International Institutions and Domestic Coalitions : The Differential Effects of Negotiations and Judicialization in European Trade Policy

In this paper, I analyze the impact of international trade institutions on domestic coalition formation. I argue that the size of coalitions crucially depends on the degree of institutionalization and judicialization of international trade institutions. The traditional political instrument of international trade negotiations fosters broad, sector-wide coalitions on the part of private industry, whereas judicialization in trade relations leads to a fragmentation of these domestic trade policy coalitions. The reason is that reciprocal trade negotiations - both liberalizing or trade restricting - incite government negotiators to strive for package deals, for which they seek to secure political support from sector-wide coalitions, often organized in industry peak associations. Case-by-case judicialized procedures, on the other hand, such as anti-dumping and market access investigations, or international dispute settlement, essentially de-link issues, moving interest representation to the level of intra-sectoral trade associations. In contrast to existing, predominantly economic explanations, this international institutional explanation can account for coalition patterns during both GATT (1947-1994), which consisted of a series of trade negotiation Rounds, and the WTO (1995-), which combines the reciprocity of negotiations with the multilateral spread of judicialized trade policy instruments. Comprehensive databases provide evidence related to the predominantly intra-sectoral trade associations that lodge complaints with judicialized instruments, while qualitative analysis of domestic coalitions in the EU reveals how sector-wide peak associations organize during negotiation Rounds and have reshuffled their membership structures in order to better accommodate the interests of their constituent product-specific members. The increasing role of the 'rule of law' in international trade relations, therefore, has a fragmenting and dividing effect on the coalitions that inform contemporary trade policy-making