IDEAS home Printed from https://ideas.repec.org/a/bpj/pepspp/v21y2015i4p561-574n12.html
   My bibliography  Save this article

Trade and Conflicts: Do Preferential Trade Agreements Matter?

Author

Listed:
  • Rana Arslan Tariq

    (Laboratoire d’Economie d’Orléans (LEO) UMR 7322 – CNRS, Faculté de Droit, d’Economie et de Gestion Rue de Blois – BP 26739, 45067, Orléans Cedex 2, France)

Abstract

A long debate continues whether international trade institutions (specifically preferential trade agreements [PTAs]) affect security relations between states. Contradicting theories and empirical claims are put forward by realists and liberals. The former posit that the institutions are epiphenomenal and possess no power to constrain state behavior whereas the latter claim that the institutions are likely to promote cooperation by supplying forums for consultation, arbitration and adjudication, thus reducing the risk of war between states. This study identifies an important channel through which the legal dimension of trade agreements (hence dispute settlement mechanisms [DSMs] in PTAs) may have pacifying effects on the outbreaks of war. DSMs of PTAs do have strong implications for militarized interstate disputes (MIDs), although not directly, but through low-level of foreign policy disputes, such as economic sanctions. If economic sanctions are believed to escalate to violent conflict, PTA DSMs may reduce the probability of war by mitigating the escalation of economic sanctions. However, the level of legalism differs among DSMs in PTAs. The present study first confirms empirically that sanction disputes escalate to militarized disputes and further, addresses the selection issue by using bivariate probit model. I find a sizeable impact of medium level of legalism reducing the sanctions escalation into war whereas high level of legalism, in which the state sovereignty is limited, do reduce the probability of sanctions but have no impact on war probability. Further, the interstate political cooperation proves to be a strong determinant for highly legalistic PTAs but not in the case of medium level of legalism.

