Unpacking Policy Space in International Trade Law: The Auto Industry in Brazil and the United States

Abstract

This thesis aims to deconstruct the notion of policy space in international trade law. It presents the idea of “unpacking policy space” to suggest that policy space is not merely a concept relating to what room for policy is available under the law. Rather, it demonstrates that this commonly used concept overlooks important regulatory influences that define countries ability to regulate.

The dissertation makes two main claims. First, it claims that policy space for industrial and developmental policies extends beyond WTO law and depends not only on international rules; but rather, on systems of domestic and transnational rules and regulations. Second, it argues that by analyzing how different domestic structures lead to different regulatory preferences and possibilities, this analysis provides an insight into how similar transnational and international rules translate differently into different countries. It presents four case studies that assess how the existing regulatory frameworks shaped policies for the automotive industry in Brazil and the United States. The case studies analyze the legal architecture and meaning of industrial policies developed by Brazil and by the United States in the years during the establishment of the WTO (1993-1999) and, subsequently, in the financial crisis period (2007 – 2013).

The thesis reveals how day-to-day background operations within the international trade system result in a pre-selected range of ideological, political and economic choices within a much broader universe of possibilities even before the engagement of governments and other international actors. In doing so, it fills a gap in the literature that has traditionally focused on the relationship between national economic policies and international rules to understand regulatory constraints and policy space in the trading regime. It contributes to the literature by suggesting that regulatory options vary according to the level of regulation for each specific sector as well as in relation to countries’ domestic structures and institutions. It deconstructs the supposed institutional neutrality embedded in the notion of policy space by providing a realist analysis of background norms and legal processes in the global economy. In doing so, this thesis aims to expose ideological biases within the notion of policy space and explain the distributional outcomes that derive from it