Trade Policy Preferences Research Articles

Mass Attitudes about International Trade Agreements: Positive Messages and the Trans-Pacific Partnership

Abstract From the understanding that the mass public knows little about the benefits of international trade agreements but nonetheless opposes them with opposition representing a problem for domestic ratification, this research note explores if and what messages about the Trans-Pacific Partnership might increase popular support. The experimental results show that providing more background information alone does not increase support, but adding an economic message about how this agreement could lower prices or a security message about how it would help the United States counter China increases support. The economic message also encourages respondents to write a statement to their Senators urging them to vote for ratification. These positive effects appear even within groups that are more opposed, namely less educated citizens and Republicans. Our results address important questions about the formation of trade policy preferences, showing they can be shifted in directions contrary to one's egocentric interests and partisan predispositions.

Article: Domestic Interest Groups and India’s Trade Policy Preferences in India-EU FTA Negotiations

Article: Domestic Interest Groups and India’s Trade Policy Preferences in India-EU FTA Negotiations

Trading for survival: trade policy as a credible signal, alliance strategy, and public preferences in Taiwan

This article examines the connection between trade policy, alliance strategy, and public preferences. It argues that when a contentious trade agreement is perceived as a credible signal for aligning with a powerful adversary (bandwagoning), it is likely to provoke domestic opposition due to its negative impact on state survival. Conversely, when a contentious trade agreement is seen as a credible signal for counterbalancing an adversary with a non-threatening great power (balancing), it is likely to face less domestic resistance as it enhances state survival. Using a comparative case study design, this article compares two cases in Taiwan: the movement against the Cross-Strait Service Trade Agreement (CSSTA) in 2014 and the backlash against lifting the import ban on US pork containing ractopamine in 2021. In the CSSTA case, the government’s desired trade partner, China, was not sufficiently supported domestically due to public fears of negative security externalities. In the US pork case, the government sent a cue to the public that a trade deal with the US was a credible commitment required to strengthen the bilateral strategic relationship. This message was echoed by people who recognized the positive security externality and the preservation of Taiwan’s sovereignty and political institutions.

Local sourcing embeddedness, manufacturing relocation, and firm attitudes toward the US-China trade war: A survey analysis of China-based MNC subsidiaries

AbstractThis paper examines the attitudes of multinational corporations (MNCs) toward the U.S.-China trade war through an original survey of China-based MNC subsidiaries in the manufacturing industry. Our argument is in two parts. First, firms that have relocated production outside of China or are considering such moves should be less likely to oppose the trade war as they possess outside options that reduce their vulnerability to trade restrictions. Second, firms’ tendency toward production relocation can in turn be explained by their local sourcing dependence, as measured by the level of such dependence and the degree to which their operations require supplier certification. This is because firms more heavily embedded in local supplier networks face stronger resource dependence that increases organizational inertia, reducing their ability to switch to alternative suppliers and therefore relocating production to other destinations. Our findings corroborate our hypotheses, highlighting how the heterogeneity in MNCs’ supply chain relationships may influence both their manufacturing relocation decisions and trade policy preferences.

Who votes for free trade and when? Geopolitics as the source of legislative preferences on free trade agreements

Why do legislators support some free trade agreements but oppose others? Despite a wide variation in legislative support for free trade agreements, the heterogeneous preferences of legislators have received little attention in the literature, which largely focuses on general trade policy preferences of legislators and individual voters. We bring in geopolitical factors as a key source of legislative preferences on specific free trade agreements. Using voting records of the U.S. House representatives on all major bills related to free trade agreements, we find that the geostrategic importance of potential trading partner has a substantial effect on voting for trade agreements. We find that legislators become less sensitive to their constituents’ economic interests when considering trade agreements with allies or countries with closely aligned interests. This highlights the importance of examining security externalities of trade cooperation.

The variation in firm lobbying by political regime: can it explain trade and currency policy differences?

