The politics of trade preferences : business lobbying on service trade in the United States and the European Union.

Summary The literature on international liberalization policy generally assumes that firms that are dominant in their domestic markets oppose opening up to foreign competitors. This should be particularly true for network service markets, which have traditionally been run by monopolies, often state-owned. But do dominant firms really oppose the liberalization of their domestic markets? This thesis examines the lobbying of dominant firms against the international liberalization of their sectors in the field of telecommunications and air transport services, focusing on two countries, the United States and the European Union. We show that these firms have in fact expressed support for liberalization, with the exception of U.S. airlines. In order to understand this support, we ask about the weight of four variables that may determine policy preferences: (1) economic incentives, (2) domestic regulatory traditions, (3) the international regime that governs the sector, and (4) the political process in which firms participate. We find that economic incentives play an important role, but we also highlight the effects of the political process on preference formation. In particular, we show that the EU's multi-tiered system encourages lobbying for liberalization while the U.S. process allows for more variable political demands.