The Political Economy Of Trade Policy Analysis

Mainstream international trade theories have two basic arguments. First, free trade will maximize the world welfare. Second, a country's unilateral trade liberalization can maximize its own welfare. For a long time, mainstream economists have been encouraging the free trade policy and the standard of the national welfare has always been the starting point and destination of traditional trade policy theory. However, in reality, protectionism forces are enduring. Why? We think that traditional economics lack of some kind of independent political decision-making theory.The Government in the formulation and implementation of public policies are exogenous actors, which separates the relationship between politics and economics and ignores that the government often pursue their political interests through the way of economic policies.Therefore, the analysis and study on the process of decision-making of trade policies has the universal significance. Since the 1960s, political economics of trade policy which studies how political forces affect economic policy began to rise. It includes the public choice and collective action analysis on the base of neo-classical economics. From then on, people began to pay attention on the policy-making process.In this paper, after describing the traditional view of trade policy and views of political economies, author will take the foreign trade policy of USA for example and use the perspective of political economics to analyze the reasons of protection policies in the world.In addition to the introduction, the paper is divided into four chapters. In the introductory section, this paper describes the background and significance of the topic selection, reviews the current situation of research at home and abroad, define the research object and research methods and point out the innovation and shortcomings of this paper.The main body is from Chapter 2 to Chapter 5, which can be divided into three parts. The first part is the base of ideology and theory (Chapter 2), including the summaries of the traditional theories and empirical analysis. The second part is the practical application of the research object (Chapter 3, Chapter 4).The author takes the USA for example and analyzes several departments that participate in the decision-making of international trade policies and interest groups by political economics.Finally, it is the part of practical significance, including the summary of the political economics of trade policy analysis and the measures that China in reality should adopt, especially the response of trade policy adopted by the United States.