Different countries same partners: Experimental Evidence on PTA Partner Country Choice from Costa Rica, Nicaragua and Vietnam
NCCR Working Paper No 2014/17 by Víctor Umaña, Gabriele Spilker and Thomas Bernauer
Preferential trade agreements (PTAs) are the most rapidly growing form of trade liberalization in the global economy, and many of these agreements involve developing countries. In contrast to trade liberalization via the World Trade Organization (WTO), PTAs discriminate among member countries raising the question which countries are preferred partners. Existing research analyzes partner country choices for PTAs at the macro (country) level. Even though public opinion is important in trade policy-making for normative and analytical reasons, we know very little about what types of countries citizens prefer for PTAs. We develop several hypotheses to that end, drawing on macro-level trade theories and micro-level evidence from advanced industrialized countries, and test them based on original data from Costa Rica, Nicaragua, and Vietnam. To account for the multidimensionality of PTA partner choice, we use conjoint experiments embedded in three national surveys. The results show that, despite differing country contexts, citizens in all three countries opt for similar PTA partners. We also find that cultural and political factors matter more than economic factors. Respondents prefer PTAs with culturally similar countries, whereas economic size and geographic distance are of lesser importance. One of the most surprising findings is, however, that people in all three countries, even in the poorest and most rapidly growing of the three countries (Vietnam), which is also the only autocratic country in the sample, prefer trade with countries that are democratic and have high environmental and labor standards. We also show that popular preferences line up well with the actual set of PTA partners of Costa Rica and Nicaragua, but less so in the case of Vietnam.