International Institutions and Domestic Coalitions: Negotiations, Judicialisation and Collective Action in Trade Policy

What is the impact of international trade institutions on industry collective action in trade policy? Existing explanations of coalition patterns in domestic trade policy tend not to assign independent causal effects to international trade institutions. These explanations conceive of trade policy institutions as endogenous, i.e. dependent on socio-economic and industrial developments, and a mere reflection of reigning economic circumstances, like the rise in intra-industry trade. In this paper, we argue that international trade institutions are a key factor influencing the size of trade policy lobbying coalitions. More specifically, we contend that the institutional setting of international issue-linkage based negotiations creates incentives for firms to join and work through broad sector-wide coalitions, while more judicialized or legalized trade policy making de-links issues and fosters lobbying specialization on the product level. This international institutional explanation can account for the variation in the size of domestic lobbying coalitions during GATT (1947-1994) – mainly a series of multilateral trade Rounds – as compared to the WTO (1995-), a forum for both multilateral negotiations and judicialized trade policy making. We show the cogency of our argument with quantitative and qualitative evidence from US and EU trade policy lobbying in the previous half century. While sector-wide trade associations mobilize, even in the face of increasing intra-industry trade, to weigh on negotiation rounds, intra-sectoral lobbying rises only in line with increasing judicialization.