Protection for Exporters

Protection for Exporters: Power and Discrimination in Transatlantic Trade Relations, 1930–2010

Andreas Dür
Copyright Date: 2010
Edition: 1
Published by: Cornell University Press
Pages: 264
https://www.jstor.org/stable/10.7591/j.ctt7z719
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  • Book Info
    Protection for Exporters
    Book Description:

    The liberalization of transatlantic trade relations since the Great Depression is one of the key developments in the global political economy of the last hundred years. This period has seen the negotiated reduction of both tariffs and nontariff barriers among developed countries, which allowed for the rapid expansion of trade flows, a driving force of economic globalization. In Protection for Exporters, Andreas Dür provides a novel explanation for this phenomenon that stresses the role of societal interests in shaping trade politics. He argues that exporters lobby more in reaction to losses of foreign market access than in pursuit of opportunities, thus providing a rationale for periods of acceleration and slowdown in the pace of liberalization.

    Dür also presents hypotheses about the form in which protection for exporters is provided (preferential or nonpreferential) and the balance of concessions that is exchanged in trade negotiations. Protection for Exporters includes case studies of major developments in international trade relations, such as the passage of the Reciprocal Trade Agreements Act in the 1930s, the creation of the General Agreement on Tariffs and Trade in the 1940s, the Kennedy Round in the 1960s, the debate over Fortress Europe in the 1980s, and U.S.-European competition over access to emerging markets in the early 2000s.

    Dür's rigorous argument and systematic empirical analyses not only explain transatlantic trade relations but also allow for a better understanding of the dynamics of international economic relations.

    eISBN: 978-0-8014-5854-5
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Tables and Figures
    (pp. ix-x)
  4. Preface and Acknowledgments
    (pp. xi-xiv)
  5. List of Abbrevations
    (pp. xv-xviii)
  6. INTRODUCTION
    (pp. 1-14)

    Since the 1930s, transatlantic trade relations have undergone a significant transformation as a series of trade negotiations have dismantled trade barriers that were erected before and during the Great Depression in the early 1930s. Successive trade rounds have reduced tariffs to the point where they are of little relevance in shaping current transatlantic trade flows with respect to most products (see figures I.1 and I.2 for U.S. and European tariff levels over time). In the 1990s and 2000s, international agreements have also imposed restrictions on the use of nontariff barriers.¹ This process of transatlantic trade liberalization is arguably one of...

  7. 1 PROTECTION FOR EXPORTERS
    (pp. 15-49)

    In this chapter, I set out an explanation for trade policy choices that favor exporting interests. My argument starts with the basic insight that under most circumstances, import competitors pushing for the protection of the domestic market dominate over exporters interested in enhanced foreign market access. In this situation, although free trade tends to be the economically most efficient policy, governments have an incentive to impose protectionist policies. I suggest that exporters increase their level of mobilization when facing losses of foreign market access, urging their governments to protect their interests. In particular, preferential trade policies among foreign countries impose...

  8. 2 IMPERIAL PREFERENCE AND THE U.S. REACTION, 1932–1947
    (pp. 50-82)

    On 17 June 1930, President Herbert Hoover signed the Smoot-Hawley Tariff Act, a bill that increased U.S. trade barriers to record levels. Measured as duties collected as percentage of dutiable imports, the average tariff went up to nearly 60 percent as a result of this bill. Only four years later, Congress passed the Reciprocal Trade Agreements Act, in which it allowed the president to engage in trade negotiations with foreign countries that could lead to tariff cuts of up to 50 percent. In this arguably most significant institutional change in the history of U.S. trade policymaking, Congress delegated to the...

  9. 3 DEADLOCK IN TRANSATLANTIC TRADE NEGOTIATIONS, 1948–1957
    (pp. 83-100)

    Most existing accounts of U.S. trade policies have treated the 1950s as a period of trade liberalization. The explanations given for this supposedly liberal decade stress either the position of the United States as a hegemon in the international system or the role of geopolitical interests in determining U.S. trade policies. Some authors classify the United States during that time as a benevolent hegemonic power that supported free trade policies to achieve a variety of goals (Krasner 1976; Keohane 1989, chap. 10). Other studies have seen the objective of U.S. free trade policies as supporting U.S. allies in the conflict...

  10. 4 THE EUROPEAN ECONOMIC COMMUNITY, DISCRIMINATION, AND TRANSATLANTIC TRADE RELATIONS, 1958–1963
    (pp. 101-130)

    Ending a period in which it had pursued largely protectionist trade policies, the United States undertook two major initiatives to obtain lower foreign trade barriers in the late 1950s and early 1960s. First, in 1958 Congress passed the Reciprocal Trade Agreements Act of 1958 that provided the president with increased powers to engage in trade negotiations. The administration used this authority to engage in the Dillon round (1960–62) of GATT negotiations that led to some reciprocal tariff reductions on industrial goods. Second, and even more important, in 1962 Congress passed a major trade bill called the Trade Expansion Act...

  11. 5 THE FIRST ENLARGEMENT OF THE EUROPEAN COMMUNITY AND THE U.S. REACTION
    (pp. 131-158)

    Most existing accounts of transatlantic trade relations in the 1970s are motivated by one of two puzzles: the “mercantilist” orientation of these trade policies as compared to the more liberal policies in the previous decade, or the maintenance of a principally liberal stance in the face of adverse developments. On the one hand, some authors stress that the 1970s were a decade in which the United States and the EC pursued trade policies characterized by sectoral protectionism and mercantilist competition (Bergsten 1971). In the United States, the administration negotiated voluntary export restrictions with foreign countries, such as for steel imports...

  12. 6 THE SINGLE MARKET PROGRAMME AND TRANSATLANTIC TRADE POLICIES IN THE 1980s
    (pp. 159-184)

    Transatlantic trade policies in the 1980s were characterized by an increasing U.S. reliance on offensive trade instruments to open European markets without providing major concessions in return. This aggressive stance, which is often summarized as the pursuit of “fair” rather than free trade policies (Goldstein 1993, 176–80; Nollen and Quinn 1994), was very prominent in the U.S. reaction to the southern enlargement of the EC and the implementation of the single market programme (SMP, also known as EC-92 because it was supposed to be completed in 1992) from the mid-1980s onward. While the United States managed to attain its...

  13. 7 COMPETITION BETWEEN THE EUROPEAN UNION AND THE UNITED STATES FOR MARKETS, 1995–2010
    (pp. 185-210)

    Transatlantic trade relations in the 1990s and early 2000s were characterized by competition over access to the markets of emerging countries. Initially, it was mainly the EU that partly reacted to and partly anticipated U.S. initiatives when concluding preferential trade agreements with a series of countries in Latin America and Africa. At the same time, the U.S. Congress failed to pass trade legislation, making William J. Clinton the first American president since the introduction of fast-track legislation in 1974 who never managed to obtain fast-track authority. Congress finally passed a trade bill in 2002, which was immediately used by the...

  14. CONCLUSION
    (pp. 211-222)

    Despite its objective importance, the process of transatlantic trade liberalization has received only scant scholarly attention. In particular, two major gaps exist in the literature on this subject. On the one hand, most existing research explains either American or European trade policies, while neglecting that for reciprocal trade liberalization to take place, both sides have to agree to trade liberalization. Studies of the trade policies of either side provide interesting insights into trade policymaking but cannot explain negotiated trade policy outcomes. On the other hand, the majority of studies concentrate on specific, temporally very limited developments such as transatlantic bargaining...

  15. References
    (pp. 223-240)
  16. Index
    (pp. 241-246)