Taking the Lead on Trade: Legislative Participation, Effectiveness and Strategy in Foreign Trade Policy

TAKING THE LEAD ON TRADE:LEGISLATIVE PARTICIPATION, EFFECTIVENESS AND STRATEGY IN FOREIGN TRADE POLICY Robert Galantucci A dissertation submitted to the faculty of the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Political Science. Chapel Hill 2015 Approved by: Layna Mosley Thomas Oatley Timothy McKeown Justin Gross Jason Roberts c 2015 Robert Galantucci ALL RIGHTS RESERVED ii ABSTRACT ROBERT GALANTUCCI: Taking the Lead on Trade: Legislative Participation, Effectiveness and Strategy in Foreign Trade Policy. (Under the direction of Layna Mosley) This dissertation examines international trade policy in the United States. Each of the four chapters addresses a theoretical or empirical weakness in the existing literature on trade policy, with a particular focus on Congressional behavior. Broadly, the chapters en- gage two key themes. Chapters 1 and 2 consider how changes to key political institutions affected legislative participation and effectiveness in the issue area. Chapters 3 and 4 ex- plore underlying influences on legislators’ positions on trade policy, and identify several overlooked drivers of Congressional behavior. The first two chapters challenge conventional narratives regarding the purported de- cline of Congressional participation and influence in trade policy. Several key institutional changes in the 20th century are often said to have displaced Congress from its consti- tutionally granted role as the branch governing foreign trade policy. Scholarship regularly contends that the “burden” of trade policy would be shifted to the executive branch, and that Congress would be insulated from interest group pressures. Chapter 1 casts doubt on these assessments. Examining over a century of bill sponsorship trends, I show that Congress has not become less active in the issue area, notwithstanding substantial delegation to the presi- dent and the concomitant expansion of the executive branch trade apparatus. My statistical analysis demonstrates that delegation is actually accompanied by greater participation of the legislature. The analysis yields several other noteworthy results; in particular, I identify a number of additional political and economic factors that play a large role in shaping Congressional attention to trade policy. The results from these models are reinforced by a supplemental statistical analysis relying on USTR Congressional consultation data. iii Chapter 2 similarly highlights continuity in legislative trade politics. Legislative re- organization in the 1970s is often identified as the point at which key trade committees “lost control over trade policy.” In this chapter, I demonstrate that the power hierarchy, in many ways, remains intact. Through a quantitative analysis of legislative effectiveness in the post-war period, I find that many of the traditionally powerful players in trade policy retained their clout. These legislators – who, for example, serve on key committees or who enjoy seniority or leadership status within Congress – are far more likely to see their trade policy legislative proposals make it further along in the legislative process. Additionally, beyond standard measures of legislative effectiveness (i.e., bill success), these legislators have also increasingly exerted influence on policy through various oversight mechanisms. Chapters 3 and 4 focus on identifying several often-overlooked influences on legislative behavior on trade policy. The extant literature frequently explores the underlying determi- nants of legislators’ posture on particular policy proposals. This line of scholarship, for example, examines how constituency economic characteristics, campaign contributions and macroeconomic shifts influence elected representatives’ stances on trade policy.1 Chapter 3 identifies another important influence on trade-related behavior: inter-legislator connections. Although legislative behavior is, of course, largely shaped by factors such as constituency interests, the policymaking process takes place in an environment characterized by repeated interaction, reciprocity and a host of other group-based dynamics. Through an ERGM (network) analysis of cosponsorship behavior on trade legislation in several con- gresses, I highlight the ways in which these network effects can influence support for trade policy proposals. Chapter 4 considers another important influence on legislative behavior on trade. In particular, I examine economic interdependence as a driver of trade and exchange rate policy 1Chapter 5 contains an analysis of how these considerations impact legislators’ support for import reg- ulating legislation. The appendix is organized as a research note, and I highlight the potential limitations of trade policy studies that focus extensively on roll call voting. I reexamine many of the most prominent explanations for legislators’ positions in a novel empirical context – namely, by examining (co)sponsorship data. As discussed in the Appendix, I argue that these data are often better indicators of legislative priorities that the data relied upon in the overwhelming majority of existing analyses. iv choice. Here, I focus on the pivotal U.S.