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 90 countries between 1995 and 2020. Difference-in-differences estimation with matching 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 politically 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.

At a time when globalization is under increased strain, studies have extensively discussed how governments have rolled back their commitments to international economic integration. Yet, we still know little about instances where the sovereignty costs states derive from institutional membership actually prompt them to cooperate more. We look at the renegotiation of bilateral investment treaties (BITs) in the aftermath of investor-state dispute settlement (ISDS) claims. Existing literature has traditionally framed this as a prominent case of “backlash” against economic globalization, with targeted countries retrenching their commitment to protect foreign investors. Instead, this paper argues that states targeted by ISDS reform BITs in ways that keep these institutions relevant to solving the time inconsistency problem of attracting foreign capital while enacting domestic policies. In particular, states whose claims can credibly harm their reputation as safe investment destinations are more keen on upscaling their BIT commitments to mitigate perceived political risk on the part of investors. Relying on staggered difference-in-differences estimation, we find that states involved in ISDS disputes that simply enforce the rules (direct-expropriation claims) strengthen ISDS provisions in renegotiated treaties compared to states having faced arbitration on dubious claims having low legal merit (like indirect-expropriation claims). Our findings provide new insights into the politics of investment-regime reform. They reveal how state “learning” from BIT membership is not simply informed by sovereignty costs, but is sensitive to the fitness of institutions for realizing the benefits of economic integration.

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.