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Intra-Industry Trade: Cooperation and Conflict in the Global Political Economy

Online ISBN:
9780804797207
Print ISBN:
9780804791335
Publisher:
Stanford University Press
Book

Intra-Industry Trade: Cooperation and Conflict in the Global Political Economy

Cameron Thies,
Cameron Thies
School of Politics and Global Studies
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Timothy M. Peterson
Timothy M. Peterson
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Published online:
19 May 2016
Published in print:
28 October 2015
Online ISBN:
9780804797207
Print ISBN:
9780804791335
Publisher:
Stanford University Press

Abstract

This book calls for us to rethink what trade most often looks like and how it shapes global institutions, fostering peace among states. It argues that our understanding of trade has not kept pace with its changing nature in the twenty-first 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 book argues 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 demonstrate that intra-industry trade promotes preferential trade agreement formation, reduces World Trade Organization disputes and militarized conflict, and paves the way for new and fortified alliances.

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