AbstractExploring if/how lobbying patterns differ by political regime, this paper uses data from the World Bank's Enterprise Surveys with about 29,000 firms across 83 country/years to test the hypothesis that this political activity should be greater in democracies. Considering a variety of democracy indicators and different lobbying measures, it finds strong support for this expected positive relationship. It then employs these data to consider the trade and currency policy preferences of firms within the special interest channel, comparing democracies with non-democracies. These results show a greater percentage of exporting firms, a lesser percentage of import-competing firms, and a greater percentage of non-tradable firms within the democratic special interest channel, helping to build a lobbying-based explanation for why democracies tend to have more open trade policies and more flexible exchange rate regimes.

TRADE POLICY PREFERENCES IN TIMES OF UNCERTAINTY: THE CASE OF EXPORTING FIRMS IN URUGUAY

This paper’s main goal is to study those factors that explain the exporting company’s trade policy preference in a global context of uncertainty. Based on a survey carried out with the main Uruguayan exporting companies, the study shows that the higher the firm's export ratio and the more diversified the destinations of its exports, the higher would be its preference for an open trade policy. The study highlights the growing uncertainty of entrepreneurs in complex international contexts such as the current one, leaving the challenge of continuing to delve into the subject.

Trade policy preferences: a case of Thailand

Trade policy preferences: a case of Thailand

Declining hegemony and the sources of Trump’s disengagement from multilateral trade governance: the interaction between domestic politics and the international political economy

As a result of the economic and political rise of China and Trump’s decision to undermine the liberal international order, theories of hegemony have regained center stage in both policy-oriented and scholarly debates. Yet, a careful analysis of the evolution of the US foreign policy strategy in the realm of international trade politics reveals that traditional theories of hegemonic decline are ill-equipped to account for both the timing and the content of the Trump administration’s behavior in this issue area. This paper argues in favor of integrating structural theories of hegemonic transition/stability with an analysis of the domestic sources of trade policy preferences. To do so, we draw on the International Political Economy literature highlighting how the domestic political process triggered by the dynamics of international economic competition combined with structural forces in shaping the timing and content of the Trump administration’s disengagement from the existing multilateral trade governance structures.

Polarized we trade? Intraparty polarization and US trade policy

Research indicates that polarization has led to an increasing dispersion between moderate and more extreme voters within both parties. Intraparty polarization supposedly affects the nature of interparty competition as it creates political space for new political realignments and the rise of anti-establishment candidates. This article examines the extent and impact of intraparty polarization in Congress on US trade policy. Specifically, the article examines whether (and which) trade policy preferences are distributed within and between both parties, as well as how intraparty polarization has influenced the outcome of US trade negotiations. It is theorized that intraparty polarization causes crosscutting legislative coalitions around specific trade policies and political realignments around ideological factions, with consequences for the outcome of trade negotiations. By relying on a unique dataset of congressional letters and co-sponsorship legislation, the article first derives trade policy preferences from members of Congress and computes their ideological means. Two contemporary cases of US trade policy are examined: The Transpacific Partnership Agreement and the US–Mexico–Canada Agreement. Via a structured-focused comparison of both cases, the paper finally assesses under which combinations of preference-based and ideology-based intraparty polarization Congress manages to ratify trade agreements. Findings suggest that both parties are intrinsically polarized between free trade and fair trade preferences yet show variance in their degree of ideology-based intraparty polarization. These findings contribute to existing work on bipartisanship as well as factions in the foreign policy realm, as it shows under which circumstances legislators can build crosscutting coalitions around foreign policies.

Environmental Impacts and Public Opinion About International Trade: Experimental Evidence from Six OECD Countries

Abstract Do environmental implications of international trade influence public support for economic globalization? And under what conditions do environmental considerations shape individuals’ trade attitudes and policy preferences? In this study, we examine the microfoundations of the trade–environment nexus based on survey-embedded experiments in six OECD countries. Our empirical findings demonstrate that environmental implications have a substantial causal effect on public opinion about international trade. Furthermore, our results indicate that citizens are similarly sensitive to both domestic and international environmental implications of trade. These findings suggest that there is probably sufficient public support for green economy policies that take into account the global rather than only national environmental impacts from trade when designing trade policies.

