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Economic Interests and Regional Trading Arrangements: The Case of NAFTA

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  • Chase, Kerry A.

Abstract

This article examines lobbying in the United States on the North American Free Trade Agreement (NAFTA). I argue that economies of scale and production sharing across borders create incentives for firms to seek regional trade liberalization. Statistical analysis demonstrates that sectors with these characteristics were more likely to lobby for free trade in North America; these sectors were also exposed to free trade more rapidly under the tariff-phasing schedule in the NAFTA treaty. However, corporate restructuring to rescale production for the regional market and to increase offshore assembly presented adjustment costs for U.S. workers, which created divisions between labor unions and their employers. I conclude that regional arrangements are an attractive mechanism to liberalize trade for firms in need of larger-than-national markets to take advantage of economies of scale or to develop production-sharing networks.

Suggested Citation

  • Chase, Kerry A., 2003. "Economic Interests and Regional Trading Arrangements: The Case of NAFTA," International Organization, Cambridge University Press, vol. 57(01), pages 137-174, December.
  • Handle: RePEc:cup:intorg:v:57:y:2003:i:01:p:137-174_57
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    Cited by:

    1. Rana, Arslan Tariq & Kebewar, Mazen, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," EconStor Preprints 91501, ZBW - German National Library of Economics.
    2. Jappe Eckhardt, 2013. "EU Unilateral Trade Policy-Making: What Role for Import-Dependent Firms?," Journal of Common Market Studies, Wiley Blackwell, vol. 51(6), pages 989-1005, November.
    3. repec:spo:wpecon:info:hdl:2441/8529 is not listed on IDEAS
    4. Guanyi Leu, 2011. "ASEAN’s Preferential Trade Agreements (PTA) Strategy," Journal of Current Southeast Asian Affairs, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 30(2), pages 31-64.
    5. Natalia Victorovna Kuznetsova & Ekaterina Victorovna Kocheva & Nikolay Anatolievich Matev, 2016. "The Analysis of Foreign Trade Activities of Russia and Asia-pacific Region," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 736-744.
    6. Pekkanen Saadia M & Tsai Kellee S, 2011. "The Politics of Ambiguity in Asia's Sovereign Wealth Funds," Business and Politics, De Gruyter, vol. 13(2), pages 1-46, August.
    7. Baccini, Leonardo & Dür, Andreas & Elsig, Manfred, 2015. "The politics of trade agreement design: revisiting the depth-flexibility nexus," LSE Research Online Documents on Economics 62303, London School of Economics and Political Science, LSE Library.
    8. Cornelia Woll, 2005. "Learning to Act on World Trade. Preference Formation of Large Firms in the United States and the European Union," Sciences Po publications 05/01, Sciences Po.
    9. Cornelia Woll, 2007. "From National Champions to Global Players? Lobbying by Dominant Providers during the WTO's Basic Telecom Negotiations," Post-Print hal-00972815, HAL.
    10. repec:spr:revint:v:13:y:2018:i:1:d:10.1007_s11558-017-9278-z is not listed on IDEAS
    11. Cornelia Woll, 2007. "From National Champions to Global Players? Lobbying by Dominant Providers during the WTO’s Basic Telecom Negotiations," Sciences Po publications info:hdl:2441/8527, Sciences Po.
    12. Julia Gray & Jonathan Slapin, 2012. "How effective are preferential trade agreements? Ask the experts," The Review of International Organizations, Springer, vol. 7(3), pages 309-333, September.
    13. repec:spo:wpecon:info:hdl:2441/8527 is not listed on IDEAS
    14. Thangavelu, Shandre M. & Narjoko, Dionisius, 2014. "Human capital, FTAs and foreign direct investment flows into ASEAN," Journal of Asian Economics, Elsevier, vol. 35(C), pages 65-76.
    15. Natalia Victorovna Kuznetsova, Natalia Alexandrovna Vorobeva, 2015. "Analysis Of Global Integration Processes: South Africa, Asia-Pacific Region And Russia," Ekonomika, Journal for Economic Theory and Practice and Social Issues 2015-01, „Ekonomika“ Society of Economists, Niš (Serbia).
    16. Guo, Yunsong & Li, Yanzhi & Lim, Andrew & Rodrigues, Brian, 2008. "Tariff concessions in production sourcing," European Journal of Operational Research, Elsevier, vol. 187(2), pages 543-555, June.
    17. Cornelia Woll, 2005. "Learning to Act on World Trade. Preference Formation of Large Firms in the United States and the European Union," Working Papers hal-01065571, HAL.
    18. Asif Efrat, 2016. "Promoting trade through private law: Explaining international legal harmonization," The Review of International Organizations, Springer, vol. 11(3), pages 311-336, September.
    19. Andreas Dür & Leonardo Baccini & Manfred Elsig, 2014. "The design of international trade agreements: Introducing a new dataset," The Review of International Organizations, Springer, vol. 9(3), pages 353-375, September.

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