Power Politics and the Free Trade Bandwagon

Lloyd Gruber

No 9920, Working Papers from Harris School of Public Policy Studies, University of Chicago

Abstract: What explains the developing world's newfound enthusiasm for free trade? Are developing country leaders jumping on the NAFTA, EU, APEC, and WTO bandwagons in order to achieve Pareto-improving gains? Or might it simply be their desire not to be left behind while their neighbors "go it alone"? This paper suggests that in many cases -- and in direct opposition to the collective-action-based models of international cooperation we are accustomed to seeing in the IR literature -- it is the latter (defensive) motivation that has been driving much of the action. NAFTA, I argue, is a case in point: Without in any way being bullied or coerced, the Mexican and Canadian governments agreed to take part in a cooperative multilateral arrangement they genuinely, and intensely, disliked. Although hard to reconcile with conventional "positive-sum" theories of voluntary cooperation, this finding is perfectly consistent with the broader power-politics model I sketch out in the first part of the paper.

Keywords: free trade; developing nations; trade agreement; trade (search for similar items in EconPapers)
Date: 1999-10
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