Poli 575: International Economic Negotiations Preliminary syllabus subject to change

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1 Monday 9:35-12:25 Leacock 424 Prof. Mark S. Manger Office: Leacock 329 Phone: Office hours: Mondays, 16:00-18:00. Objectives: Prerequisites: Requirements: Weight for grades: This course provides an overview of the multilateral and regional trade institutions, their functioning and negotiation. We will explore theoretical explanations for how and why these institutions evolved, how they are created through negotiation, and look at several empirical cases the WTO, NAFTA and other agreements in the western hemisphere and around the Pacific Rim. Case studies and simulations are used to learn concepts and principles from theories of cooperation and bargaining and to develop negotiation skills. Students will develop a strong substantive knowledge of trade policy. Teamwork and participation are important in this seminar. The course should be particularly useful for students who want to do graduate work in IPE, public policy or international law, or who want to pursue a career in international organizations. The course is an advanced seminar for honours students only. It assumes familiarity with the major schools of IR theory and a (very) basic understanding of international economics, although we will introduce the necessary concepts as they appear in the readings. Ideally, you should have taken Poli 243 and 354. The course has five formal requirements: a take-home midterm, class participation and readings, preparation of and participation in the simulation of an international negotiation, a one-page paper proposal, and either a research or policy paper of about 15 pages in length. Take-home midterm 20% Class participation 20% Simulation exercise 20% Paper proposal 10% Term paper 30% Take-home midterm: The exam consists of short definitions of concepts and one essay questions. It will be available on WebCT Vista so you have to have internet at home during the days when the exam can be written or be prepared to work in the library. The best short definitions will be anonymized and made available for all seminar participants on WebCT after the exam has been marked, providing a useful resource for the papers. Class participation: This is a seminar and as such, it depends on your and other students contributions, insightful comments, and probing questions that help everyone learn. Most useful is constructive critique of the readings which must therefore be read ahead of time (that means before the class). As you do the readings, you should take detailed notes with page numbers. In addition to regular participation, for every session we will designate two note-takers who will type up the findings of the discussion of that week. When you re a note-taker, you re not required to participate (although you may if you wish). The notes will be graded, counting as participation mark for that session, and made available to the whole class after I have checked them for completeness, allowing everybody to devote full attention to the discussion when not taking notes. Typed-up notes must be turned in by within three days of the class. Unexcused absences will be noted as a zero grade for that particular session. Poli 575 Honours Seminar: Regionalism and the Multilateral Trade Regime - Winter

