New York Times article discusses the probability of Congress passing a new trade deal signed between the U.S. Canada and Mexico. Neither Republicans nor Democrats are happy with the new deal. On the one hand, Democrats consider new deal not protecting worker’s rights and environment. On the other hand, Republicans think that the article is going too far in restricting trade, especially in the auto sector. I believe that the situation above clearly reflects the role of Domestic political institutions when it comes to trade. The new trade agreement between countries was signed while ago. However, when it comes to ratifying. The POTUS is playing the game on both the international and state level. President Trump has to reach an agreement with foreign actors such as Mexico and Canada, and at the same time he has to reach agreement in Congress. As we have learned political institutions play a crucial role when it comes to policy outcomes for the trade. The electoral system and the veto players are a key measuring factor in determining the role of political institutions.
First, the veto players play a key role in determining the future of the trade deals. In divided governments, where there are several different political groups in charge of the government institutions, it is harder to achieve new trade agreements. Currently, as we know in the last elections, Democrats won the house. Thus, the U.S. government is currently divided, making negotiation of the new agreement more difficult than it would have been in unified. Additionally, as we know another key challenge comes from electoral political institutions. In the U.S. the Majoritarian electoral system is used, which means that when a candidate wins a district, he is elected as a representative from that area. This is the complete opposite to proportional system where the candidates are chosen based on the percentage of votes that party received. As election of congress members depend support they receive from home state, they state affiliation. Consequently, members of congress frequently favor policies that are good for their state even if the change is overall bad for the country. This tendency is well shown when it comes to supporting a new trade deal with Mexico and Canada. Even though the new trade deal creates a better position for the entire country, it might not benefit a specific state. Thus, the electoral system of the entire country itself creates an obstacle for the new trade deal to be implemented. Additionally, Heinz & Mansfield go a step further and develop a theory where they identify what would be the trade policy outcome. According to their theory in macroeconomic conditions, society pressures the government to move towards protectionism. The institutions again have a vital role in the determination of the outcome of the policy. Institutions play a significant role as they are a conditional variable in determining the policy outcome. The institutions are further divided into regime types and veto points. The veto points address the players in the country who have the deciding role on whether or not if the policy should be implemented. More players usually make achieving a new policy outcome more difficult. This is precisely the case as Congress is another player in the U.S. government with ability to either accept or deny the agreement. Thus, achieving a new agreement between Mexico and Canada becomes even harder. Achieving a new trade agreement would have been a lot easier if it was only dependent on POTUS. However, the president alone does not decide the policy outcome in democratic regimes. If the U.S had authoritarian regime than trade deal would already have been completed, however as we see due to the regime type additional challenges arise when it comes to completing a new trade deal. Another interesting fact about democratic regime is that elections play an essential role in determining the congress members’ policy goals. As we already mentioned all the congress members want to get reelected. Thus, studies have identified that the congressman’s policy decisions on the trade policy change as their term comes to an end. Studies find that congressman who recently got elected are more likely to support policies that favor free trade compared to the ones who are about to get reelected. As we know society pressures state in macroeconomic positions. Even though this is not entire society and for the entire society new trade deal is good, the congressman will most likely try to maximize his support before the elections and will do everything to maintain the loyalty of his constituents.