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Pavitar Parkash Singh, Lovely Professional University Unit 10 : Political Economy of Non-tariff Barriers : and Their Applications

Unit 10 : Political Economy of Non-tariff Barriers : and Notes
Their Applications

CONTENTS
Objectives
Introduction
10.1 Societal Approaches to Trade Policy
10.2 Statist Approaches to Trade Policy
10.3 Effects of the Interaction between Societal and Statist Factors on Trade Policy
10.4 The Relationship between Tariffs and NTBs
10.5 Summary
10.6 Key-Words
10.7 Review Questions
10.8 Further Readings

Objectives

After reading this Unit students will be able to:
• Analyse the Political Economy of Non-tariff Barriers.
• Discuss the Societal Approaches to Trade Policy.
Introduction

Much research on the determinants of trade policy has focused on the efficacy of societal and statist
approaches. Societal theories typically attribute patterns of protection to variations in demands made
by pressure groups, whereas statist theories emphasize the effects of the “national interest” and
domestic institutions in determining the level of protection. While both approaches have gained
considerable currency, debates concerning their relative merits have been heated and long-standing.
Yet very little quantitative evidence has been brought to bear on this topic.
In this article, we provide some of the first results of this sort. Our findings indicate that although
societal and statist approaches often are considered mutually exclusive, it is more fruitful to view
them as complementary. Moreover, the interaction between factors that give rise to demands for
protection and those that regulate the provision of protection by policymakers has not been treated
adequately in the literature on foreign economic policy. This gap in the literature is fundamentally
important, since our results indicate that the interaction between these factors is a central determinant
of trade policy. Thus, analyses of commercial policy that fail to consider both societal and statist
variables and the interaction between them are likely to be inadequate.
Our analysis centers on explaining cross-national patterns of nontariff barriers (NTBs). Scholars have
conducted little cross-national research on trade policy and virtually none with a focus on NTBs.
Instead, single-country studies of tariffs comprise much of the existing literature on the political
economy of commercial policy. Yet the usefulness of societal and statist theories of foreign economic
policy hinges on the ability of these theories to explain variations in protection across states, and
NTBs have become increasingly pervasive among the advanced industrial countries. Because the
General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) limit the
ability of contracting parties to impose tariffs, policymakers who view protection as an attractive
means by which to meet the demands of pressure groups or advance state interests are likely to rely
primarily on NTBs. Many observers have suggested that this is occurring with increasing regularity
and that the recent proliferation of NTBs has done much to offset the gains in liberalization made

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