Trade agreements are widely perceived as promoting peace. Because of their generally discriminatory nature, however, trade agreements include certain states at the expense of others. We study how citizens’ views on security are shaped by such exclusion. Does the exclusionary behavior of third countries change the public’s perception of the likelihood of conflict between the home and these third countries? Answering this question is important when many foreign policy decisions become increasingly politicized.
We expect that people express greater concern about their home countries’ security relations with a foreign country that excludes them from a trade agreement and anticipate their relations to become more conflictual. Furthermore, we distinguish between two situations: one in which the excluded country only incurs economic costs via trade diversion and one in which the third countries manage to convert the gains from trade into additional military capabilities. We expect the home country’s public to react especially negatively in the latter case. If these expectations are correct, by excluding countries, trade agreements entail significant security externalities.
We test these theoretical expectations with experiments included in surveys fielded to representative samples of citizens in China and the United States. These are ideal cases for our analysis because both countries are important players in international trade and security. They are also major trade partners and rivals competing for global influence.
The preliminary analysis of the data indicates support for our theoretical expectations. Our paper contributes to research on international cooperation and conflict, trade agreements, and public opinion.