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Public support for protection is typically attributed to economic self-interest. Beyond pocketbook anxieties, a competing approach, however, contends that sociotropic attitudes dictate foreign policy preferences. Researchers, however, have faced difficulty in disentangling sociotropic attitudes from pocketbook concerns in observational studies. This article addresses this problem by utilizing a priming experiment to examine the relationship between socio and egotropic attitudes. In line with the predictions of the sociotropic framework, individuals are less certain about the egotropic effects of trade and sociotropic attitudes are found to influence egotropic perceptions by reducing uncertainty about the pocketbook effects of trade. In contrast, the study fails to find support for the hypothesis that individuals project egotropic concerns onto societal evaluations. The results of the study suggest that future research should pay careful consideration to the relationship between socio and egotropic attitudes when modeling and analyzing trade-policy preferences.
Skepticism on the benefits of free trade and globalization has been on the rise in several Western economies, which poses major challenges to firms in these countries. In this chapter, we first explore the roots and the multiple faces of this backlash. We then discuss what we can learn from existing literature on corporate political activity (CPA) in such a changing context, where anti-globalization sentiment and the threat of trade protectionism have become a political reality. We also present findings from our study on the responses of trade-dependent companies to rising protectionism in the European Union. A key finding is that there is a high level of consensus among EU trade associations that trade protectionism is a threat and, although individual companies have been passive so far, trade associations had a mandate to lobby against it. Finally, we discuss how the engagement of trade-dependent firms may change depending on how the political context evolves by presenting three possible scenarios for the future.
In recent years, the negotiation of various trade agreements, such as the TPP, TTIP and CETA, has been accompanied by a large public backlash. Are we observing a paradigm shift in public perception of world trade or just temporary shifts in public support for the global economic order that oscillate around a more or less steady level? This chapter provides an overview of the major determinants of support for or opposition against PTAs and discusses how much room to maneuver policy makers have in designing such agreements. Furthermore, we discuss what policy makers can do to increase support for such agreements. We thereby focus on framing strategies and provide an analysis of which types of arguments are conducive to increase support for PTAs and how individuals process such information. This allows us to construct different future scenarios for policy makers to better align the negotiation and design of future trade agreements with the demand of their constituencies.
As in other countries, textile and apparel production in Germany is considered a victim of globalization. Domestic production and employment declined dramatically after its postwar peak in the late 1950s. Research has often attributed this trajectory to the trade liberalization policy of the German governments. However, this interpretation is puzzling. German trade policy was not as liberal as is claimed, nor did the industry disappear. This article addresses the issue using statistical evidence as well as archival material. The West German textile and apparel industry was using outward processing strategies comparatively early and was supported in that by German politicians starting in the early 1960s. As a result, the industry moved up the global value chain of textile production.
Two distinct strands of conservative Canadian economic nationalism—associated with the ideas of John Rae and Isaac Buchanan—helped to inform the country's protectionist National Policy of 1879. These strands of nationalism were much less influenced by Listian ideas than was economic nationalist thought in many other countries at this time. This study of their content, intellectual sources and influence contributes empirically and analytically to debates in Canadian political economy and international political economy, while also advancing historical scholarship. The arguments also have some potential contemporary relevance in an age when protectionist economic nationalism is rising in the US and elsewhere.
This article examines the main theorists of economic nationalism (Romanianization) and their ideas promoting protectionism and anti-Semitism in 1930s–1940s Romania. Trying to offer a rational scientific justification for excluding foreigners, especially Jews, and increasing the role of ethnic Romanians in the economy, major scholars of economics offered solutions toward successful Romanianization. Because some of these economists were also influential politicians and public intellectuals, their investigations and blueprints for the project gained wide publicity and provided steps for achieving it rapidly and thoroughly. These economists disseminated their theoretical and empirical constructions of Romanianization in university courses, public lectures, and publications. Some were important scholars; among them, Virgil Madgearu, Mihail Manoilescu, Gheorghe N. Leon, Ion Răducanu, and D. R. Ioaniţescu, They examined Romanianization of the economy from the 1930s to the 1940s and influenced the agenda of local elites and the general public, due to their prestigious positions as politicians, public intellectuals, and professors at local universities.
