The political effects of trade with Japan in the 1980s

Abstract

AbstractThe 1974 trade act substantially increased the executive branch's authority in trade negotiations through the granting of fast‐track and Section 301 authority. This paper evaluates the effect on U.S. voting behavior resulting from trade with Japan over 1976–1992 time period. To capture U.S. trade exposures to Japan, we develop the Bartik index from Autor et al. (2013) for import competition with Japan and show that local exposure to import competition had statistically significant negative impacts on Republican presidential candidates over the 1976–1984 period. Although the second Reagan administration used Section 301 to open Japan's markets and Japanese firms shifted production to the United States, job‐creation effects of exports and foreign direct investment did not have any influence on voting outcomes.