Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-10T09:01:49.617Z Has data issue: false hasContentIssue false
  • English
  • Français

Ideas, institutions, and American trade policy

Published online by Cambridge University Press:  22 May 2009

Judith Goldstein
Get access

Extract

Nowhere is America's hegemonic decline more evident than in changing trade patterns. The United States trade balance, a measure of the international demand for American goods, is suffering historic deficits. Lowered demand for American goods has led to the under-utilization of both labor and capital in a growing number of traditionally competitive American industries. Conversely, Americans' taste for foreign goods has never been so great. Japanese cars, European steel, Third World textiles, to name a few, are as well produced as their American counterparts and arrive on the U.S. market at a lower cost.

Type
Research Article
Information
International Organization , Volume 42 , Issue 1 , Winter 1988 , pp. 179 - 217
Copyright
Copyright © The IO Foundation 1988

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1. Earlier versions of this article were presented at the annual meeting of the American Political Science Association, New Orleans, 29 August–1 September, 1985, and the Conference on the Political Economy of Trade Policy sponsored by the National Bureau of Economic Research, January 1986. I would like to thank Beverly Crawford, James Conrad, Jeff Frieden, Stephan Haggard, David Lake, William Lowry, Joanne Gowa, Cynthia Hody, G. John Ikenberry, Michael Mastanduno, and four anonymous reviewers for their excellent comments and assistance.

2 Schattschneider, E. E., Politics, Pressures and the Tariff (New York: Prentice-Hall, 1935)Google Scholar.

3 See, for example: Baldwin, Robert, “The Political Economy of Postwar U.S. Trade Policy,” Bulletin, 1976–4. (New York: N.Y.U. Graduate School of Business, 1976)Google Scholar; The Political Economy of U.S. Import Policy (Cambridge: MIT Press, 1985)Google Scholar; “The Inefficacy of Trade Policy,” Essays in International Finance 150 (12 1982), pp. 1–26Google Scholar. See also Bauer, Raymond, Pool, Ithiel DeSola, and Dexter, Lewis Anthony, American Business and Public Policy: The Politics of Foreign Trade (Chicago: Aldine, 1983)Google Scholar; and Pincus, J., “Pressure Groups and the Pattern of Tariffs,” Journal of Political Economy 83 (08 1975), pp. 757–78CrossRefGoogle Scholar.

4. Keohane, Robert O. and Nye, Joseph, Power and Interdependence (Boston: Little, Brown, 1977)Google Scholar; Keohane, , “The Theory of Hegemonic Stability and Changes in International Economic Regimes, 1967–1977,” in Holsti, Oli, Siverson, Randolph M., and George, Alexander L., Change in the International System (Boulder: Westview, 1980)Google Scholar; and Krasner, Stephen, ‘State Power and the Structure of International Trade,” World Politics 28 (04 1976), pp. 317–47CrossRefGoogle Scholar .

5. For an interesting argument on the force of legal constraints in trade policy, see Wolff, Alan, “The Role of America's Trade Policy in the International Competiveness of American Industry,” Harvard Business School, 1984Google Scholar.

6. See March, James and Olsen, Johan, “The New Institutionalism: Organizational Factors in Political Life,” American Political Science Review 78 (09 1984), pp. 734–50CrossRefGoogle Scholar, for an overview of the institutional perspective.

7. There is a vast and growing literature on the role of ideas, cognitions, values, norms, and ideologies in the political process. In this essay, ideas refer to shared intellectual outlooks. In particular, the shared outlook is the efficacy of government pursuing one economic policy rather than another. In this essay, I do not address questions of why one set of ideas dominates the process by which society transmits particular outlooks or the cognitive process associated with having a particular outlook. Following closely on the way that John Odell uses ideas as a variable in U.S. International Monetary Policy: Markets, Power, and Ideas as Sources of Change (Princeton, N.J.: Princeton University Press, 1982)Google Scholar, the emphasis of the essay is on the political influence of the content of an idea, not the cognitive processes. It is assumed that ideas reflect more than the translation of international needs into domestic policy. Rather, we assume that there are competing interpretations of optimal economic policy for a given environment and the ascendance of one policy idea, rather than another, has important policy ramifications.