Suggested Citation

  • Rana Arslan Tariq, 2015. "Trade and Conflicts: Do Preferential Trade Agreements Matter?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 21(4), pages 561-574, December.
    • Handle: RePEc:bpj:pepspp:v:21:y:2015:i:4:p:561-574:n:12
    DOI: 10.1515/peps-2015-0029
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/peps-2015-0029
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/peps-2015-0029?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Faten Ghosn & Glenn Palmer & Stuart A. Bremer, 2004. "The MID3 Data Set, 1993—2001: Procedures, Coding Rules, and Description," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(2), pages 133-154, April.
    2. John R. Oneal & Bruce Russett, 1999. "Assessing the Liberal Peace with Alternative Specifications: Trade Still Reduces Conflict," Journal of Peace Research, Peace Research Institute Oslo, vol. 36(4), pages 423-442, July.
    3. Yarbrough, Beth V & Yarbrough, Robert M, 1987. "Institutions for the Governance of Opportunism in International Trade," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(1), pages 129-139, Spring.
    4. Dixon, William J., 1994. "Democracy and the Peaceful Settlement of International Conflict," American Political Science Review, Cambridge University Press, vol. 88(1), pages 14-32, March.
    5. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(3), pages 379-414, July.
    6. Smith, James McCall, 2000. "The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts," International Organization, Cambridge University Press, vol. 54(1), pages 137-180, January.
    7. Russett, Bruce & Oneal, John R. & Davis, David R., 1998. "The Third Leg of the Kantian Tripod for Peace: International Organizations and Militarized Disputes, 1950–85," International Organization, Cambridge University Press, vol. 52(3), pages 441-467, July.
    8. Caruso Raul, 2003. "The Impact of International Economic Sanctions on Trade: An Empirical Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 9(2), pages 1-36, April.
    9. David J. Lektzian & Christopher M. Sprecher, 2007. "Sanctions, Signals, and Militarized Conflict," American Journal of Political Science, John Wiley & Sons, vol. 51(2), pages 415-431, April.
    10. Gregory A. Raymond, 1994. "Democracies, Disputes, and Third-Party Intermediaries," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(1), pages 24-42, March.
    11. Chase, Claude & Yanovich, Alan & Crawford, Jo-Ann & Ugaz, Pamela, 2013. "Mapping of dispute settlement mechanisms in regional trade agreements: Innovative or variations on a theme?," WTO Staff Working Papers ERSD-2013-07, World Trade Organization (WTO), Economic Research and Statistics Division.
    12. Drezner, Daniel W., 2003. "The Hidden Hand of Economic Coercion," International Organization, Cambridge University Press, vol. 57(3), pages 643-659, July.
    13. Yoram Haftel, 2013. "Commerce and institutions: Trade, scope, and the design of regional economic organizations," The Review of International Organizations, Springer, vol. 8(3), pages 389-414, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raul Caruso & Marco Di Domizio & David A. Savage, 2017. "Differences in National Identity, Violence and Conflict in International Sport Tournaments: Hic Sunt Leones!," Kyklos, Wiley Blackwell, vol. 70(4), pages 511-545, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Lektzian & Glen Biglaiser, 2014. "The effect of foreign direct investment on the use and success of US sanctions," Conflict Management and Peace Science, Peace Science Society (International), vol. 31(1), pages 70-93, February.
    2. Haggard, Stephan & Noland, Marcus, 2016. "Hard Target: Sanctions, Inducements, and the Case of North Korea," MPRA Paper 105812, University Library of Munich, Germany.
    3. Hadjiyiannis, Costas & Heracleous, Maria S. & Tabakis, Chrysostomos, 2016. "Regionalism and conflict: Peace creation and peace diversion," Journal of International Economics, Elsevier, vol. 102(C), pages 141-159.
    4. Brandon J Kinne, 2014. "Does third-party trade reduce conflict? Credible signaling versus opportunity costs," Conflict Management and Peace Science, Peace Science Society (International), vol. 31(1), pages 28-48, February.
    5. Aaronson Susan Ariel & Abouharb M. Rodwan & Daniel Wang K., 2015. "The Liberal Illusion Is Not a Complete Delusion: The WTO Helps Member States Keep the Peace Only When It Increases Trade," Global Economy Journal, De Gruyter, vol. 15(4), pages 455-484, December.
    6. Jason Enia & Patrick James, 2015. "Regime Type, Peace, and Reciprocal Effects," Social Science Quarterly, Southwestern Social Science Association, vol. 96(2), pages 523-539, June.
    7. Kristian Skrede Gleditsch & Steve Pickering, 2014. "Wars are becoming less frequent: a response to Harrison and Wolf," Economic History Review, Economic History Society, vol. 67(1), pages 214-230, February.
    8. Massoud Tansa G. & Magee Christopher S., 2012. "Trade and Political, Military, and Economic Relations," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(1), pages 1-39, May.
    9. Coyne,Christopher J., 2020. "Defense, Peace, and War Economics," Cambridge Books, Cambridge University Press, number 9781108724036.
    10. Cullen S. Hendrix, 2014. "Oil Prices and Interstate Conflict Behavior," Working Paper Series WP14-3, Peterson Institute for International Economics.
    11. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2012. "The Geography of Conflicts and Regional Trade Agreements," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(4), pages 1-35, October.
    12. Chen, Yin E. & Fu, Qiang & Zhao, Xinxin & Yuan, Xuemei & Chang, Chun-Ping, 2019. "International sanctions’ impact on energy efficiency in target states," Economic Modelling, Elsevier, vol. 82(C), pages 21-34.
    13. Emilie M. Hafner-Burton & Alexander H. Montgomery, 2012. "War, Trade, and Distrust: Why Trade Agreements Don’t Always Keep the Peace," Conflict Management and Peace Science, Peace Science Society (International), vol. 29(3), pages 257-278, July.
    14. Suzanne Werner, 1999. "Choosing Demands Strategically," Journal of Conflict Resolution, Peace Science Society (International), vol. 43(6), pages 705-726, December.
    15. Fabio Franchino & Camilla Mariotto, 2021. "Noncompliance risk, asymmetric power and the design of enforcement of the European economic governance," European Union Politics, , vol. 22(4), pages 591-610, December.
    16. Áslaug Ásgeirsdóttir & Martin Steinwand, 2015. "Dispute settlement mechanisms and maritime boundary settlements," The Review of International Organizations, Springer, vol. 10(2), pages 119-143, June.
    17. Gabriel Felbermayr & Erdal Yalcin & Philipp Grübener, 2014. "Economic Aspects of the Russia Conflict: Causes, Costs, Options," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 67(14), pages 35-43, July.
    18. Soo Yeon Kim, 2021. "Investment commitments in PTAs and MNCS in partner countries," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 415-442, November.
    19. Vicard, Vincent, 2012. "Trade, conflict, and political integration: Explaining the heterogeneity of regional trade agreements," European Economic Review, Elsevier, vol. 56(1), pages 54-71.
    20. Enrico Spolaore & Romain Wacziarg, 2016. "War and Relatedness," The Review of Economics and Statistics, MIT Press, vol. 98(5), pages 925-939, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:pepspp:v:21:y:2015:i:4:p:561-574:n:12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.