International agreements are known to elicit cooperation based on their stringency, clarity, and enforceability. Yet, it is puzzling that states regularly enter binding and far-reaching agreements whose implications they know little about. Twenty-first century trade faces a major obstacle in non-tariff measures (NTMs), like national product standards, which slow down the flow of goods and raise consumer prices. Still, institutional commitments to dismantling regulatory barriers remain vague, both at the WTO and in preferential trade agreements (PTAs). This paper asks: what allows states to cooperate in the absence of strong and clear rules? I introduce the notion of deferred contracting (DC) to theorize how states can cooperate and make concessions on costly regulatory commitments after treaty ratification so as to avoid domestic vetoes. I argue that a more institutionalized pursuit of DC leads PTA members to converge more in their national product regulations. I introduce a novel dynamic measure of regulatory distance in product standardization built using principal component analysis (PCA), and covering 118 countries between 1995 and 2020. Difference-in-differences estimation reveals that bilateral PTAs with more institutionalized DC fora reduce regulatory distance between members states more than other agreements. Relying on a mixed-method approach, I complement my statistical findings with a case study on the EU-Japan Economic Partnership Agreement (EPA). Existing literature has long established that institutionalized cooperation revolves around visible commitments formalized during highly scrutinized and contested negotiations. This study reveals that, in fact, the politics of treaty implementation is no less fruitful in producing new policy decisions in the shadow of vague and incomplete contracts.

To mitigate uncertainty, it is often assumed that governments negotiate ample flexibility provisions when entering new international treaties. Yet, the case of preferential trade agreements (PTAs) suggests that governments prioritize more stringent commitments when faced with uncertainty. In this paper, we investigate the effects of uncertainty spikes occurring during negotiations on the design of 251 bilateral PTAs. Our theory proposes that sharp increases in uncertainty make governments more prone to signing deeper PTAs to showcase their commitment to liberalization. In doing so, governments cater to firms’ demands for institutions protecting investment, upholding intellectual property rights, and promoting regulatory harmonization. We find robust evidence that PTAs are deeper when the contracting parties are faced with uncertainty spikes during negotiations. However, we do not find equally consistent evidence that countries also make PTAs more flexible. While much of the rational-design literature has focused on flexibility as a tool to cope with uncertainty, our findings suggest that countries rather tend to tighten their international commitments in turbulent times.

With the global network of bilateral investment treaties (BITs) having expanded since the 1990s, governments have increasingly been exposed to ISDS claims, often incurring costly financial reparations. In response, governments can renegotiate BITs to strengthen their policy space by lowering foreign-investor protection. In studying similar learning dynamics, existing literature has assumed that ISDS “tout court” interferes with national policy interests. Yet, we still know little about whether different ISDS claims affect the treaty-design preferences of governments any differently. We argue that defendant states that renegotiate their BITs retrench investor protection in ways that respond to the specific nature of the claims they have experienced. A targeted reform of investor rights keeps institutions relevant to solving the time inconsistency problem of attracting foreign capital while pursuing domestic policy goals. Relying on staggered difference-in-differences estimation, we find that defendants in cost-efficient cases that simply enforce the rules (direct-expropriation claims) reduce investor protection less than states having faced arbitration on dubious claims having low legal merit (for the most part, indirect-expropriation claims). Lending support to the idea of targeted reform, this effect is significant on ISDS clauses but not on aggregate levels of investor protection in a treaty. Our findings provide new insights into the politics of the international investment regime. They reveal how state “learning” from ISDS is not indiscriminate. It is, in fact, sensitive to arbitration's fitness for keeping investor-state relations in equilibrium.

Why does the EU still lack integration around a common and binding investment screening mechanism (ISM) despite rising global tensions and security concerns? Why is there still significant variation in how EU Member States govern incoming international investment? The literature identifies a political tradeoff for EU governments between attracting FDI and fostering domestic security, shaped by factors like public debt levels, the intensity of R&D in national industries, and the extent of incoming Chinese investment. Yet, we still know little about the role that international institutions play in these government decisions. This paper explores the dense network of bilateral investment treaties (BITs) that individually tie many EU member states to non-EU countries. It argues that being part of BITs with non-EU countries reduces Member States' propensity to introduce ambitious investment screening rules. It finds that a wider network of BITs leads EU Member States to design less comprehensive and stringent ISMs, all else equal. These findings point at an understudied paradox: international institutions like BITs have been designed to foster EU member states’ integration with non-EU economies. At the same time, these agreements limit internal EU integration around a common and binding investment-screening regime. The paper complements explanations for the EU’s lack of a unified ISM that only look at its lagging security integration, pointing at the role of competing economic institutions instead.