2 Simulation exercise: we will conduct a three-hour simulation of a negotiation. The class will be divided up into several groups that are allocated randomly negotiators, firms, unions, etc. each with a specific set of instructions for what they are to achieve in the negotiation. The simulation involves writing up brief policy statements before the negotiations if you are representing an interest group, or a policy brief after the negotiations if you are acting as a negotiator. Detailed instructions will be given out in class. Paper proposal: To prepare the final papers, you are required to write up a one-page proposal (12pt font, singlespaced, 2.5 cm margins) that presents the issue, your central thesis, a brief overview of the argument, and what evidence you plan to present and what material you will use. Short proposals are standard when applying for graduate school or scholarships, or when planning internal projects in the public and private sector. To discuss your proposal before the due date, you should come to speak to me on March 26 or 27. A sign-up sheet will be provided. The proposal is due on March 30th. Term paper: You are required to write either a policy paper or research paper of no more than 15 pages plus bibliography, 12pt font, double-spaced with 2.5 cm margins, or single-spaced with 4.5 cm margins. Both types of papers require full citations according to an accepted style guide. Turabian or Chicago style with footnotes is preferred. The paper is due on April 12 th. Late papers will only be accepted for medical reasons and require a doctor s note. If you cannot see your family doctor, you can go to McGill Health Services. Research paper option: Policy paper option: The paper should contain all the elements of an actual research paper investigating an empirical problem in other words, a paper asking a question like why do we observe such a phenomenon. To this end, you need to write an introduction, describe the problem, review the literature, develop a model or theoretical framework, state a hypothesis, and present evidence. You are required to write a policy paper describing the problems, background, goals and strategies in an upcoming trade negotiation, directed at the chief negotiator of a country usually Canada, although if you plan to work for a different country (e.g. if you hold a different citizenship), I encourage you to write the policy paper for this country s negotiating team instead. The paper should contain all the elements of an actual policy paper: an introduction, an executive summary of one page, some background on the issues, possible demands of the other side, and clear goals and strategies to achieve them. In addition, you should include a two-page outline of the institutional context of the negotiations (WTO Ministerial? Bilateral agreement?), the issue area (services? agriculture?), and what agencies and bureaus are involved on your side. Course reader: the reader will be made available for purchase at the bookstore. Books: they are available at the bookstore for purchase and on one-day reserve at the library, all of them much cheaper than your average textbook. The last is definitely useful beyond your university years, the first two you might be able to sell if the course is offered again. Mayer, Frederick Interpreting NAFTA: The Science and Art of Political Analysis. New York: Columbia University Press. Cameron, Maxwell A. and Brian W. Tomlin The Making of NAFTA: How the Deal Was Done. Ithaca, NY: Cornell University Press. Dixit, Avinash, and Barry Nalebuff Reissue. Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life. New York: W.W. Norton. Plagiarism: McGill University values academic integrity. Therefore all students must understand the meaning and consequences of cheating, plagiarism and other academic offences under the Code of Student Conduct and Disciplinary Procedures (see for more information). Be it further resolved that failure by an Poli 575 Honours Seminar: Regionalism and the Multilateral Trade Regime - Winter

3 instructor to include a statement about academic integrity on a course outline shall not constitute an excuse by a student for violating the Code of Student Conduct and Disciplinary Procedures. Session 1: Introduction (January 8) Get started on the readings for week 2. Session 2: Foundations: The ITO, the GATT, and the WTO (January 15) How did the world trading system evolve in its current form? What are the fundamental legal and economic principles on which it is based? What are the principal schools of thought in interpreting the world trading system? What are their independent and dependent variables? Read the following articles on the WTO website: What Is the World Trade Organization?, and linked from there Principles of the Trading System, The GATT Years, and The Uruguay Round. Historical Overview: Douglas A. Irwin The GATT in Historical Perspective. American Economic Review 85 (2): (JSTOR) Stephen D. Krasner, State Power and the Structure of International Trade, World Politics 28, 3 (1976), pp (JSTOR) Stephan Haggard and Beth A. Simmons, Theories of International Regimes. International Organization 41, 3 (1987), pp (JSTOR) Steinberg, Richard H In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the GATT/WTO. International Organization 56 (2): (Cambridge Journals online) Session 3: Domestic Sources of Trade Policy Orientation (January 22) How do the Stolper-Samuelson and Ricardo-Viner theorems explain trade policy preferences? Is factor mobility best seen as continuous or as dichotomous? How might political institutions affect the making of trade policy? Review Article: James E. Alt, Jeffry Frieden, Michael J. Gilligan, Dani Rodrik, and Ronald Rogowski, The Political Economy of International Trade: Enduring Puzzles and an Agenda for Inquiry, Comparative Political Studies 29, 6 (1996), pp (CSA-Illumina) Michael Gilligan, Lobbying as a Private Good with Intra-Industry Trade. International Studies Quarterly 41 (1997), pp (JSTOR) Michael J. Hiscox, Class Versus Industry Cleavages: Inter-Industry Factor Mobility and the Politics of Trade, International Organization 55 (Winter 2001): (Cambridge Journals online) Stephen P. Magee et al. Three Simple Tests of the Stolper-Samuelson Theorem. In Black Hole Tariffs and Endogenous Policy Theory: Political Economy in General Equilibrium (Cambridge University Press, 1989): Session 4: Tariffs, Non-Tariff Barriers, and Subsidies (January 29) How are tariffs treated in the WTO negotiations? What alternative tools do states have at their disposal to satisfy the demands of interest groups? If protectionism is politically so well entrenched, why do we see liberalization? WTO Website, read Tariffs, Anti-dumping, subsidies, safeguards and Non-tariff barriers. Robert E. Baldwin, Imposing Multilateral Discipline on Administered Protection, in The WTO as an International Organization, edited by Anne O. Krueger (University of Chicago Press, 1998): Poli 575 Honours Seminar: Regionalism and the Multilateral Trade Regime - Winter

