Intra-Industry Trade: Cooperation and Conflict in the Global Political Economy (Emerging Frontiers in the Global Economy)

__Intra-Industry Trade__ calls for us to rethink what trade most often looks like and how it shapes global institutions, fostering peace among states. Cameron G. Thies and Timothy M. Peterson argue that our understanding of trade has not kept pace with its changing nature in the 21st century; existing models, rooted in Ricardo's theories, regard trade uniformly as taking place between entities and countries that offer different commodities and operate according to the logic of comparative advantage. Though this type of exchange does take place, intra-industry trade—international trade of the same or similar commodities, in which foreign and domestic brands compete—is increasingly prevalent. The authors argue that our current academic and policymaking focus on the total volume of trade, rather than its composition, is misplaced. Trade composition matters, not just because it gives us a fuller understanding of how trade works, but also because intra-industry trade increases the likelihood of positive institutional relations and cooperation between states. To illustrate their point, the authors examine the effects that intra-industry trade has on Preferential Trade Agreement formation, its tendency to lessen World Trade Organization disputes and militarized conflict, and its ability to pave the way for new and fortified alliances. Our understanding of trade has not kept pace with its changing nature. Existing models, rooted in Ricardo's theories, describe trade between parties that offer different commodities and operate according to the logic of comparative advantage. Though this type of exchange does take place, intra-industry trade - international trade of the same or similar commodities, in which foreign and domestic brands compete - is increasingly prevalent. As a result, Intra-Industry Trade argues that our focus on the total volume of trade, rather its composition, is misplaced. Trade composition matters, not just because it gives us a fuller understanding of how trade works, but also because intra-industry trade increases the likelihood of peaceful relations and cooperation between states. To illustrate this point, the authors examine the effects of intra-industry trade on preferential trade agreements, its tendency to lessen World Trade Organization disputes and militarized conflict, and its ability to pave the way for new and fortified alliances. -- from back cover Contents 8 Preface 10 Part I: Introduction 14 1. Trade Composition and the Global Political Economy 16 2. Conceptualizing and Operationalizing Intra-Industry Trade 37 Part II: Intra-Industry Trade and the Global Political Economy of International Institutions 52 3. Cooperating to Compete: Intra-Industry Trade and the Formation of Preferential Trade Agreements 54 4. Trade Composition and the World Trade Organization: The Effect of Intra-Industry Trade on the Dispute Settlement Procedure 81 Part III: Intra-Industry Trade and the Global Political Economy of Peace and Conflict 108 5. Beyond Liberalization and Development: Intra-Industry Trade and the Onset of Militarized Disputes 110 6. The Political Economy of International Affinity: How the Composition of Trade Influences Preference Similarity and Alliance 135 Part IV: Conclusion 158 7. Conclusion 160 Notes 178 Bibliography 190 Index 202 In 'Intra-Industry Trade', Cameron G. Thies and Timothy M. Peterson call for us to rethink how we define trade and how it shapes global institutions. Arguing that existing models, rooted in Ricardo's theories, have not kept pace with the changing nature of trade, they argue that a greater proportion of intra-industry trade plays a significant role in pacifying security relations and institutionalizing economic relations in the contemporary global system