-China bilateral relationship. I show that extensive U.S. reliance on the Chinese economy serves to constrain Congressional behavior. Al- though many industries and legislators voice concerns about China’s efforts to artificially reduce the relative value of its currency, legislators recognize the potential implications of taking aggressive action against China. An exchange rate conflict – one that would spill over into trade policy, and possibly investment policy as well – would impose severe costs on both economies. A statistical analysis of legislators’ support for currency realignment bills reveals that such considerations are reflected in Congressional behavior. Legislators whose constituencies rely on the Chinese economy were more likely to oppose currency realignment legislation, while legislators whose constituencies primarily compete with China supported the bills at a higher rate. This dissertation contributes to several bodies of literature. First, this research en- gages with prominent historical treatments of trade policy that consider the implications of changes to key political institutions. Notwithstanding a number of seemingly drastic institutional shifts, I find that there is a great deal of continuity in Congressional participation and prerogatives in the issue area (Chapters 1 and 2). Second, this research helps to identify underlying drivers of trade-related behavior. Factors such as inter-legislator rela- tionships (Chapter 3) and the integrated structure of the global economy (Chapter 4), prove to shape legislators’ positions in meaningful ways. These factors, then, supplement existing explanations for legislative behavior (see the Appendix for a review and reanalysis of this literature). Finally, this dissertation offers a number of empirical advances by relying on novel data sources, and by applying a number of underutilized statistical approaches in the analysis. v ACKNOWLEDGMENTS I have been very fortunate to receive a great deal of feedback on this project over the last several years. Portions of this research were presented at seminars and workshops at UNC - Chapel Hill and Duke University, and many participants offered helpful comments. Members of UNC’s political science faculty have been generous with their time and comments on numerous occasions. I am especially indebted to the members of my dissertation committee. Layna Mosley, Thomas Oatley and Tim McKeown were especially influential in guiding my research, and provided insights related to this projects and several others. My parents have been extremely supportive throughout this process, and – as always – went above and beyond in taking an interest in my academic pursuits. They have offered encouragement at every step of the way. My wife, Ellen, has also contributed to my graduate studies from the very beginning. On my first day of graduate school, I was assigned to share her desk. Now, five years later, we’re still sitting next to each other, and I’m still responsible for most of the mess. vi TABLE OF CONTENTS 1 ACTIVITY OR ABDICATION? PATTERNS OF CONGRESSIONAL PARTICIPATION IN TRADE POLICY . 1 2 STILL FOLLOWING THE LEADERS: INSTITUTIONAL POWER & EFFECTIVENESS IN TRADE POLICYMAKING . 34 3 INTERNATIONAL COMMERCE & INSTITUTIONAL CONNECTIONS: CONGRESSIONAL NETWORKS AND FOREIGN TRADE POLICY. 69 4 THE REPERCUSSIONS OF REALIGNMENT: US-CHINA INTERDEPENDENCE AND EXCHANGE RATE POLITICS . 113 5 A EVALUATING LEGISLATORS TRADE PRIORITIES - CONSIDERING (CO)SPONSORSHIP BEHAVIOR . 151 vii LIST OF TABLES 1.1 Cosponsorships, by party . 15 1.2 Models of Bill Sponsorship . 20 1.3 Models of USTR-Congress Consultations . 24 2.1 Dependent Variables. 41 2.2 Legislative Activity/Outcomes, by Committee . 44 2.3 Legislative Success, by Ways Means Service . 45 2.4 Models of Legislative Effectiveness . 47 2.5 Centrality - Legislation and Enacted Bills . 55 2.6 Trade-Related Activity - Ways Means Chairs vs. Chamber Average . 68 3.1 Bill (Co)sponsorship Summary Statistics. 82 3.2 Logit Models of Cosponsorship . 94 3.3 Network Models of Cosponsorship . 96 3.4 Network Models of Cosponsorship . 97 4.1 Descriptive Statistics and Data Sources . 129 4.2 Currency Reform for Fair Trade Act (111th Congress) . 131 4.3 Currency Exchange Rate Oversight Reform Act (112th Congress). 132 4.4 CRFTA/CERORA

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