On the Path to Trade Liberalisation: Political Regimes in Trade Negotiations

35 Pages Posted: 6 Jul 2016

See all articles by Florian Mölders

Florian Mölders

German Institute for Economic Research (DIW Berlin)

Date Written: July 2016

Abstract

The number of free trade agreements (FTA) has increased substantially since 1990 despite efforts to promote multilateral trade liberalisation. While there is evidence on the determinants of FTA formation, still little is known on the processing of trade agreements, particularly regarding the pre‐implementation duration. This paper fills the research gap by using event data on the negotiation, the signing and the implementation of trade agreements. Duration analysis is employed to examine the connection between regime types and the lengths of the negotiation and the ratification stages. The results support the claim that higher levels of democratisation are associated with shorter negotiations, while political constraints lead to delays. Moreover, the depth of an agreement matters: a higher number of WTO‐X and WTO+ provisions do not only prolong the negotiation stage, but also the subsequent ratification. Against the background of potential anticipation effects of trade agreements, these results are of interest for exporting firms that assess the timing of implementation.

Suggested Citation

Mölders, Florian, On the Path to Trade Liberalisation: Political Regimes in Trade Negotiations (July 2016). The World Economy, Vol. 39, Issue 7, pp. 890-924, 2016. Available at SSRN: https://ssrn.com/abstract=2805266 or http://dx.doi.org/10.1111/twec.12280

Florian Mölders (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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