Free Trade Agreement And Democracy

The global economic system is fundamentally capitalist and trade agreements are part of the management of this market regime. This structure, often referred to as regulatory capitalism, is increasingly dominated and governed by a system of administrative rules that are neither obvious nor transparent to the populations concerned (Levi-Faur, 2005). Trade agreements have often been implemented to reduce or eliminate the anti-competitive effects of certain policies, such as tariffs, to allow for freer trade across national borders. However, as Vogel has argued, more open markets also appear to have more rules (Vogel 1996). Scientists are not yet in a position to understand the consequences of trade agreements on the implementation of such a regime of regulatory capitalism, and future research should actively seek to understand and study them. I have argued that efforts to achieve this must be examined on the impact of international trade agreements on the liberal character of democratic states that agree to participate. Our analysis also shows that rent-destroying agents in free trade agreements are the main drivers of results. Our forecasts, for example, are consistent in favour of agreements that liberalize most of the trade between the parties involved. On the other hand, estimates generally cannot be distinguished from zero for partial agreements signed under the GATT enabling clause, which allow for many exceptions and therefore protect few restrictions on the availability of rents. It is also possible that free trade agreements will help to maintain democracies not because of their effects on rent destruction, but because of pressure from more democratic partners in the free trade agreement.

While this is a highly plausible alternative mechanism, our empirical tests indicate that free trade agreements with more democratic partners are as valuable to the sustainability of a country`s democracy as free trade agreements with less democratic partners. The graph below produces their share of strange bed companions. Despite their ideological and diplomatic differences, the United States and France occupy almost exactly the same real estate in terms of political freedom and economic openness. Strengthening trade and economic integration directly promote civil and political freedoms by opening up a society to new technologies, communications and democratic ideas. Free Trade Agreement and Consolidation of Democracy On the face of it, the inclusion of a democratic provision in the EPZs seems to indicate geopolitical motivations, although the most democratic countries are, with a few exceptions, more open to trade. Political stabilization was clearly the main objective of the European Union in the 1950s, and this was also the case in the 1980s with the Mediterranean countries and in the 1990s with the enlargement of the EU to former socialist countries in Eastern Europe.