjoyed significant success in the United States, and to a somewhat lesser degree in Europe and elsewhere, the results remain contested. Specific disputes continue over the law’s general purpose, whether it poses net benefits, how a series of specific doctrines should be fashioned, how it should be enforced, and whether it really is appropriate for developing and small-market economies.

Article

More Americans than ever before believe that money in politics weakens our democracy. Public opinion polls show that the number of people who believe that the country is run by a few big interests looking after themselves rose to nearly 80% over the past 20 years. The belief that corporate interests drive public policy is not all that surprising when you consider the growth of lobbying in the United States. According to the Center for Responsive Government, from 1998 to 2016, the amount of money spent on lobbying the U.S. government grew from $1.45 billion to $3.12 billion with well over 10,000 lobbyists in Washington. With this all this money attempting to influence policy outcomes in Washington, it is no wonder that Americans are skeptical of the intentions of government officials. However, political scientists have found a more mixed result when it comes to the actual influence of money on politics. One study asked if the amount of money spent on any given issue really influences policy outcomes. Other studies have shown some benefit to the private parties that lobby. Thus despite significant research on the topic, there is little agreement among political scientists on just how lobbying influences political actors or if lobbying directly impacts policy results. When it comes to foreign policy, corporate lobbies are an ever-present influence in the crafting of government policies. Whether in the European Union or the United States or other countries around the world, corporate lobbies view representing their interests in a truly global fashion. While corporate interests are investing in shaping foreign policy in a variety of issues areas such as defense spending, arms sales, contractors on humanitarian missions, one area is particularly vulnerable to corporate influence—trade and finance. Research shows that U.S. trade politics is heavily influenced by the lobbying of business organizations and trade associations. In fact, the U.S. administration often relies on interested corporate parties to provide it with both the expertise that shapes the agreement itself and the political case for trade liberalization that shapes the public pro-trade campaign. In turn, corporate lobbying for trade agreements is a costly and involved process. For example, during the eight years of negotiations over the TransPacific Partnership Agreement, a regional trade agreement between the United States and 11 other Pacific Rim countries, corporations paid $2.6 billion dollars to lobbyists to influence the content of the agreement and to promote it to Congress and the American public. An overview of the literature on corporate lobbying and an examination of the case of U.S. trade shows a particular example of how corporate lobbying works to influence foreign policy.

Article

Relations between the European Union (EU) and Russia have gone through a dramatic journey from close partnership to confrontation. The narratives of the crisis that erupted over Ukraine in late 2013 and early 2014 are diametrically opposed. The root causes of the crisis are primarily related to colliding visions of the European order that have existed ever since the end of the Cold War. Yet, to understand why the escalation happened at that time, one also needs to understand the dynamics of a process of increasing tensions and dwindling trust. The Ukraine crisis was thus both the outcome of an escalation of tensions and a radical rupture. In the run-up to the Ukraine crisis (2003–2013), EU–Russia relations were characterized by a Strategic Partnership. The latter was launched in 2003, closing a decade of asymmetrical EU-centric cooperation and redressing the balance in a formally equal partnership, based on pragmatic cooperation and a recognition of mutual interests. Despite high aspirations, the Strategic Partnership gradually derailed into a logic of competition. Tensions eventually crystallized around colliding integration projects: the Eastern Partnership (aiming at Association Agreements) on the EU’s side and the Eurasian Economic Union on Russia’s side. The crisis erupted specifically as the result of the choice Ukraine had to make between the two options. This choice radicalized the negative geopolitical reading that Moscow and Brussels had gradually developed of each other’s behavior. Since the start of the Ukraine crisis (2014), EU–Russia relations have been characterized by a harsh confrontation in the field of high politics. The Strategic Partnership was suspended and the EU imposed sanctions in response to Russia’s annexation of Crimea and destabilization of Ukraine. Moscow retaliated and relations became highly acrimonious. Security-related issues dominate the agenda: Russia accuses the West of neo-containment, while Moscow is blamed for undermining the pan-European border regime and security order. The stalemate between Russia and the EU (and by extension the Euro-Atlantic Community) is ambivalent. On the one hand, it has taken the form of a systemic crisis, where both parties risk running from incident to incident in the absence of effective pan-European instruments that may constrain or reverse the conflict. On the other hand, in the field of low politics, in particular trade and energy, business often seems to continue as usual.

Article

Johan Adriaensen

In 1958, the European Economic Community was formed as a customs union with a common external tariff. From then on, the Common Commercial Policy—also known as the European Union’s (EU) trade policy—served as the interface between the increasingly integrated common market and its external trade partners. Like the creation of the single market, contemporary trade policy has long transcended discussions about tariffs and quotas at the border and has focused increasingly on the impediments to trade caused by regulatory divergences. Whether they concern agricultural subsidies or cultural protections, rules on public procurement or food standards, insofar as a regulation discriminates against exporters, it can potentially be part of a trade negotiation. The evolving nature of trade policy has triggered a redefinition of both the scope of the EU’s exclusive competencies as well as the procedures to govern this policy domain. The central actor in EU trade policy is the European Commission, which is the designated negotiator for external trade agreements. Whereas member states always played a crucial role in overseeing such negotiations in the Council, the European Parliament has only taken up a position of power since 2009. Beyond securing market access abroad and protecting domestic sectors at home, post-material values have come to feature more prominently in the balancing act of contemporary trade discussions. This has galvanized a far wider range of societal actors to lobby the EU institutions in order to tilt the balance in their favor. Complicating matters even further, the EU conducts a large part of its foreign policy through the Common Commercial Policy. Contrary to most other instruments of the EU’s external action, trade policy is an exclusive competency of the EU. Fostering development, promoting stability, providing humanitarian aid, and the promotion and enforcement of human rights and sustainable development commitments are but a few of the many objectives pursued via trade policy. However, there are clear limitations to the fungibility of the EU’s large market power for foreign policy objectives. It should therefore be clear that the literature on the Common Commercial Policy is extremely diverse. Situated at the nexus of international political economy, regulatory governance, and foreign policy, it has become a well-studied policy domain through a great variety of theoretical and disciplinary lenses. The prominence of trade scholarship in EU studies is unlikely to change soon as developments at the international level, where the Western liberal order is under increasing pressure, but also domestically, where the contestation of several trade negotiations and the position of trade policy within the EU’s broader external action, are set to animate future debates.

Article

The export of silk products created a regional trade surplus for eastern Japan, centered on Tokyo. In producing raw silk, the people of eastern Japan created factories to lead rural industrialization. This regional trade surplus was used to fuel growth in the consumer economy of Japan, as it pushed western Japan, centered on Osaka, to develop its cotton industry. These two industries and the Yawata Steel Works in northern Kyushu transformed Japan from an agricultural country to an industrial country in the late 19th century. In this story, the role of government is both central and peripheral. Without the decision by the Tokugawa shogun’s government to open Japan to external trade, this development would never have happened. However, once Japan was opened to trade, the Tokugawa government did not do much to help the trade, while the Meiji government, though desirous of fostering trade, did not always succeed in its efforts. Ultimately, it was the producers and merchants, the people, who transformed the rural economy and the country itself.