This way of viewing ideas and, on a macro level, ideology is similar to that used in a variety of subfields within political science. For instance, Philip Converse defines belief systems as “a configuration of ideas and attitudes in which the elements are bound together by some form of constraint or functional interdependence.” (Converse, “The Nature of Belief Systems in Mass Publics” in Apter, David, Ideology and Discontent (New York: Free Press, 1964), p. 207Google Scholar. Looking at organizations, Franz Schumann suggests that organizations can be characterized by “a manner of thinking” and concludes that there are ideologies of organization in addition to those of classes and individuals. An organizational ideology is defined as “a systematic set of ideas with action consequences serving the purpose of creating and using organization.” Ideology and Organization in Communist China (Berkeley: University of California Press, 1966), p. 18Google Scholar. As defined by Douglass North, “Ideologies are intellectual efforts to rationalize the behavioral patterns of individuals and groups.” Structure and Change in Economic History (New York: W. W. Norton, 1981), p. 48Google Scholar. These scholars agree on a definition of ideas or ideology; variations exist on the explanatory value and independence of ideas. A number of other social scientists, in addition to those mentioned above, look to “ideas” as explanation for policy. See, for instance, King, Anthony, “Ideas, Institutions and the Policies of Governments: A Comparative Analysis,” British Journal of Political Science 2 (07 1973)Google Scholar; and Hartz, Louis, The Liberal Tradition in America (New York: Harcourt, 1955)Google Scholar.

8. Within government, a number of mechanisms reinforced the policy dominance of free trade ideas. For example, in the mid–1970s, members of the House Ways and Means Committee had to pass a “free trade” test to be recruited onto the committee. Throughout the postwar period, economists have been united in support for free trade, influencing economic options presented to central decision-makers. In a third example, shared perceptions by a cohort of government officials about the causes of the Depression continue to influence policy.

9. Nordlinger, E., On the Autonomy of the Democratic State (Cambridge: Harvard University Press, 1981)Google Scholar. Skocpol, Theda, States and Social Revolutions (Cambridge: Cambridge University Press, 1979)CrossRefGoogle Scholar. Tilly, Charles, ed., The Formation of National States in Western Europe (Princeton, N.J.: Princeton University Press, 1975)Google Scholar.

10. Krasner, Stephen, “Approaches to the State: Alternative Conceptions and Historical Dynamics,” Comparative Politics 16 (01 1984)CrossRefGoogle Scholar.

11. Waltz, Kenneth, Theory of International Politics (Reading, Mass: Addison-Wesley, 1979)Google Scholar.

12. Katzenstein, Peter J., “Introduction: Domestic and International Forces and Strategies of Foreign Economic Policy,” International Organization 31 (Autumn 1977), pp. 587–607CrossRefGoogle Scholar.

13. Lakatos, Imre, “Falsification and the Methodology of Scientific Research Programs,” in Lakatos, and Musgrave, Alan, eds., Criticism and the Growth of Knowledge (Cambridge: Cambridge University Press, 1970)CrossRefGoogle Scholar; Keohane, Robert, “Theory of World Politics: Structural Realism and Beyond,” in Finger, Ada W., ed., Political Science: The State of the Discipline. (Washington, D.C.: APSA, 1983)Google Scholar.

14. See Blank, Stephen, “Britain: The Politics of Foreign Economic Policy, the Domestic Economy and the Problem of Pluralist Stagnation,” International Organization 31 (Autumn 1977), pp. 673–721CrossRefGoogle Scholar for a similar explanation of British monetary policy.

15. A number of good accounts of the liberalization process have been written. See, for example: Pastor, Robert, Congress and the Politics of U.S. Foreign Economic Policy: 1929–1976 (Berkeley: University of California Press, 1980)Google Scholar; and Preeg, Ernest, Trades and Diplomats: An Analyses of the Kennedy Round Negotiations under the General Agreement on Tariff and Trade (Washington, D.C.: Brookings Institution, 1973)Google Scholar.

16. Ris, William, “Escape Clause Relief Under the Trade Act of 1974: New Standards, Same Results,” Columbia Journal of Transnational Law 16 (1977), p. 299Google Scholar.

17. Ibid., p. 300.

18. Substantial cause was defined as one “which is important and not less than any other cause.”

19. Metzger, Stanley, “The Trade Expansion Act of 1962,” Columbia Law Review 61 (Spring 1961), p. 444Google Scholar.

20. Ibid., p. 445.

21. Ris, , “Escape Clause Relief,” p. 306Google Scholar.

22. Ibid., p. 307.

23. Ibid., p. 309.

24. For an analysis of executive-congressional relations, see Pastor, Congress and Politics.

25. Goldstein, Judith, “The Political Economy of Trade: The Institutions of Protection,” American Political Science Review 80 (03 1986), pp. 161–84CrossRefGoogle Scholar.

