https://orcid.org/0000-0002-7396-7891
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Abstract
Following decades of relative isolation, China and India have become the world’s largest new traders. In this paper, we focus on their Preferential Trade Agreements (PTAs). While the two economies initially followed similar paths, with a growing number of PTAs signed in the first decade of the 21st Century, since 2011 India has taken a U-turn and stopped completing them. China, on the other hand, has widened and deepened its trade agreements. We present a novel theoretical framework to analyze international economic negotiations by emerging economies and use it to study the puzzling divergence of the trade policies of China and India. By adapting the two-level game framework to emerging economies, we argue that there are key differences in the political economies of countries like China and India (compared to Western industrialized ones), which requires a more specific focus on the domestic side of the two-level game. We show that accounting for non-legislative domestic ratification processes and for iterative games and experiential learning by domestic actors are crucial in understanding the trade strategies of emerging economies. While much of the literature explains large emerging economies by looking at external systemic factors, we instead suggest that their domestic politics trumps international politics.
Acknowledgements
The authors would like to thank Florence Dafe, Eugenia C. Heldt and Manoj Pant, as well as the editors at RIPE and three anonymous reviewers, which kindly reviewed earlier versions of this manuscript and provided valuable suggestions and comments.
Notes
1 Annex 1 provides anonymized information on the 22 interviews quoted in the paper.
2 See: https://www.designoftradeagreements.org/, last accessed 21 February 2022.
3 World Bank national accounts data, and OECD national accounts data files. Available at: data.worldbank.org. Last accessed, 8 October 2021.
4 See the DESTA database (current version January 2022): https://www.designoftradeagreements.org/downloads/. Last accessed 21 February, 2022.
5 Interview 2.
6 Interview 4.
7 Interview 2.
8 Interview 20.
9 Interview 12.
10 Interviews 6 and 9.
11 Interview 2, 3 and 5.
12 Interview 3.
13 Interview 5.
14 Interview 2.
15 Interview 6.
16 Interviews 1, 3, 9, 18.
17 Interview 1.
18 Interviews 3, 6, 9, 18.
19 Interview 7.
20 Interview 5.
21 Interviews 6, 8 and 9.
22 Interview 12.
23 Interview 14.
24 Interview 11.
25 USTR: US-India bilateral trade and investment. Last accessed 13.01.2021
26 Interviews 13, 14.
27 Interview 11.
28 Interview 18.
29 Interview 11.
30 Interview 16.
31 Interview 14.
32 Interview 22.
33 Interview 22.
34 Interview 22.
35 See: https://www.niti.gov.in.
Additional information
Notes on contributors
Omar Ramon Serrano Oswald
Omar Ramon Serrano Oswald is a Research Associate in International Political Economy at the Technical University of Munich where he leads as Principal Investigator a German Science Foundation (DFG) project evaluating Chinese investors’ overseas practices and their global impact. His research interests include emerging economies, global economic governance, and multinational corporations’ impact on sustainability, labor and environmental standards.
Jappe Eckhardt
Jappe Eckhardt is Senior Lecturer in International Political Economy at the University of York (UK). His research interests include trade politics, global value chains, business-government relations and the role of emerging markets in the global economy.