International Institutions and Issue Linkage:Building Support for Agricultur... Christina L Davis The American Political Science Review:Feb 2004:98.1:Research Library pg.153 American Political Science Review Vol.98,No.1 February 2004 International Institutions and Issue Linkage:Building Support for Agricultural Trade Liberalization CHRISTINA L.DAVIS Princeton University This article explains how the institutional context of international negotiations influences their out- comes.I argue that issue linkage counteracts domestic obstacles to liberalization by broadening the negotiation stakes.Institutions bolster the credibility of the linkage to make it more effective.I test the argument in the agricultural sector,which has been among the most difficult sectors for governments to liberalize.Statistical analysis of U.S.negotiations with Japan and the EU from 1970 to 1999 indicates that an institutionalized linkage between agricultural and industrial issues encourages agricultural liberalization in both Japan and Europe.Through case studies of key negotiations,I first examine why countries choose to link issues,then show how the linkage changes interest group mobilization and shifts the policy process to promote liberalization. Thy do some international economic negotia negotiation strategy that involves combining multiple tions bring major policy changes while oth issues to change the balance of interests in favor of a ers end in deadlock?The difference between negotiated agreement.Only when the institutional con- success and failure in these negotiations often amounts text supports a linkage strategy,however,will it appear to billions of dollars and the seeds of economic disorder credible.Once established,the institutionalized issue or cooperation.A successful negotiation can establish linkage applies greater pressure for liberalization than rules that open markets and promote coordination of threats or domestic political and financial constraints. policies.For example,the Bretton Woods conference of Moreover,issue linkage can bring liberalization even 1944 established the framework for postwar economic when it would be least expected in sensitive sectors. cooperation that promoted greater interdependence. Using agricultural trade as a hard case that has been Fifty years later,the Uruguay Round Agreement re- a frequent source of trade disputes,I present evidence duced agricultural and industrial trade barriers and ex- that linking negotiations on agriculture and other sec panded trade rules to regulate services and investment tors brings more agricultural liberalization than other On the other hand,failed negotiations often leave both strategies.Historically,agriculture stands out as a sector sides worse off as relations between participants de- where countries stubbornly defend domestic programs. teriorate.One such setback was the World Economic Farm lobbies represent the classic example of an influ- Conference of 1933,which ended without agreement ential pressure group (Olson 1965).Indeed,nearly all and was followed by retaliatory trade protectionism industrialized countries raise the levels of protection and competitive currency devaluations.Failures on a on farming as the sector's size in the economy shrinks smaller scale can also have significant consequences. (Hayami and Anderson 1986).Collective action incen- For example,inability to reach agreement on wheat tives motivate farmers to organize,and both strong support policies in the Tokyo Round led to a subsidy lobbies and electoral rules favoring rural districts guar- war between the United States and Europe during the antee that farmers wield political strength beyond their 1980s that drained their budgets and undercut the sales numbers.As a result,while bound tariffs on industrial of developing country farmers.While the consequences goods have fallen to an average rate of 5%for OECD of a negotiation may be far-reaching,the source of suc- countries,agricultural protection has remained high. cessful negotiation strategies lies in the details of the with bound tariffs averaging 60%(OECD 2002a,22). institutions that shape the negotiation process. Nontariff barriers remained common in the agricultural To explain negotiation outcomes,one must look sector long after they were eliminated for most indus- closer at how the agenda,rules,and procedures of a trial goods.Japan and Europe stand out among those negotiation influence state choices.Power and interests giving the most protection to agriculture. alone fail to account for the variation across negotia- Agricultural protection brings high costs in terms of tions.Strong states sometimes are unable to persuade financial expenditures,lost export opportunities,and weaker states to open their markets,and influential increased trade friction.Agriculture exporters,which lobby groups are not always able to prevent their gov- include the United States and the developing coun- ernment from signing a liberalizing agreement.This tries,demand liberalization because protection closes article focuses on issue linkage,which is a common off valuable markets.A study by the U.S.Department of Agriculture(2001)indicates that elimination of agri- Christina L.Davis is assistant professor of Politics and Interna- cultural protection and support could increase global tional Affairs,Princeton University.Address:Bendheim Hall Princeton University,Princeton,NJ 08544(cldavis@princeton.edu) I thank the following individuals for comments that helped to im OECD producer subsidy estimates for 2001 show that 59%of the prove this article:James Alt,Marc Busch,Cedric Dupont,Judith Goldstein.Shigeo Hirano,Kosuke Imai.Lisa Martin,John Odell value of farm production resued directly from govemen policies in Japan,while the corresponding figure was 35%for the EU-both Robert Paarlberg.Susan Pharr.Anne Sartori,Leonard Schoppa,and above the OECD average of 31%and the U.S.levels of 21%(OECD Steven Vogel. 2002b.160-61). 153 Reproduced with permission of the copyright owner.Further reproduction prohibited without permission.Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. International Institutions and Issue Linkage: Building Support for Agricultur... Christina L Davis The American Political Science Review; Feb 2004; 98, 1; Research Library pg. 153