Constituent Interests and U.S. Trade Policies

1. Introduction

CHAPTER 1 Introduction Alan V. Deardorff and Robert M. Stern This volume contains the papers and comments that were commissioned for "Representation of Constituent Interests in the Design and Implementation of U.S. Trade Policies: The Sweetland Conference," a conference held in Ann Arbor on November 8-9, 1996. This conference served a dual purpose. First, it helped us to sharpen the focus of an ongoing project of research and policy outreach on issues of the political economy of U.S. international trade policies, in connection with a grant from the Ford Foundation. At the same time and more important, it allowed us to honor John Sweetland and his late wife, Gayle, for the generous gift commitments that they have made to the Michigan Department of Economics. These include an endowed chair in international economics and three additional endowed chairs and related financial assistance for graduate and undergraduate students. The conference authors and discussants were drawn from academic institutions , the private sector, and the Ways and Means Committee of the U.S. House of Representatives. In setting forth the aims of the conference, those involved were asked in particular to address: (1) the objectives of trade policy sought by the various interest groups who were the subject of their paper or comments; (2) how each group's interests are identified and promoted and what means are used for these purposes; (3) the extent to which the objectives and behavior of each group conform to how the political economy of trade policy is treated in the economics and political science literatures; and (4) how effective each group has been in achieving its objectives. To assist participants who were not conversant with the literature on the political economy of trade policy, we provided them with the introductory and concluding chapters of the 1996 book edited by Anne O. Krueger, The Political Economy of American Trade Policy, as well as a chapter on the "Political Economy of Trade Policy," by Dani Rodrik that was published in 1995 in Volume III of the Handbook of International Economics. While these chapters were aimed especially at an academic audience, they nonetheless provided an indication to the nonacademic participants of many of the important aspects and limitations of the manner in which the political economy of trade policy has been modeled theo- 10 Constituent Interests and u.s. Trade Policies retically and empirically. These chapters also contained many useful bibliographic references. The individual conference papers were revised following the conference to take into account the comments of the discussants as well as points raised during the floor discussion. It was decided to include the discussants' comments as they were originally prepared based on the conference versions of the papers, in order to capture the concerns and criticisms raised by discussants in the conference sessions. We trust that readers will find the comments interesting and informative in their own right and useful supplements to the individual papers. To assist the reader in determining which chapters may be of greatest interest , we provide brief summaries in Section I that follows. Then, in Section II, we reflect on what we have learned from the papers and commentaries about how constituent groups may influence the design and implementation of U.S. trade policies. I. Structure and Overview of the Volume The keynote speech delivered by John W. Sweetland in the evening of the first day of the conference has been reproduced above. In this speech, Mr. Sweetland talked about his undergraduate and graduate experiences at the University of Michigan and the personal considerations that he had in mind in designating the endowed chairs to be established in international economics, industrial organization , macroeconomics, and one additional field to be determined. He also spoke at length about the importance of the public university in U.S. society . Following this introductory chapter, Chapter 2 by Alan V. Deardorff and Robert M. Stern provides an overview of the modeling of the choices and consequences of U.S. trade policies. Deardorff and Stern review the normative and political economy approaches to the modeling of trade policies and identify the major limitations of these approaches. They then discuss the transaction -cost approach developed by Avinash Dixit in his 1996 book, which may provide a middle ground between the other approaches and enable some hitherto imperfectly understood issues of trade policy to be addressed. After discussing briefly the empirical literature relating to the normative and political economy approaches, they provide a sketch of the main features of the...