Any network of international cooperation has some history, and we can trace how it has changed over time. One interesting kind of change is the spread of a network. Some international cooperation spreads, whereas other cooperation does not. This chapter extends the theory of Part III to explain such variations in spread among networks of trade treaties. The main principles of the analysis would extend to cooperation in other issue areas as well.

The key independent variable is the most-favored-nation (MFN) clause discussed in Chapter 10. MFN discourages the spread of cooperation by generalizing concessions even to nonsignatories. Generalizing concessions reduces the gains from cooperation and improves the reversion point, making cooperation by new actors, if they receive MFN, less likely. In contrast, trade regimes lacking MFN encourage the spread of cooperation. Excluded countries typically face trade diversion, lowering their reversion point and thereby making cooperation more likely. These discriminatory regimes provide incentives both for third parties to join the regime and for third parties to cooperate with one another to build an alternative network.

Whether or not they use MFN, this analysis also applies to customs unions and similar preferential trading agreements (PTAs). A customs union has a single tariff against outsiders and free trade within.