Brown Bag Seminar with Christian Winkler, Graduate Institute of International and Development Studies (IHEID) in Geneva

Tailored Protectionism – How Big Firms Shape Non-Tariff Measures

Abstract

Since the early 1990s, tariff rates and other traditional forms of trade protectionism have steadily declined, while the number of non-tariff measures (NTMs) has soared. As the regulations underpinning NTMs can be trade restricting, one would expect large globalized firms—identified in the literature as key players behind tariffs reductions and free trade agreements—to oppose NTMs. Yet, there has been little empirical work on firms’ preferences on NTMs to date. This paper seeks to fill this gap in the literature by answering the following questions: What drives firms’ preferences regarding NTMs? And how do firms shape NTMs to their advantage? This paper offers a theory of firms’ preferences on NTMs and argues that firms with higher compliance capabilities, due to their size or market position, are less opposed to NTMs than their competitors. Thus, although NTMs can increase compliance and production costs, they can also act as a form of tailored protectionism for large, globalized firms against smaller and foreign competitors. To test this argument, I analyze over 60,000 comments submitted by firms during the rulemaking process of U.S. regulations notified to the WTO TBT committee using natural language processing and machine learning tools. I find that large, globalized firms are less likely to oppose regulations underpinning NTMs than smaller firms. Moreover, I provide robust evidence that comments submitted by large U.S. firms have the biggest impact on the content of final regulations, suggesting that these firms are particularly successful in shaping regulations to their advantage.

About the speaker

Christian Winkler is a PhD candidate in International Relations and Economics (Minor) at the Graduate Institute of International and Development Studies (IHEID) in Geneva. He is part of the Swiss National Science Foundation (SNSF) funded interdisciplinary research project on “Packaged Trade Agreements” at the Centre for Trade and Economic Integration (CTEI). He holds an MA in International Political Economy from King’s College London and a BA in Politics and Public Administration from the University of Konstanz.

His research focuses on the role of social, environmental, and security concerns in trade policymaking. He is particularly interested in how these non-trade issues influence the design of different trade instruments, including free trade agreements, non-tariff measures (NTMs), and supply chain legislations. Prior to pursuing his PhD, he worked for the European Central Bank, the German Ministry for Economic Affairs, and private consultancies

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