Firm Interests: How Governments Shape Business Lobbying on Global Trade
Firms are central to trade policy-making. Some analysts even suggest that they dictate policy on the basis of their material interests. An analysis of the multilateral service trade sheds doubt on these assumptions, in particular when one considers the surprising evolution of support from large firms for liberalization in the United States and Europe. Within less than a decade, former monopolies with important home markets abandoned their earlier calls for subsidies and protectionism and joined competitive multinationals in the demand for global markets. By comparing the complex evolution of firm preferences across sectors and countries, one can see that that firms may influence policy outcomes, but policies and politics in turn influence business demands. This is particularly true in the European Union, where the constraints of multilevel decision-making encourage firms to pay lip service to liberalization if they want to maintain good working relations with supranational officials. In the United States, firms adjust their sectoral demands to fit the government’s agenda. In both contexts, the interaction between government and firm representatives affect not only the strategy, but also the content of business lobbying on global trade.