CIAO DATE: 05/05

The Politics of Trade in North America: Comparing Models and Industries

Abstract

This working paper studies the negotiations of the North American Free Trade Agreement (NAFTA) in two industrial chains: textile-apparel and autoparts-automotive. It compares two theoretical models. The first uses two internal variables (interest group strength and industry competitiveness) to explain the tariffs that were negotiated for the phase-out period of NAFTA. The second explores alternatives to increase the explanatory capacity of two-level games models. It incorporates the element of asymmetry between countries, and questions Putnam's (1988) hypothesis on the impact of domestic politics upon international negotiations. This second model explains the difference in the rules of origin that were adopted in NAFTA for the two industrial chains. The work reaches three conclusions. First, it confirms the necessity to specify different dependent variables to explain the outcomes of international trade agreements. Second, it concludes that a model using the two-level logic has explanatory advantages over one that does not combine levels. Third, it points out the potential to combine elements from the two models to reach a more complete explanation.

Full Text (PDF, Spanish, 49 pages, 2.35 MB)