The Economic Diplomacy of Trade Blocs: Going Together or Alone? A Multi-Level Network Model of Plurilateral Trade Relations

When do collective aims trump strategic interests when it comes to negotiating preferential trade agreements (PTAs)? The number of regional integration organisations vastly increased in the aftermath of the cold war. Moreover, an ever-growing number of states negotiate and sign PTAs with third parties as a single group, representing a common interest. While depth of integration clearly defines the political space in which states navigate, an increasing number of moderately integrated groups of states decide to jointly negotiate trade agreements, without any prejudice to member states' rights to negotiate bilateral agreements. For many states, this offers new opportunities as they face the choice whether to negotiate agreements individually or as part of a larger group. This paper employs quantitative methods and network analysis in order to analyse (i) the political and economic benefits and costs of negotiating as a group as well as (ii) the conditions under which certain states decide to go alone, rather than being part of a (potential) coalition. Using multilevel-network models, the relevance of trade relationships and previous trade agreements both on international and regional level is scrutinized in a large-N analysis. This approach takes into account possible spill-over effects of agreements signed by single member states of regional IOs as well as network effects influencing the choices of potential accession candidates to IOs. A number of interviews with trade representatives and negotiators shed light on the rationale of the decision between individual and group negotiations.