ABSTRACT
As the general theme of this book suggests, free trade areas have a profound impact on both inter-regional trade and multilateral trade institutions. In this chapter we turn our attention to the 1989 free trade agreement between Canada and the United States (FTA). This agreement is important because it came in response to a perceived lack of progress in multilateral trading institutions and is widely touted as the impetus for future encompassing trade blocs in the Americas. Because free trade agreements shape trade patterns between states, it is important to examine not only the political factors responsible for the initiation of free trade agreements, but also the institutions that structure the ratification process. To explain how democratic states successfully ratify international trade agreements we integrate and extend theoretical insights from scholars that have pondered variations in the policy making process across parliamentary and presidential Democracies (Milner, 1997; Tsebelis, 1995; Weaver and Rockman, 1993; Lijphart, 1992; Steinmo, 1989). Specifically, in this chapter, we focus on the combination of constitutional and electoral structures that shape decision-making authority in Canada and the United States. Both have been used to explain why democratic states choose different public policies. We also find that both are important institutional determinants for explaining whether and when democratic states are able to secure cooperation on international trade liberalization. We illustrate how variations in political institutions across democratic states shape ratification outcomes. Moreover, we argue that scholars must appreciate the preR existing milieu of a state’s trade institutions as a significant factor in
predicting cooperative outcomes. In short, institutions are part of an interactive relationship with the policies that emerge from them. By taking this approach, we are able to demonstrate how ratification was more likely in Canada than in the United States, even though Canada had strong embedded institutional roots in favor of protection in contrast to the United States, which had institutional arrangements favoring trade liberalization.
