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Published online by Cambridge University Press: 24 August 2009
With the emergence of “new Protectionism” and the resurrection of international political economy as a legitimate field of international relations, international trade and trade relations have, once again, become the focal points of political science inquiries. Given its varied intellectual attractions, the central theme of international trade remains constant: What are the causes of trade relations? Specifically, what factors determine a flow of commodities from country A to country B? There are basically two major types of answers to this question.
1 Bhagwati, Jagdish (ed.), Import Competition and Response (Chicago: University of Chicago Press, 1982)CrossRefGoogle Scholar; Dornbusch, Rudiger and Frankel, Jefferey A., “Macroeconomics and Protection”, in U.S. Trade Policies in a Changing World Economy, ed. Stern, Robert H. (Cambridge, MA: MIT Press, 1987)Google Scholar; Leamer, Edward, Sources of International Comparative Advantage: Theory and Evidence (Cambridge, MA: MIT Press, 1984)Google Scholar; and Ohlin, Bertil, Interregional and International Trade (Cambridge, MA: Harvard University Press, 1967)Google Scholar.
2 Baldwin, Robert, The Political Economy of U.S. Import Policy (Cambridge, MA: MIT Press, 1985)Google Scholar; Cline, William, Exports of Manufactured From Developing Countries (Washington, DC: Brookings Institution, 1984)Google Scholar; Goldstein, Judith, “The Political Economy of Trade”, American Political Science Review 80 (1986): 161–84CrossRefGoogle Scholar; and Schott, Jeffrey, “US Trade Policy: Implications for US-Korea Relations”, in Economic Relations between the United States and Korea: Conflict or Cooperation, ed. Bayard, Thomas and Young, Soo-Gil (Washington, DC: Institute for International Economics, 1987)Google ScholarPubMed.
3 Clearly, the Pacific Basin NICs (sometimes called the Gang of Four) are the most rapidly developing and the most actively trading economies among developing countries, which have an undeniable strategic importance. For instance, Cline (fn. 2, 1984), p. 9, tells us that, “Among the developing countries, South Korea, Hong Kong, Taiwan, and Singapore showed the most dramatic growth in shares in the market for manufactured imports in industrial countries.” Moreover, as noted by Sneider, Richard, “United States Security Interest”, in The Pacific Basin: New Challenges for the United States, ed. Morley, James (New York: Academy of Political Science, 1986)Google Scholar, “the region is dependent for its security on United States military power…. The United States, in turn, must constantly reinforce the credibility of its commitments and maintain a consistent involvement”.
4 One caveat of the present study is that in the case of Singapore, a considerable amount of its export to the United States is comprised of intermediate and components sent back to parent companies by U.S. subsidiaries operating in Singapore. Due to this particular business practice, the conceptual models developed in the present study may not be suitable in explaining Singapore's import penetration into the United States. Perhaps, alternative models (e.g., product-cycle, trade network model, etc.) may be more applicable model of analysis.
5 Firebaugh, Glenn and Bullock, Bradley P., “Level of Processing of Exports: Estimates for Developing Nations”, International Studies Quarterly 30 (1986): 333–50CrossRefGoogle Scholar.
6 The present analysis utilizes the data available through U.S. Department of Commerce, U.S. General Imports: World Area by Commodity Grouping, FT 155 (Washington, DC: U.S. Government Printing Office, 1967–1985)Google Scholar.
7 The following commodities represent the corresponding levels of processing:
Level 1 — Food, Food product, and Tobacco.
Level 2 — Textile and Leather.
Level 3 — Glass and Nonferrous metals.
Level 4 — Wearing apparel, Footwear, and Steel.
Level 5 — Chemical, Plastic, and Metal products.
Level 6 — Machinery and Electrical Machinery.
8 United Nations, Industrial Statistics Yearbook, vol. 1: General Industrial Statistics (New York: United Nations, 1967–1985)Google Scholar.
9 Okita, Saburo, “Pacific Development and Its Implications for the World Economy”, in The Pacific Basin: New Challenges for the United States, ed. Morley, James (New York: Academy of Political Science, 1986)Google Scholar.
