Social standards in trade agreements and free trade preferences: An empirical investigation
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Social standards in trade agreements and free trade preferences: An empirical investigation Ida Bastiaens 1 & Evgeny Postnikov 2 # Springer Science+Business Media, LLC, part of Springer Nature 2019
Abstract Free trade generates macroeconomic gains but also creates winners and losers. Historically, to reconcile this tension, governments compensated globalization losers with social spending in exchange for support for free trade, known as the embedded liberalism compromise. In the neoliberal era, what other policies can governments pursue to strengthen support for globalization? We assess the effect of social standards in preferential trade agreements (PTAs) on individual preferences for free trade. We analyze data from an original survey experiment and find that respondents in advanced industrialized countries have greater support for free trade when PTAs include social standards. Differences do exist in how these social standards are perceived: while we do find evidence of an embedded liberalism compromise recast, fair trade norms have the most salience. An external validity check using the PEW global attitudes survey confirms the hypothesis. Our analysis has serious implications for the legitimacy of the global trading system suffering from neo-mercantilist creep. Keywords Free trade . Embedded liberalism . Survey . Trade agreements . Labor standards .
Environmental standards . Fair trade International trade flows have increased tremendously in recent decades, as countries continue to actively integrate into the global economy. The proliferation of preferential Ida Bastiaens and Evgeny Postnikov contributed equally to this work. Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11558-01909356-y) contains supplementary material, which is available to authorized users.
* Ida Bastiaens [email protected] Evgeny Postnikov [email protected]
1
Fordham University, 441 East Fordham Rd. Faber Hall 666, Bronx, NY 10458, USA
2
School of Social and Political Sciences, University of Melbourne, 555 John Medley Building, Parkville, VIC 3010, Australia
Bastiaens I., Postnikov E.
trade agreements (PTAs) has facilitated this wave of trade liberalization. Developed and developing countries increasingly join a complex web of bilateral and plurilateral agreements to access lucrative markets across the globe while multilateral trade liberalization through the World Trade Organization (WTO) stalls. Despite the ability of trade liberalization to generate tremendous macroeconomic gains, it also induces negative externalities for societal welfare by creating winners and losers. In fact, perceptions that trade liberalization leads to social dislocation have been particularly strong among the losers of globalization in the Global North experiencing economic insecurity and market competition. But opposition to free trade also increasingly comes from socially progressive groups in the advanced industrialized countries. These ‘fair-traders’ are less concerned with the egot
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