International Specialization, Interest Groups And Trade Frictions

As the international trade grows rapidly, the trade frictions between countries happen frequently, and the types of frictions become more diverse, the involved products include various agricultural products, manufactured goods, even services. China is one of the most suffered nations. The countries that initiate trade frictions to China are not only including developed countries, but also developing countries. This dissertation is based on the analytical framework of the political economy of trade policy and the perspective of interest groups. It analyzes the evolution and the characteristics of trade frictions in different specializations, so that the longitudinal comparison can be done. And then the dissertation does empirical analysis on various countries and different products, so that it could provide useful inspirations for China to cope with the trade frictions.First, the dissertation describes the research background, objectives, issues, and the previous studies on trade frictions, including the definition, type, economic and political causes of trade frictions, the specific reasons why Chinese suffered trade frictions, the resolving mechanism for trade frictions; the trade effect of welfare distribution, the definition of sufferer and beneficiaries, the political endogenization of trade policy and its characteristics in different specializations.Second, based on the definition of related notion, the dissertation formulates the political economy analytical framework of specialization, interest groups and trade frictions. In the horizontal dimension, each trade friction mechanism under different specializations is the same: the distributional effects of trade produce winners and losers, and it promotes the formation of different interest groups that hold different attitudes for the trade policy. At the domestic level, there's a non-cooperative game between the interest groups and the government which forms the trade policy (the basis of trade frictions). At the international level, the two governments that affected by interest groups game based on the results of its internal game, and the non-cooperative game equilibrium (i.e., a trade war) of the two governments may easily lead to the creation of trade frictions or exacerbated trade frictions. In the longitudinal dimension, the evolution of the international specialization is the dark lines of longitudinally comparative analysis. Third, this dissertation analyzes trade frictions under inter-industry trade. Based on "Protection for Sale" in GH (1994) and the trade war model in GH (1995), it obtains the characteristics of trade frictions under the inter-industry specialization, and concludes: in the importing country, as the weights giving to the interest groups is greater, the ratio of output/imports increases, or other political and economic parameters change, it easily leads to trade frictions or the friction intensifies. But in the exporting country, the changes of political and economic parameters often ease trade frictions. Then it does the empirical analysis of textiles and garments, food and other industries in trade remedy measures, and then it analyzes the classic case of US-Japan textile trade frictions, which the formation and characteristics of the friction is in accord with the theory suggests.Fourth, this dissertation analyzes trade frictions under intra-industry trade. Based on Pao-Li Chang (2005), Wu Renqiang and Liu Haiyun(2009), it obtains the characteristics of trade frictions under the intra-industry specialization, and concludes : Whether a country's industries are organized politically decides the developing direction of trade frictions which caused by the change of the country's political environment in import market and export market. As a country's industrial competitiveness enhances, it is easy to intensify trade frictions on the domestic market and ease trade frictions on the export market. As the product differentiation increases, the trade frictions on both markets intensify. Then it does the empirical analysis of chemical and related products industry in trade remedy measures, and then it analyzes the classic case of the US-Japan semiconductor trade frictions, which the formation and characteristics of the friction is in accord with the theory suggests.Fifth, this dissertation analyzes trade frictions under intra-product trade. Based on Liu Haiyun and Wu Renqiang (2007), it obtains the characteristics of trade policy under the intra-product specialization, and then it makes a further extension to the North-South intra-product specialization, and concludes: the respectively organized situation of intermediate-product interest groups and final-product interest groups jointly determined the emergence and developing direction of trade frictions. For the final-product trade, the degree of intra-product specialization, the final product status of interest groups and the political power comparing between the final-product and intermediate-product interest groups in Northern countries, jointly determined the emergence and developing direction of trade frictions. For the intermediate product trade, in country which intermediate-product interest groups is powerful, its political and economic circumstance change lead to the increasing support for intermediate-product, and this will bring about the intermediate-product trade frictions or frictions increase. Subsequently, based on the degree of intra-product specialization in the major developed countries and trade remedy measures, it concludes that the sectors with a lower level of specialization will have more trade frictions, on the contrary the anti-yes. The trade frictions under the inter-industry specialization are much more than that of intra-industry and intra-product specialization. The empirical analysis of the electrical and mechanical, transportation, textile and garment industries of United States, China and Japan has also been similar results.Finally, this dissertation summarizes different trade frictions under different specialization, and then it does comparative analysis of characteristics in different stage of specialization. Then it provides some inspirations for China to cope with trade frictions and points out the direction for future research.