Veto Players and the Contents of Preferential Trade Agreements

Abstract:

The concept of domestic veto players has become a popular explanation for foreign policy rigidity. We argue that veto players can be amenable to new policy initiatives – in our case preferential trade agreements (PTAs) – but then choose to exert a strong influence on their contents. Drawing upon more than a dozen PTA-design variables for an expanded collection of postwar trade agreements, our quantitative tests reveal that veto players systematically shape what is included in, and excluded from, PTAs. Most notably, agreements concluded under greater veto-player constraints contain fewer liberalization commitments, weaker dispute settlement, and more opt-outs in the form of trade remedies. Our findings highlight domestic political actors as important determinants of international institutional design and show that veto players exert additional, and perhaps stronger, influence on what is proscribed in agreements, not just whether they are enacted in the first place.