Initiator conditions and the diffusion of digital trade-related provisions in PTAs

Abstract

Digital trade has become an important driver of global commerce and accounts for an increasing share of many countries’ economies. While progress in digital trade-related discussions at the World Trade Organization has been limited until fairly recently, the topic has gradually been gaining importance in preferential trade agreements (PTAs) since the early 2000s. As we also observe that digital trade governance has become increasingly politicized, we know little about these provisions’ origins and diffusion in PTAs. This research note discusses novel data and analyzes 91 digital trade-related provisions and 347 trade agreements signed between 2000 and 2019. In this note, we focus primarily on the initiator conditions and how these might lead to differences in diffusion patterns. We find that almost half of digital trade-related provisions were initially introduced by PTAs in which the United States was a signatory. Using negative binomial regressions, we find no evidence, however, that these provisions diffuse relatively more often than provisions first introduced by other countries. Our analysis shows that the diffusion of digital trade-related provisions is influenced by original trade interests and the existence of domestic digital policies at the initiator stage. Interestingly, we find that the initial degree of legalization of the provisions themselves matters for a more substantial diffusion, which contradicts the established view that soft law provisions are the preferred approach for new trade topics. This research note highlights the need to factor in the extent to which new international law obligations are adopted through the treaty networks as a result of initiator conditions addressing a certain blind spot in the diffusion literature. By focusing on the initiating states, we also speak to the literature on how international agreements serve to diffuse leading states’ preferred policy options.