Social protectionist bias: The domestic politics of North–South trade agreements

Abstract

North–South preferential trade agreements (PTAs) have proliferated rapidly in the past decades. Despite a common focus on trade liberalisation, these preferential trade agreements differ greatly in their inclusion of labour and environmental provisions. A difference in the enforcement of these social standards is also puzzling: some preferential trade agreements envision sanctions for non-compliance while others do not. What explains this variation? We argue that Northern governments have their hands tied by domestic constituents demanding social standards as a key protectionist instrument. However, different electoral rules moderate the success of these demands. Because majoritarian systems provide a more efficient channel for the mobilisation of protectionist interests, they are more prone to social protectionist bias than their proportional representation counterparts. We assess our hypotheses using panel regressions of all North–South preferential trade agreements. Our analysis refines previous findings on tariff and non-tariff protectionist bias in majoritarian systems and shows how it is manifested in the design of preferential trade agreements.