Trading gains for control: International trade forums and Japanese economic diplomacy

Abstract

The explosive proliferation of trade forums poses fundamental questions about why states forum-shop as they pursue liberalization. We advance a novel argument linking the institutional design of international trade forums directly to domestic politics. If industrialized democratic states have to appease conflicting forces in the domestic political marketplace as economic liberalization proceeds apace, they should prioritize forums that allow them to exert greater control over the pace and scope of liberalization. This prioritization is influenced by a tradeoff between two critical dimensions that combine differently across all international trade forums: the gains dimension, which determines the extent to which states can increase economic welfare based on the forum's rules; and the control dimension, which determines the extent to which they have power to set the forum's rules in line with their political concerns. We use the case of Japan to demonstrate the importance of the gains-control tradeoff. © 2007 International Studies Association.