Trade Agreements Global Politics

19 décembre 2020

The economic and political motivations for negotiating trade agreements (z.B Tarlea 2018) have caused a great deal of attention. While governments negotiate trade agreements for economic reasons, they also have geopolitical motivations. Geopolitical alliances, on the other hand, strengthen trade relations. But not everyone agrees on the importance of these links. Baldwin and Jaimovich (2012), for example, conclude that geopolitical factors play no role in trade agreements. Tags: geopolitics, defense alliances, trade agreements, NATO Figure 2 shows the estimated probabilities of a trade agreement between the United States and some NATO members. It initially expects the United States to remain true to its NATO commitments (see the estimated probabilities presented as dark grey bars fixing the model of the defence pact to 1). It then assumes that the United States no longer commits to its nato commitments (see the estimated probabilities presented as light grey bars when the model of the defence pact is set at 0). The likelihood of a successful conclusion of a bilateral trade agreement between the United States and the countries concerned is significantly diminishing.

We analyze 271 bilateral trade agreements between 44 countries over the period 1871-1913. We measure financial factors from covariate models of gravity and geopolitical motivations from military alliances, including defence pacts, non-attack contracts, neutrality contracts and agreements. Figure 3 shows the difference between the two probabilities in Figure 2. The smallest decrease in the relative probability for Canada is about 20%. Proximity means low trade costs and significant trade benefits for these neighbouring countries. As a result, economic considerations encourage the signing of bilateral trade agreements, whether or not they are reinforced by geopolitical considerations. This is consistent with the fact that the United States has signed bilateral trade agreements with Canada and Mexico, replacing NAFTA in 2018 with the USMCA trade agreement. March or Mercury redux: the geopolitics of bilateral trade agreements A possible explanation for this negative conclusion is that efforts to understand bilateral trade relations and alliance partnerships are disoriented by the existence of multilateral and regional trade agreements. Multilateral and bilateral trade agreements are correlated. Multilateral trade negotiations are also correlated with geopolitics, as trade negotiations have often taken place between military alliance partners since World War II, particularly with a view to consolidating the relevant alliances. Note: The graph shows the estimated probabilities of a trade agreement between the United States and some NATO members (including Japan, which has « great non-NATO » status.

Ally »). The probabilities in question are calculated on the assumption (i) that the United States continues to meet its NATO commitments (i.e. put the defence pact at 1, dark green) and (ii) a hypothetical scenario in which the United States is no longer required to meet its commitments, which means that the military alliance with NATO members is as if it did not exist (i.e. the 0-way defence agreement; The only bilateral alliance measure that is still important is defence agreements. This contrasts with less ambitious agreements, such as non-aggression contracts, treaties and neutrality treaties.