The Influence of Trade Agreements on Foreign Policy

Abstract

Since the failure of the Doha round of negotiations, the number of trade agreements between countries has increased exponentially worldwide. The premise being that trade agreements tie nations closer together lessening the chance of disagreements between countries. This paper focuses on the trade policy of the United States over the past 35 years. The US is relatively new to the trade agreement world, signing its first Free Trade Agreement in 1985, but has increased the number of agreements in the past decade. Using Ideal Points of UN voting as an indicator, this paper shows that the US is fighting an uphill battle to gather allies closer. Building off a novel dataset covering 124 countries in the timespan between 1982 and 2012, I show that trade agreements can positively affect the Ideal Point when utilized with other US government resources, but the effects are minimal. From a public policy perspective these findings imply that even though countries are not agreeing with the US viewpoint in UN fora, trade agreements used in conjunction with other assistance can help bind allies closer to the US Ideal Point thus the US should concentrate on signing agreements with allies.