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Resisting the protectionist temptation: industry and the making of trade policy in France and the United States during the 1970s

Published online by Cambridge University Press:  22 May 2009

Helen Milner
Helen Milner
Affiliation:
Assistant Professor at the Institute on Western Europe, Columbia University, New York City.
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Abstract

Why were advanced industrial states able to keep their economies relatively open to foreign trade in the 1970s and the early 1980s, despite declining U.S. hegemony and increasing economic difficulties? This article argues that an international-level change affected domestic trade politics and contributed to the maintenance of a liberal trading system. Examining the United States and France, the argument proceeds in two steps, showing first how domestic trade politics were changed and second how this change affected the policy process. Initially, I argue that aspects of the increased international economic interdependence of the postwar period altered domestic trade politics by creating new, anti-protectionist preferences among certain firms. Firms with extensive international ties through exports, multinational production, and global intra-firm trade have come to oppose protectionism, since it is very costly for them. Evidence for these new preferences was apparent among both American and French industries. Despite different contexts, firms in the two countries reacted similarly to the growth of interdependence. Next, I ask whether firms' preferences affected trade policy outcomes and show how these preferences were integrated into the policy process in both countries. Trade policy structures in neither country prevented firms' preferences from affecting the policies adopted. Even in France, a so-called “strong” state, firms' preferences were a key influence on policy. In the trade policy area then, the French and American states did not appear to differ greatly in their susceptibility to industry influence, even though their policy processes were different.

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Articles
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International Organization , Volume 41 , Issue 4 , Autumn 1987 , pp. 639 - 665
Copyright
Copyright © The IO Foundation 1987

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References

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18 The assumption that the costs of other options are about equal for all firms is probably not accurate. But it is unclear whether any systematic difference in costs exists for internationally oriented versus domestically oriented firms. It could be argued that domestic-centered firms, generally being smaller and more flexible, will find adjusting to foreign competition less costly; on the other hand, large multinationals may have advantages—i.e., in obtaining capital or buying into new ventures—that will make adjustment less costly for them. Whether it will be more costly for one group over the other probably depends on the particular firms and industry. For an interesting discussion of how other options affect demands for protection, see Aggarwal, V., Keohane, R., and Yoffie, D., “Dynamics of Negotiated Protectionism,” APSR 81 (06 1987), pp. 345–66Google Scholar. Their argument focuses on industries instead of firms, however.

19 Milner, “Resisting the Protectionist Temptation.”

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22 Ibid., chap. 6, pp. 437–66.

23 Ibid., pp. 418–36.

24 Ibid., chap. 5, pp. 343–71.

25 In the 1980s, increased action has been taken against the Japanese. A number of unfair trade complaints have been filed and the U.S. government has also negotiated a semiconductor export pricing agreement with Japan. Many of the firms involved in these actions have been more concerned with opening the Japanese market and forcing the Japanese to play by “the rules” than closing the U.S. market. Firms in this industry have developed an increasingly strategic vision of their interests in trade; see forthcoming paper by H. Milner and D. Yoffie, “Strategic Trade and Industry Preferences,” on this point.

26 Milner, , “Resisting the Protectionist Temptation,” chap. 6, pp. 549–75Google Scholar.

27 Ibid., chap. 6, 495–522.

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37 Krasner, “U.S. Commercial and Monetary Policy,” in Katzenstein, ed., Power and Plenty.

38 Zysman, “The French State”; Katzenstein, “Conclusion”; Zysman, Governments, Markets, and Growth, chaps. 1–3 and conclusion.

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43 Milner, “Resisting the Protectionist Temptation,” chap. 6.

44 Ibid., chap. 6; Beauchamp, Un État dans L'État.

45 Milner, “Resisting the Protectionist Temptation,” chap. 6, pp. 576–604.

46 Ibid., chap. 6, pp. 437–66.

47 Ibid., chap. 6, pp. 523–48.

48 Evidence of the fragmentation of U.S. trade policymaking is contained in Krasner, “U.S. Commercial and Monetary Policy,” in Katzenstein, ed., Power and Plenty; Destler, I.M., Making Foreign Economic Policy (Washington, D.C.: Brookings, 1980)Google Scholar; Cohen, Making of U.S. International Policy.

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50 Suleiman, Elites, chaps. 8 and 9.

51 Milner, “Resisting the Protectionist Temptation,” chap. 6. The footwear, radio and television, and watch and clock industries are examples. An illustration from this study was Thomson's head of international operations, who was the brother of the president of the republic from 1974–81.

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