Domestic Politics, Foreign Interests, and International Trade Policy

Arye Hillman () and Heinrich Ursprung

American Economic Review, 1988, vol. 78, issue 4, 719-45

Abstract: This paper is directed at explaining the political choice of voluntary export restr aints as means of restriction of international trade. Tariffs are com pared with voluntary export restraints in a setting of competition be tween candidates for political office who use trade-policy pronouncem ents as a means of seeking political support from foreign and domesti c producer interests. With tariffs, the candidates take politically d ivisive policy positions. Voluntary export restraints are politically conciliatory and can offer mutual gain to foreign and domestic produ cer interests. The potential for foreign producer gain underlies the voluntariness of voluntary export restraints. It is no candidate's po litical interest to choose a tariff to formulate a trade-policy posit ion if a voluntary export restraint is feasible. Copyright 1988 by American Economic Association.

Date: 1988
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