4 Patrick A. Messerlin, Antidumping and Safeguards, in The WTO after Seattle, edited by Jeffrey J. Schott (Institute for International Economics, 2000): Hathaway, Oona A Positive Feedback: The Impact of Trade Liberalization on Industry Demands for Protection, International Organization 52 (3): (JSTOR) Goldstein, Andrea E. and Steven M. McGuire The Political Economy of Strategic Trade Policy and the Brazil-Canada Export Subsidies Saga. World Economy 27 (4): (Blackwell) Session 5: Preferential Trade Agreements (February 5) Why have preferential trade agreements multiplied in recent years? Are today s PTAs the same as those of the 1960s? What are the respective interests of developed and developing countries? What domestic interests supports PTAs? How does the GATT/WTO circumscribe preferential trade agreements? Kerry A. Chase, Economic Interests and Regional Trading Arrangements: The Case of NAFTA, International Organization 57, 1 (2003), pp (Business Source Premier) Wilfried J. Ethier, The New Regionalism, Economic Journal 108, 449 (1998), pp (JSTOR) Anne O. Krueger, Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist? Journal of Economic Perspectives 13 (1999), pp (JSTOR) Mark S. Manger Competition and Bilateralism in Trade Policy: The Case of Japan's Free Trade Agreements. Review of International Political Economy 12 (5):1-25. (Metapress) Session 6: Services in the WTO: The GATS (February 12) Why did services become the object of multilateral negotiations? What are the particular characteristics of services negotiations? Who are the winners, who are the losers? WTO Website, read: Services: rules for growth and investment Hoekman, Bernard M. and Carlos A. Primo Braga Protection and Trade in Services: A Survey. Open Economies Review 8 (3): (Springer online) Chanda, Rupa Social Services and the GATS: Key Issues. World Development 31 (12): (Science Direct) Mattoo, Aadiya "Developing countries in the new round of GATS negotiations: Towards a pro-active role." World Economy 23 (4): Session 7: Negotiations: Analysis and Institutional Context (February 26) Robert D. Putnam, Diplomacy and Domestic Politics: The Logic of Two-Level Games, International Organization 42 (1988), pp (JSTOR) Moravcsik, Andrew (1993). Introduction: Integrating International and Domestic Theories of International Bargaining, in Evans, et al. Double-Edged Diplomacy: International Bargaining and Domestic Politics. Berkeley: University of California Press (pp. 3-42). JX1395 D Dixit and Nalebuff, Thinking Strategically, Chapters 2-3 (pp ). Poli 575 Honours Seminar: Regionalism and the Multilateral Trade Regime - Winter

5 Session 8: Negotiating and the Best Alternative to a Negotiated Agreement (March 5) Dixit and Nalebuff, Thinking Strategically, pp Dixit, Avinash and Susan Skeath Games of Strategy. New York: W. W. Norton: Odell, John S Negotiating the World Economy. Ithaca, NY: Cornell University Press: Session 9: Case Studies: NAFTA Part 1 (March 12) Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA, pp Frederick Mayer. Interpreting NAFTA, pp Session 10: Case Studies: NAFTA Part 2 (March 19) Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA, pp Frederick Mayer. Interpreting NAFTA, pp Meeting to discuss paper proposals. No class on March 26. Session 11: Negotiation Simulation on Rules of Origin (April 2) Frederick Mayer. Interpreting NAFTA, pp Session 12: Debriefing Simulation Experience (April 9) Debriefing and discussion of the simulation. Poli 575 Honours Seminar: Regionalism and the Multilateral Trade Regime - Winter