Czechoslovak Tariffs in the 1920s: An Example of Historical Specificity in Economic Policy

Czechoslovakia was the first industrialized economy to substantially increase tariffs after the First World War. At that time, Czechoslovakia was highly export-oriented, with a large trade surplus in industrial goods. We argue that the introduction of tariffs was a consequence of the ethnically heterogeneous structure of the economy. German capital controlled the highly export-oriented light and consumer goods industries; Czech capital dominated in industries that were far less export-oriented or even import-competing, such as machinery, transportation equipment, and electrical goods. Trade and exchange-rate policy preferences of both groups clearly differed; however, the policy decision-making process (at least until 1926) was completely controlled by Czechoslovaks and Czech capital, explicitly committed to a nationalist takeover of Czechoslovakia's economy. This is why it was possible to implement an exchange rate and trade policy that ran contrary to theoretical expectations based on the general (national aggregate) indicators of the national economy.

Misinformation, economic threat and public support for international trade

The recent surge in protectionist sentiment in countries around the world has rekindled the long-standing debate over the determinants of citizens’ trade policy preferences. We examine the influence of two understudied but increasingly relevant factors – misinformation and economic threat – on support for international trade in the United States. We first show that more than 6–in–10 Americans endorse a salient misperception about Chinese currency manipulation despite extensive evidence to the contrary. Then, based on a preregistered survey experiment, we show that misinformation can be corrected, regardless of whether the threatening frame is present or not. In contrast to these results on factual beliefs, however, we find that trade policy preferences are considerably stable: neither anti-trade misinformation nor an economically threatening frame significantly reduces support for international trade. These findings suggest that political elites’ strategy of ‘playing the China card’ by using misleading and threatening rhetoric is not so effective in mobilizing opposition to trade.

How Much is One American Worth? How Competition Affects Trade Preferences

AbstractWhen forming opinions, mass publics may implicitly or explicitly value some people’s well-being more than others. Here we examine how two forms of this phenomenon—ethnocentric valuation and moral exclusion—affect attitudes toward international trade. We hypothesize that attitudes toward competition and believing that trade is a competition moderate the extent of ethnocentric valuation and moral exclusion; although all citizens value their co-nationals’ livelihoods systematically more than those of people in trading partner countries, greater ethnocentric valuation and moral exclusion occur when trade is seen as a competition and when individuals hold more positive attitudes toward competition.Using two survey experiments conducted on representative samples of both Americans and Canadians, we examine how differential valuation of in-country and out-country job gains and losses influences trade policy preferences. We test a series of hypotheses using multiple variables tied to competitive attitudes across two countries that differ in their attitudes toward competition.

Domestic Sources of India’s Trade Policy Preferences in RCEP Negotiations

After negotiating for seven years, fifteen member countries of the Regional Comprehensive Economic Partnership (RCEP) agreement concluded text-based negotiations on 4 November 2019 at a summit held in Bangkok, conveying that participants will sign the agreement in 2020. However, India refused to join the RCEP agreement on the ground that its ‘outstanding and domestic concerns’ remained unresolved. This article examines key factors that shaped India’s decision not to participate in the RCEP. To examine these key factors, two-level game literatures are used to focus on domestic factors and interest groups explaining the role of actors that shaped India’s trade policy preferences regarding the RCEP. Specific cases from the steel and agricultural sector are used to examine powerful sector-specific interest groups in this article. Findings show that powerful and well-organized interest groups within the steel sector successfully pressurized the government to withdraw from the RCEP. In the agricultural sector, interest groups are fragmented, but because of their large number as an electoral group, farmers and workers provided power to influence the government to opt out from the RCEP. RCEP negotiations, free trade agreements, India, WTO, sector-specific groups, domestic lobby, interest groups, and industry associations

Globalization as ideology: China’s effects on organizational advocacy and relations among US trade policy stakeholder groups

While literature on US voter trade policy preferences has an established diversity of theories and methods, academic and popular approaches to US organizational trade policy advocacy are underdeveloped. The dominant methodologies in economics conceptualize stakeholder group policy preferences as a continuum from free trade to protectionism. In contrast, this study builds on literature that assumes that organizations have both economic and ideological motivations. I examine China’s effects on US stakeholder group advocacy and intergroup relations (e.g. multinational business associations, domestic manufacturing groups, and labor unions). I use interviews with organizational leaders and content analysis of documents from US stakeholders in manufacturing and services sectors. I argue that US-China issues reshaped organizational advocacy by expanding and evolving ideological interests. As groups increasingly advocate on the basis of their ideological interests, their discrete economic interests are a shrinking share of the content of trade politics, including traditional protectionism. Rather than simply advocating their microeconomic interests, US stakeholder groups organize around their competing ideologies for the future of US-China integration—free trade, strategic trade, and fair trade. China issues led new organizational agreements and disagreements along those ideological lines, which preceded policy outcomes reflective of the convergences and divergences of their goals.

