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Explaining Business Support
for Regional Trade Agreements
RONALD W.COX
One of the most important developments in the international
trading system has been the recent proliferation of regional trade
agreements (RTAs), like the European Union’s single market, the
North American Free Trade Agreement (NAFTA), or the Caribbean
Basin Initiative (CBI). Ronald W.Cox offers a domestic societal
explanation for the growth of these arrangements and argues
that business interests—in the United States, at least—are divided
into two communities, both of which support regional agreements,
but for different reasons. Although they often back RTAs as
stepping stones to greater liberalization, “multilateralists” prefer
the comprehensive trade negotiations of the World Trade
Organization. “Regionalists,” on the other hand, prefer more
limited RTAs because they give firms preferential access to both
low-wage export platforms and rich country markets, and thus,
important advantages relative to their foreign competitors. Cox
examines the economic preferences and political strategies of
the American automotive and consumer electronics industries
(both of which are strong regionalists) in the cases of the CBI
and NAFTA.... [O]ne of the primary roles of the U.S. executive branch in foreign economic
policy has been to facilitate the accumulation of capital on a global scale by
working to promote the conditions for profitable trade and investment for U.S.-
based transnational corporations. In the area of U.S. trade policy, the degree
to which the state performs this task is dependent in part on the political
mobilization of sectors of business that articulate their demands to influential
state actors. In addition, divisions among diverse business sectors often will
be reflected in policy debates, with business internationalists joining with the
White House, State Department, and Treasury to advocate measures to facilitate
increased trade and foreign direct investment and business nationalists and
labor groups joining with congressional representatives to promote protectionist
measures. Throughout much of the post-World War II period, a dominant liberal-
internationalist coalition of business groups, political elites, and intellectuals
advocated a U.S. commitment to the policies of multilateralism embodied in
the GATT agreements.