10 World Bank, Korea: Managing the Industrial Transition (Washington, DC: The World Bank, 1988), p. 29Google Scholar.
11 Certainly, there are certain differences among the NICs concerning governmental interventions. Singapore, Korea, and Taiwan have centralized bureaucratic agencies (such as the Trade Development Board for Singapore, and the Economic Planning Board for Korea) responsible for planning and targeting various export sectors, whereas, Hong Kong lacks state involvement in the conventional sense. Further, there are differences and cleavages (harmony/disharmony between competing agencies) among bureaucratic agencies. Although far from being ideal, effective export interventions can be viewed as a function of resources and capacities under government's disposal in promoting export productions.
12 Sneider (fn. 3, 1986), p. 77.
13 Keohane, Robert and Nye, Joseph S., Power and Interdependence: World Politics in Transition (2nd ed.; Boston: Little, Brown and Company, 1989)Google Scholar.
14 As a historical factor, this conceptualization is slanted towards Korea and Taiwan who are close U.S. allies over Singapore and Hong Kong who are former British colonies. But this is an important and perhaps necessary variation in examining the NICs’ import penetration into the U.S. That is, is there a relationship between a higher/lower level of American security interests and a higher/lower level of import penetration. If the statist school is correct, we would expect to find, in the cases of Korea and Taiwan, a connection between a high level of security interest and a high level of import penetration. Conversely, we would expect a lower level of security interest coinciding with a lower level of import penetration for Singapore and Hong Kong.
15 To determine the annual trends, the correlograms were checked to see if the values of autocorrelation coefficients move toward zero at the small or at the large value of the lag. The series which move toward zero at relatively large lag (e.g., annual trends) have been adjusted by taking the first differences. After taking the first differences, the correlograms are plotted on the adjusted series to see if these adjustments have successfully removed the annual trends. See Chatfield, C., The Analysis of Time Series: An Introduction (3rd ed.; London: Chapman and Hall, 1985)Google Scholar, for more detailed description concerning these procedures.
16 The estimates with correct signs are those estimates that correctly predicted the expected directions (either positive or negative) of the causal relationships. The percentages of estimates with the correct signs provide a summary result of “fitness” between the theoretical models and the actual observations.
17 The coefficient estimates of the commodity clusters for each NIC (Singapore, Korea, Hong Kong and Taiwan) are available upon request. They are excluded from the present study because of their vastness.
18 Harris, Niegel, The End of the Third World: Newly Industrializing Countries and the Decline of an Ideology (New York: Penguin Books, 1986)Google Scholar.
19 Ibid., p. 59. Harris notes that Hong Kong has no economic strategy nor long-term plan, no great state investment wielded as instruments of public ambitions.
20 Keohane and Nye (fn. 11, 1989), pp. 11–19, define sensitivity as a degree of responsiveness within a policy framework, and vulnerability as an actor's liability to suffer costs imposed by external events even after policies have been altered.
21 Bergsten, Fred, America in the World Economy: A Strategy for the 1990s (Washington, DC: Institute for International Economics, 1988), p. 1Google Scholar.
22 Cuomo Commission Report by Cuomo Commission on Trade and Competitiveness (New York: Touchstone Book, 1988), p. 17Google Scholar.
23 This could be promoted by assisting the Export-Import Bank of the United States (Eximbank) in financing small and medium-size U.S. manufacturers, who cannot finance sales with their own limited resources, are trying to get into the export game, and need commercial lending to support their deals. (See, Stokes, Bruce, “A Thorny Agenda Facing Eximbank”, National Journal 45 (1988): 2800–2801, for a detailed suggestion.Google Scholar)
24 Bergsten, , America in the World Economy, p. 13Google Scholar; also in Bergsten, Fred, “US International Macro-economic Policy”, in Economic Relations between the United States and Korea: Conflict or Cooperation, ed. Bayard, Thomas and Young, Soo-Gil (Washington, DC: Institute for International Economics, 1988)Google Scholar.