Is using trade policy for foreign policy a “SNO job”? On linkage, friend-shoring and the challenges for multilateralism

Robert Wolfe

No 2022/74, RSCAS Working Papers from European University Institute

Abstract: Using trade policy to achieve foreign policy objectives has a long history. Punishing enemies and rewarding friends by granting or withholding market access, sanctions or blockades are venerable forms of trade policy used as foreign policy. A more recent form is the inclusion of noncommercial provisions in trade agreements. All these tools are based on linkage, premised on the assumption that a desired outcome can be achieved by interventions that would increase or decrease trade. The latest instance is so-called “friend-shoring”, which would in principle isolate enemies, although it will be difficult in practice and risks undermining multilateralism. The cost of these interventions is susceptible to economic analysis, even if the conclusion is that it is worth paying. Influenced by Alan Winters who called national security as a motivation for agriculture protection a “so-called non-economic objective” or SNO, I argue that using a trade policy tool for a foreign policy purpose as if there is no cost is a SNO job, an attempt to justify an intervention aimed at one objective by framing it as being valuable for another.

Keywords: Noneconomic objectives; trade policy; foreign policy; linkage; multilateralism (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-int
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