Kick‐starting diffusion: Explaining the varying frequency of preferential trade agreements’ environmental provisions by their initial conditions

• Author: Axel Berger,Jean‐Frédéric Morin,Clara Brandi,Dominique Blümer
• Date: 01 September 2019
• Published date: 01 September 2019
• DOI: http://doi.org/10.1111/twec.12822

2602

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World Econ. 2019;42:2602–2628.

wileyonlinelibrary.com/journal/twec

Received: 8 July 2018

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Revised: 24 April 2019

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Accepted: 8 May 2019

DOI: 10.1111/twec.12822

ORIGINAL ARTICLE

Kick‐starting diffusion: Explaining the varying

frequency of preferential trade agreements’

environmentalprovisions by their initial conditions

Jean‐FrédéricMorin1

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DominiqueBlümer2,3

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ClaraBrandi3

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AxelBerger3

1Political Science,Universite Laval, Quebec City, Canada

2Eidgenossische Technische Hochschule Zurich Center of Economic Research, Zurich, Switzerland

3German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Bonn, Germany

KEYWORDS

environmental policy, environmental protection, environmental regulation, policy diffusion, Trade agreements

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INTRODUCTION

Recent preferential trade agreements (PTAs) include ever more far‐reaching provisions on environmen-

tal protection (Lechner, 2016; Milewicz, Hollway, Peacock, & Snidal, 2016; Morin, Dür, & Lechner,

2018). Such PTA provisions do not just appear in the form of exceptions to trade commitments for envi-

ronmental purposes, modelled on article XX of the General Agreement on Tariffs and Trade (GATT).

Rather, they include specific prescriptions, requiring states to adopt high environmental standards.

Some of these provisions address specific environmental issues, such as the protection of fish stocks,

deforestation and the mitigation of CO2 emissions. Other environmental provisions promote the har-

monisation of environmental policies, encourage trade in environmental goods, reinforce multilateral

environmental agreements (MEAs) or call for the transfer of green technologies to developing countries.

Modern PTAs also include various instruments to support the implementation of these environmental

provisions, ranging from intergovernmental committees to binding dispute settlement mechanisms.

Negotiators rarely reinvent the wheel when integrating environmental provisions in new PTAs.

Most of the time, they copy environmental provisions that have been included in their earlier PTAs,

their trading partners' PTAs or even third countries' PTAs (Allee & Elsig, 2016; Alschner, Seiermann,

& Skougarevskiy, 2017; Baccini, Dür, & Haftel, 2015). For example, while the Trans‐Pacific

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction

in any medium, provided the original work is properly cited.

© 2019 The Authors. The World Economy published by John Wiley & Sons Ltd.

1 Due to the withdrawal of the USA from the agreement, the other 11 signatories signed the Comprehensive and Progressive

Agreement for Trans‐Pacific Partnership. The main text, including the environmental provisions, of the new agreement

remains largely unchanged.

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MORIN etal.

Partnership concluded in 2015 entails a record number of environmental provisions, only one of them,

on fisheries, is really a new provision (Morin, Pauwelyn, & Hollway, 2017).1

All the other provisions

included in the 26‐page‐long chapter devoted to the environment were duplicated from previous PTAs.

This uncoordinated spread of similar policy models among interdependent political units is often

referred to as policy diffusion (e.g., Elkins & Simmons, 2005). Consider the following diffusion of

a provision that states that certain MEAs shall prevail over the trade agreement in case of legal in-

consistency. This provision was first introduced in the trade system with the conclusion of the North

American Free Trade Agreement (NAFTA) in 1992 (Article 104). It was subsequently replicated in

dozens of trade agreements, including in PTAs that involve none of the NAFTA partners, such as the

2008 agreement between ASEAN and Japan.

While some environmental provisions were duplicated in more than 100 PTAs, other environmen-

tal provisions are only rarely included in subsequent PTAs or are unique to only one PTA (Morin &

Gauthier‐Nadeau, 2017). For example, the requirement to ratify the Montreal Protocol on the Ozone

Layer is unique to the 1993 agreement establishing the Common Market for Eastern and Southern

Africa. No other PTA has replicated this requirement. This paper addresses this puzzle and investi-

gates why certain environmental provisions diffuse more than others.

Explaining the diffusion of environmental provisions in PTAs matters for several reasons. First,

a number of studies suggest that the inclusion of environment‐related content in PTAs is linked to

improved environmental performance (Baghdadi, Martinez‐Zarzoso, & Zitouna, 2013; Bastiaens &

Postnikov, 2017; Jinnah & Lindsay, 2016; Martinez‐Zarzoso, 2018). Thus, understanding the condi-

tions of their diffusion matters for those who care about environmental performance and would like

to see more of these provisions diffusing into the trade regime. Second, it is important to study the

diffusion of environmental provisions in order to better understand how the increasingly fragmented

trade governance architecture remains coherent and relatively ordered (Biermann, Pattberg, van

Asselt, & Zelli, 2009). While the entropic forces that contribute to fragmentation are relatively well

known, including coalitions obstructing multilateralism and power asymmetries fuelling bilateral-

ism, the forces that glue the trade regime together and prevent it from falling into a regulatory chaos

are less well understood. Third, it is necessary to understand under which conditions environmental

provisions diffuse in order to assess the prospect and the legitimacy of a potential future multilater-

alisation of environmental provisions (Morin, Brandi, & Berger, 2019). If the diffusion of environ-

mental provisions is driven merely by powerful countries taking advantage of asymmetrical power

relations, then their multilateralisation might be viewed as a hegemonic enterprise. If the diffusion

of environmental provisions is instead driven by environmental leaders, then the fragmentation of

trade governance could be regarded as productive from the perspective of environmental protection.

In this paper, we hypothesise that the initial conditions under which provisions first emerge in the

trade system determine the scope of their diffusion. In doing so, this paper makes two key contribu-

tions to current scholarship. First, the existing literature on trade negotiations tends to explore the

diffusion of PTAs in general or the diffusion of certain PTA models. We depart from this literature

by analysing the diffusion of specific provisions. This fine‐grained analysis allows us to offer micro‐

level insights that are distinct—but related—to the more macro‐diffusion of PTA models and PTAs

in general.

Second, most of the literature on policy diffusion tries to explain how the process of diffusion takes

place and assesses the explanatory power of different causal mechanisms (Gilardi, 2013). Elkins and

Simmons(2005), for example, make it clear that they study the process of diffusion, not its outcome.

We take a different but complementary approach by investigating why certain provisions diffuse more

often than others rather than how provisions are diffusing. Our aim is to explain the diffusion out-

come, not document the diffusion process.