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58
reflects the higher costs associated with the expanding membership of the
GATT/WTO. Krugman (1993) asserts that the surge in membership is incompatible
with the growing complexity of the trade negotiations. This perspective does not
consider how diminishing returns apply to RTAs as well as multilateral negotiations.
Whereas these theorists are hypothesizing that diminishing returns explains the
current proliferation of RTAs, the analytical framework presented in this study
argues that diminishing returns offers the motivation to transition from multilateral
negotiations to RTAs and back to multilateralism as diminishing returns exhaust the
benefits associated with the two principle forms of trade liberalization. Elementary
economics texts indicate that diminishing returns can be delayed by technological
innovation. This fundamental principle of economics is also accommodated in the
analytical framework presented in this study. The sustained increase in RTA
notifications to the GATT/WTO is due, in part, to technological innovation relating
specifically to the development of new RTAs. As innovative RTAs are presented to
the market, the law of diminishing returns persists but is stalled thus resulting in
more adoption of RTAs rather than a return to multilateralism. The argument
presented herein is that RTAs and the GATT are not perfect substitutes. Although
one is substituted for the other, the two forms of trade liberalization exist in concert
to provide the public good: free trade. On this basis, one can argue that the two
forms of trade liberalization are complements in that RTAs increase desired trade
liberalization unavailable through the GATT/WTO at any given time. Similarly, as
the benefits associated with RTAs are exhausted given a level of technology,
Object Description
| Title | Riding the wave: an interdisciplinary approach to understanding the popularity of RTA notifications to the GATT/WTO |
| Author | McClough, David Andrew |
| Author email | mcclough@usc.edu; dmcclou@bgsu.edu |
| Degree | Doctor of Philosophy |
| Document type | Dissertation |
| Degree program | Political Economy & Public Policy |
| School | College of Letters, Arts and Sciences |
| Date defended/completed | 2008-08-07 |
| Date submitted | 2008 |
| Restricted until | Unrestricted |
| Date published | 2008-10-18 |
| Advisor (committee chair) | Katada, Saori N. |
| Advisor (committee member) |
Nugent, Jeffrey B. Cartier, Carolyn |
| Abstract | The proliferation of Regional Trade Agreements (RTAs) notified to the GATT/WTO since the early 1980s deviates from the long-term trend and reflects participation of nearly every member of the United Nations. This dissertation seeks to explain the current wave of RTA notifications by supplementing the economic model of supply and demand with diffusion theory. Application of the supply and demand model is useful in distinguishing between changes in demand and changes insupply of RTAs. This distinction is seldom emphasized in the current literature examining RTAs. Recent applications of diffusion theory in the discipline of international relations offer a unique opportunity to include a dynamic force in the static analysis of the supply and demand model. Empirical analysis assesses the fit of the RTA diffusion pattern by comparing the RTA diffusion pattern to a cumulative standard normal distribution. The analysis indicates that the diffusion pattern of RTAs resembles the diffusion of an innovation through a social system.; The implication of this finding is that the adoption of an RTA as trade policy is not made independently of the decision by other states. Indeed, the analysis suggests interdependency between states. Further empirical analysis explores economic and political variables that may explain the decision to adopt the RTA as trade policy. The empirical analysis is unique in that survival analysis is utilized to assess the variation in duration to adopt an initial RTA since the early 1980s. A central discovery is that regional designation explains the variation in duration to adopt an initial RTA. Multiple regression analysis confirms the results generated using survival analysis and support the assertion that the proliferation of RTAs likely reflects changes in both the demand for RTAs and the supply of RTAs. This dissertation concludes by considering implications for the WTO resulting from the increase in RTA notifications. |
| Keyword | trade agreements |
| Coverage date | after 1980 |
| Language | English |
| Part of collection | University of Southern California dissertations and theses |
| Publisher (of the original version) | University of Southern California |
| Place of publication (of the original version) | Los Angeles, California |
| Publisher (of the digital version) | University of Southern California. Libraries |
| Provenance | Electronically uploaded by the author |
| Type | texts |
| Legacy record ID | usctheses-m1675 |
| Contributing entity | University of Southern California |
| Rights | McClough, David Andrew |
| Repository name | Libraries, University of Southern California |
| Repository address | Los Angeles, California |
| Repository email | cisadmin@lib.usc.edu |
| Filename | etd-McClough-2338 |
| Archival file | uscthesesreloadpub_Volume32/etd-McClough-2338.pdf |
Description
| Title | Page 67 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 58 reflects the higher costs associated with the expanding membership of the GATT/WTO. Krugman (1993) asserts that the surge in membership is incompatible with the growing complexity of the trade negotiations. This perspective does not consider how diminishing returns apply to RTAs as well as multilateral negotiations. Whereas these theorists are hypothesizing that diminishing returns explains the current proliferation of RTAs, the analytical framework presented in this study argues that diminishing returns offers the motivation to transition from multilateral negotiations to RTAs and back to multilateralism as diminishing returns exhaust the benefits associated with the two principle forms of trade liberalization. Elementary economics texts indicate that diminishing returns can be delayed by technological innovation. This fundamental principle of economics is also accommodated in the analytical framework presented in this study. The sustained increase in RTA notifications to the GATT/WTO is due, in part, to technological innovation relating specifically to the development of new RTAs. As innovative RTAs are presented to the market, the law of diminishing returns persists but is stalled thus resulting in more adoption of RTAs rather than a return to multilateralism. The argument presented herein is that RTAs and the GATT are not perfect substitutes. Although one is substituted for the other, the two forms of trade liberalization exist in concert to provide the public good: free trade. On this basis, one can argue that the two forms of trade liberalization are complements in that RTAs increase desired trade liberalization unavailable through the GATT/WTO at any given time. Similarly, as the benefits associated with RTAs are exhausted given a level of technology, |