International Trade Policy Preferences: The Impact of Patriotism and Nationalism Pre- and Post-9/11

This paper provides new evidence supporting the hypothesis that patriotism and nationalism influence personal trade policy preferences in addition to the typical economic determinants. It also examines the interaction of the 9/11 terrorist attacks along with patriotism and nationalism on policy preferences. Using the Heckscher-Ohlin model as a theoretical framework, ordered probit estimations were applied to survey responses from an International Social Survey Program survey question about preferences towards limiting imports. Extensions of the model were sequentially estimated to investigate the impact of national identity on policy preferences. The model was augmented to test how feelings of nationalism and patriotism influenced personal trade policy preferences. Data from the International Social Survey Program surveys administered in 1995/1996 and 2003/2004 also allowed us to reflect on the impact of the 9/11 terrorist attacks on trade preferences in the U.S. We found that prior to the 9/11 attacks, nationalism was associated with increased inclinations towards limiting imports while patriotism had no statistically significant impact on trade preferences. The 9/11 attacks made U.S. survey respondents less open to imports. Further, the 9/11 attacks served to reduce the impact of nationalism on the tendency to limit imports while it enhanced the desire to do so through patriotism.

Trade policy preferences: a case of Thailand

Trade policy implementation is a sensitive issue and can be complicating. Without taking the micro information into account, trade policy administration can be considered as half-blinded. The logit and probit techniques are employed to assess the determinants of people's support for such trade issues as, people's support for trade liberalisation policy, being a member of ASEAN, and taking part in Regional Comprehensive Economic Partnership (RCEP) and other Free Trade Agreements (FTAs). The Bangkok people are likely to be defensive toward the newly enforced policy. The foreign exposure urges liberalisation perspective. The Stolper-Samuelson theory is valid only in the case of ASEAN labour market liberalisation.

Disentangling the relationship between sociotropic and egotropic trade attitudes: A survey experiment in Japan

AbstractPublic 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.

Investment strategy analysis of emission-reduction technology under cost subsidy policy in the carbon trading market

Purpose The authors consider a dynamic emission-reduction technology investment decision-making problem for an emission-dependent dyadic supply chain consists of a manufacturer and a retailer under subsidy policy for carbon emission reduction. The consumers are assumed to prefer to low-carbon products and formulate a supply chain optimal control problem. Design/methodology/approach The authors adopt differential game to analyze investment strategies of cost subsidy coefficient with respect to vertical incentive of a manufacturer and a retailer. A comparison analysis under four different decision-making situations, including decentralized decision-making, centralized decision-making, maximizing social welfare, is obtained. Findings The results show that the economic benefit and environmental pressure have a win–win performance in centralized decision-making. In four different game models, equilibrium strategies, profits and social welfare show changing diversity and have a consistent development trend as time goes on. Research limitations/implications The authors estimate the demand function is a linear function in this paper. According to the consumers’ preference to low-carbon products, consumer’s awareness meets the law of diminishing marginal utility like advertising goodwill accumulation. The carbon-sensitive coefficient might be a quadratic expression, which will complicate the problem and be consistent with reality. Practical implications It captures that there is a necessity to strengthen cooperation and exchange of carbon emission technology among the enterprises by simulation of different decision-makings when government granted cost subsidy. Social implications The results provide significant guidelines for the supply chain to make decision-makings of emission-reduction technology investment and relevant government departments to determine emission subsidies costs. Originality/value An endogenous subsidies coefficient is produced by the social welfare function. Distinguished from previous study, it also considered the influences of carbon emission trade policy and consumer preference.