This article examines the influence of subnational economic interests on the formation of supranational trade policy in the Southern Common Market (Mercosur). Accounting for differences in the relative importance of member countries, the article argues that subnational economic interests influenced the structure of Mercosur’s common external tariff (CET). Although the CET was negotiated without direct input from voters or legislators, its structure reflects the interests of geographically specific economic interests in the member countries. The results of a regression analysis of tariffs toward nonmembers indicate that the economic composition of subnational political jurisdictions shaped the structure of the CET. These findings suggest that by overlooking subnational economic interests, much of the current literature on the evolution of Mercosur misses a critical aspect of the policymaking process.
By concentrating a stimulus on the domestic economy, Buy National clauses are argued to lead to higher fiscal multipliers. We show that this argument falls short. Although it is true that domestic demand for domestic goods is increased, at the same time foreign demand for domestic goods is reduced by adverse changes in the real exchange rate. The two effects are of similar magnitude, so that Buy National clauses do not lead to a stronger stimulus to GDP. Apart from that, restricting the stimulus to domestic products makes the stimulus more expensive, because cheap foreign products are ignored. Consequently, real public consumption is lowered by Buy National clauses.
In both the EU and the WTO there are currently pending cases on the legality of EU Regulation 1007/2009 on trade in seal products and its Implementing Regulation 737/2010. While seals seem to be very attractive to the public so that raising arguments against these EU measures are not popular, the Regulations do raise concerns about competences, subsidiarity and proportionality which are relevant for compliance with EU primary law. They also raise concerns about possible protectionism, the use of public morals, coherence and necessity with regard to compatibility with WTO law. This paper seeks to examine all these issues.
This paper studies the role played by different trade barriers (transport costs, customs and currency) in the evolution of Spanish imports during the First Globalization (1870-1913). Through the estimation of several gravity equations with panel data analysis, we obtain the elasticities of imports to each barrier, which allows us to combine them into a single ad valorem measure of barriers to trade (which we call the trade costs tariff equivalent). More interestingly, the contribution of the barriers to the profile of the tariff equivalent, as well as the assignment of an active role to the peseta exchange rate as a barrier, illustrates the existence of a protectionist backlash against the sustained decline in transport costs in the period 1870-1913.
We explore in this article an institutional foundation of agricultural protectionism in Japan, a country long recognized as resisting international pressures to open up its rice market. Using our qualitative analysis of postwar politics of agricultural protectionism and a simple formal model, we argue that farmers in Japan have stronger incentives to mobilize electoral support for the governing party in multimember district systems than in single-member district systems, because the marginal effects of mobilization on policy benefits are different under these electoral systems. Our empirical findings corroborate this claim and provide implications for the gradual changes in Japan's farm policies occurring after the electoral reform in 1994.
Real exchange rate movements are robustly related to the rise and fall of trade protectionism. I demonstrate this by presenting a theoretical model that incorporates the real exchange rate into a standard factor proportions model of trade policy preferences. The model demonstrates why some firms' trade policy preferences, and thus total demands for protectionism, change in response to real exchange rate movements. I evaluate the model with data on antidumping investigations in six industrialized countries between the late 1970s and 2004. The exercise suggests that the real exchange rate hypothesis offers a more compelling explanation for protectionist waves than the business cycle hypothesis.
Drawing upon a comprehensive database of contemporary protectionism, this paper offers an initial assessment of the extent to which our understanding of protectionism may have to evolve. While some long-standing features of protectionism appear to have endured (such as the distribution of discriminatory measures across economic sectors), specific corporate needs arising from the global financial crisis and particular national attributes are more likely to have influenced the choice of beggar-thy-neighbor policy instruments than binding trade rules and other international accords.
Trade coverage ratios were calculated to assess the 1989 incidence of non-tariff measures (NTMs) on imports of agricultural products by major industrial nations. Overall, 36 percent of all food items were found to be covered by one or more NTM in the European Community. Corresponding figures for Japan and the United States were 59 and 17 percent, respectively. Imports of agricultural products confront a wide variety of NTMs in markets of industrial nations. Results of the analysis were used to shed light on prospects for reaching agreements on agricultural reform issues in the Uruguay Round of multilateral trade negotiations.
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