26. The data that appear in Table 2, 4, and 6 were modeled from the same data set. That data set included all industries that applied for any of these three aid types between 1958 and 1983. Petitions were disaggregated by 8-digit product categories and then reorganized into 4-digit Standard Industrial Classification (SIC) codes. This method allows petitions covering large product groups to be appropriately weighted. The estimations to the model were produced using a weighted least square method. For computation of weights, see Goldstein, Judith, “A Re-examination of American Trade Policy: An Inquiry into the Causes of Protectionism,” Ph.D. diss., UCLA, 1983Google Scholar; and Zeller, A. and Lee, T. H., “Joint Estimation of Relationships Involving Discrete Random Variables,” Econometrica 33 (04 1965)Google Scholar. In total, 313 industries (4-digit) petitioned for at least one of these aid types.

In modeling an explanation for government response, industry variables were organized into the following analytic groups: (1) indicators of international competitiveness; (2) measures of import penetration or export strength; (3) indicators of relative industrial size; (4) measures of relative industrial strength; (5) a measure of previous petition success; (6) measures of change in industry characteristics (whether or not due to imports); (7) for a subgroup, the country that would be affected if a positive ruling were made.

27. The Pearson correlation between average employment (1963–77) and petition activity is.69(P =.00). The correlation between employment and petitioning as an industry (not through an association) is.45 (P =.00).

28. For analysis of pre-1934 tariffs, see Taussig, G. W., The Tariff History of the United States (New York: Knickerbocker, 1914)Google Scholar; and International Trade (New York: Augustus Kelley, 1966)Google Scholar; Terril, Tom E., The Tariff, Politics and American Foreign Policy, 1874–1901 (Westport, Conn.: Greenwood, 1973)Google Scholar; Lake, David, Structure and Strategy: The International Sources of American Trade Policy, 1887–1939, Ph.D. diss., Cornell University, 1984Google Scholar.

29. See Davis, Frederick, “The Regulation and Control of Foreign Trade,” Columbia Law Review 66 (12 1966), pp. 1428–59CrossRefGoogle Scholar; and Baier, Lowell E., “Substantive Interpretations under the Antidumping Act and the Foreign Trade Policy of the United States,” Stanford Law Review 17 (03 1965), pp. 428–46CrossRefGoogle Scholar. Since antidumping laws are aimed at international price discrimination, they have a domestic analogue in the Robinson-Patman Act.

30. Finger, J. M., Hall, H. Keith, and Nelson, Douglass R., “The Political Economy of Administered Protection,” American Economic Review 72 (06 1982), pp. 452–66Google Scholar.

31. This additional criterion was instituted in 1954.

32. This ITC practice is cited by Davis, , “Regulation and Control of Foreign Trade,” p. 1442Google Scholar; and Baier, , “Substantive Interpretations,” p. 418Google Scholar. The most frequently noted example is the case of 1964 Vital Wheat Glut in Canada.

33. Marks, Matthew, “Recent Changes in American Law on Regulatory Trade Measures,” The World Economy 2 (02 1980), p. 434CrossRefGoogle Scholar.

34. David, , “Regulation and Control,” p. 1445Google Scholar .

35. Taussig, , International Trade, p. 403Google Scholar.

36. Ibid., p. 443.

37. The United States opposed the inclusion of an injury criteria for both countervailing duty and antidumping cases under the “grandfather clause,” which exempted legislation in effect prior to the General Agreements signing in October 1947.

38. Marks, “Recent Changes,” pp. 430–34.

39. See prepared statement of Carlisle, Charles to the U.S. Senate Committee on Finance Hearings on 1979 Act, 10 07 1979, pp. 489–96Google Scholar.

40. For basis of statutory language, see Bronze, George, “The Tariff Commission as a Regulatory Agency,” Columbia Law Review 61 (Spring 1961), p. 483Google Scholar.

41. For the growth of executive power and foreign policy, see Lowi, Theodore, The Personal President: Power Invested, Power Unfilled (Ithaca, N.Y.: Cornell University Press, 1985)Google Scholar; and Schuman, Franz, The Logic of World Power (New York: Pantheon, 1974)Google Scholar.

42. Alternatively, the data may be picking up the effects of the trigger price mechanism. The president controlled steel dumping duties in the late 1970s by convincing petitioners to voluntarily pull back their petitions. Since it is coded as a petition that did not receive aid, the model could be picking up this dynamic.

43. For a similar argument, see Maier, Charles, “The Politics of Productivity: Foundations of American International Economic Policy after World War II,” International Organization 31 (Autumn 1977)CrossRefGoogle Scholar.

44. Mitchell, Daniel, Labor Issues of American International Trade and Investment (Baltimore: Johns Hopkins University Press. 1976), p. 33Google Scholar.

45. Ibid., p. 43.

46. This adjustment assistance language was modeled on that used for the escape clause, which required imports after 1974 to be a “substantial cause” of injury. The main difference was that, in adjustment assistance cases, imports could be a less important “cause.”