COLUMBUS, Ohio -- Trade agreements between countries don't just benefit the members economically -- a new study suggests these pacts make military conflicts less likely.
Research showed that countries that belonged to the same preferential trade arrangements (PTAs) with each other were 30 to 45 percent less likely to become involved in military disputes than were countries that did not share such agreements.
PTAs are sometimes controversial among labor leaders and environmentalists, a major example being the North American Free Trade Agreement (NAFTA). But this research shows a benefit to such pacts that hasn't often been considered, said Edward Mansfield, co-author of the study and associate professor of political science at Ohio State University.
"There's been a lot of debate about whether trade agreements do more economic harm or good for the countries involved and their citizens, but little attention has been paid to their political consequences," Mansfield said.
"Our results suggest that PTAs do have an important political benefit: they reduce the likelihood of open hostilities between member countries."
Members of PTAs have incentive to settle disputes peacefully in order to safeguard the economic benefits they expect to receive from their trading agreements, he explained.
Mansfield conducted the study with Jon Pevehouse and David Bearce, both doctoral students in political science at Ohio State. Their study was published in a recent issue of the journal Security Studies.
The researchers examined PTAs established between 1950 and 1985. They examined well-known PTAs such as NAFTA and the European Union, as well as many that are virtually unknown among the public.
While PTAs can take a lot of different forms, each type grants and safeguards preferential access to the economic markets of the countries involved, Mansfield said. This involves lower trade barriers on members' goods than on those of third parties.
The researchers also examined data from the Correlates of War Project to identify militarized disputes between countries, including threats to use military force, the display or use of force, and wars.
When the researchers compared PTA membership and militarized disputes, they found that PTAs reduced the number of conflicts among member countries by up to 45 percent. And when members of PTAs did have military disputes, they were less likely to lead to war. Results showed that about 11 percent of the militarized disputes between non-PTA members escalated to war, while only 2 percent of the militarized disputes between PTA members escalated to such heights.
Mansfield said the results held up even when the researchers took into account a variety of other factors that could influence the likelihood of hostilities between trade partners. For example, they found that the results held true regardless of whether or not the countries involved were political allies. Results were also similar whether the countries had democratic or non-democratic governments.
In addition, the study showed that simply having a large trade flow with another country was not enough to reduce the chance of hostilities -- there also had to be a formal PTA.
"By itself, the flow of trade has little effect on military conflict," Mansfield said. "The formal agreements that structure trade flows are much more important in this regard."
A key benefit of PTAs is that they give the countries involved reasonable assurances that the gains from trade will extend into the foreseeable future. "Without a formal trade agreement, countries may fear that commercial relations with their key trade partners will deteriorate in the future," he said. "Because PTAs help to sustain economic cooperation among members, and military hostilities are likely to damage these arrangements, PTAs inhibit political conflict among members."
Mansfield said the results of this study show how economics and politics interact in the new global economy.
"Leaders who entered into PTAs are more likely to pull back from the brink in the event of a conflict because they don't want to jeopardize an important economic relationship. The economics and the politics are meshed together."
The research was partially funded by the Mershon Center at Ohio State and the Hoover Institution at Stanford University.
Written by Jeff Grabmeier, 614-292-8457; Grabmeier.1@osu.edu
Journal
Security Studies