Table of Contents

Contents and Abstracts1Trade Composition and the Global Political Economy chapter abstract

This chapter introduces the distinction between intra-industry and inter-industry trade, highlighting the qualitative shift in the nature of trade over the past several decades. It also introduces the research question that serves as motivation for the book: Why does trade appear to be such a powerful force for peace and cooperation today if it was not so historically? The chapter then discusses why the emergence of intra-industry trade could explain this change in the relationship between trade and international politics.

2Conceptualizing and Operationalizing Intra-Industry Trade chapter abstract

This chapter discusses the several challenges associated with measuring intra-industry trade. The argument is advanced in favor of using the bilateral, two-way trade of commodities at the Standard International Trade Classification (SITC) 4-digit level as a measure of intra-industry trade best suited to capture states' propensity for cooperation. The chapter concludes with a discussion of how intra-industry trade varies over time.

3Cooperating to Compete: Intra-industry Trade and the Formation of Preferential Trade Agreements chapter abstract

This chapter models preferential trade agreement (PTA) formation as a competitive process, demonstrating that the presence of bilateral intra-industry trade informs us as to which states will form PTAs. This follows because (1) firms benefit from larger markets and increased efficiency, potentially gaining relative to firms in states left out of the agreement; (2) intra-industry trade suggests similar productivity, such that firms in member states are less likely to be harmed by preferentially reduced trade barriers; and (3) strategic considerations are lessened as inter-industry specialization decreases.

4Trade Composition and the World Trade Organization: The Effect of Intra-Industry Trade on the Dispute Settlement Procedure chapter abstract

This chapter explores how the composition of trade influences the onset of disputes via the World Trade Organization. This dependent variable is unique in our analyses because the extent of existing trade is the most direct cause of disputes. We contend that higher trade volumes, all else equal, lead to more frequent WTO disputes because more trade suggests more opportunity for such disputes to arise. However, intra-industry trade can mitigate this relationship. The higher the proportion of intra-industry trade, the smaller the dispute-facilitating impact of higher trade volumes. In fact, if a large enough proportion of trade is composed of two-way exchange of similar commodities, then trade loses its dispute-facilitating impact.

5Beyond Liberalization and Development: Intra-Industry Trade and the Onset of Militarized Disputes chapter abstract

This chapter examines two conditions identified in previous work that are thought to promote pacific interstate relations: development, which suggests potential for gains from trade rather than conquest; and trade liberalization, which suggests weakness among interests potentially supporting conflict. The chapter notes that both of these explanations are incomplete, and suggests that a higher proportion of intra-industry trade uniquely promotes the emergence of similar interests and preferences, but not strategic vulnerability, among trade partners. The chapter suggests that mutual development is insufficient to promote peace in the absence of intra-industry trade, while intra-industry trade can promote peace even when levels of liberalization are low.

6The Political Economy of International Affinity: How the Composition of Trade Influences Preference Similarity and Alliance chapter abstract

The absence of militarized conflict is only a minimal indicator of peace. This chapter argues that intra-industry trade promotes the emergence of common interests among trade partners. However, the reverse case does not follow: more friendly states do not necessarily engage in more intra-industry trade, because restrictions on trade in strategic commodities are lower against friendly states. Accordingly, the chapter demonstrates that intra-industry trade is associated with converging foreign policy preference similarity over time, and with the onset and prevalence of alliances between trade partners.

7Conclusion chapter abstract

This chapter summarizes the findings from the previous chapters, and discusses how patterns of intra-industry between the United States and various Asian states could help us to predict potential future relationships in the region.

About the Author

Cameron G. Thies is Professor of Political Science and Director of the School of Politics and Global Studies at Arizona State University. Timothy M. Peterson is an Associate Professor of Political Science at the University of South Carolina.

Reviews

"In this essential book, Thies and Peterson carefully assess the consequences of the growth of intra-industry trade, which now accounts for the majority of total trade flows. Their brilliant analysis compels us to completely reconsider our understanding of international trade and its political effects."—Anna Lanoszka, University of Windsor

"Cameron Thies and Timothy Peterson convincingly make the case that trade remains important for international cooperation and conflict. Their study is the first to do full justice, both theoretically and empirically, to the increasing importance of intra-industry trade. Well-informed, cogently argued, and methodologically sophisticated, their book is bound to guide key debates in International Political Economy and International Relations."—Han Dorussen, University of Essex

"The nature of trade is changing. Cameron Thies and Timothy Peterson provide an admirable demonstration of how an expansion of intra-industry trade can be a powerful force for peace. Social scientists and policy makers will learn a great deal from reading this book."—Solomon W. Polachek, State University of New York at Binghamton

"The political implications of trade have been studied for centuries, and it is rare that a book comes along that is able to shed new light on such a well-covered topic. Thies and Peterson manage to do just that by focusing on the particular consequences of intraindustry trade on the phenomena of cooperation and conflict in world politics....[T]his is a book that balances empirical rigor with accessible arguments suitable for any student of political science or global studies....[T]he research here provides a roadmap for how to improve upon the way we study the complex but not incomprehensible link between trade and political outcomes such as conflict and cooperation."—Mark Crescenzi, International Studies Review

"A key contribution of the book is the recommendation of a new theory that suggests a clear, causal relationship between trade and international cooperation. Although economists have developed models and theories that explain the composition of trade, there has been little or no research on the impact of such composition on global politics....[T]he new findings concerning the composition of trade are worth reading."—Douglas Mugabe, Review of Regional Studies