The Politics of Trade Adjustment vs. Trade Protection

The United States’ Trade Adjustment Assistance (TAA) program seeks to help workers transition away from jobs lost to import competition. By contrast, trade remedies like antidumping seek to directly reduce the effect of competition at the border. Though they have very different economic effects, we show that trade adjustment and protectionism act as substitutes. Using the first geo-coded measure of US trade protectionist demands, we show that controlling for trade shocks, counties with a history of successful TAA petitions see fewer calls for trade protection. This effect holds when we confine our analysis to the steel industry, a heavy user of antidumping duties. And though they are both means of addressing import exposure, the two policy options have distinct political effects: in particular, successful TAA petitions carry a significant electoral benefit for Democratic candidates. Greater recognition of the substitutability of trade compensation and protectionism would improve governments’ response to import exposure.

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The Economics of Trade Protection

10.1017/cbo9780511571978 ◽

1990 ◽

Cited By ~ 90

Author(s):

Neil Vousden

Keyword(s):

Trade Protection

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The Role of Trade Adjustment Assistance on Intra-Industry Reallocation of Labor

Institute for Future Growth ◽

10.29143/kuifg.2018.4.1.3 ◽

2018 ◽

Vol 4 ◽

pp. 3-22

Author(s):

Yong Joon Jang ◽

IL-Tae Son

Keyword(s):

Trade Adjustment Assistance ◽

Trade Adjustment

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Does Occupational Training by the Trade Adjustment Assistance Program Really Help Reemployment?: Success Measured as Matching

SSRN Electronic Journal ◽

10.2139/ssrn.1962169 ◽

2011 ◽

Author(s):

Jooyoun Park

Keyword(s):

Trade Adjustment Assistance ◽

Occupational Training ◽

Assistance Program ◽

Trade Adjustment

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Liberal development, 1925–46

10.1093/oso/9780198723349.003.0005 ◽

2017 ◽

Author(s):

John Toye

Keyword(s):

Developing Countries ◽

Economic Development ◽

Exchange Rate ◽

Developing Country ◽

Trade Protection ◽

Communist Country ◽

Economic Policies ◽

Government Finance ◽

Soviet Government ◽

Experimental Economic

Keynes’s writings are often disregarded in the context of economic development, overlooking that Russia was a developing country in his lifetime. He wrote about the experimental economic techniques that the Soviet government employed. He visited Russia three times and wrote A Short View of Russia in which he explained and criticized Bolsheviks’ policy of export and import monopolies, an overvalued exchange rate, inflationary government finance, and the subsidization of industry. These were policies that many developing countries adopted after decolonization. Keynes’s conclusion was that they were inefficient and that ‘bourgeois economics was valid in a communist country’. Did Keynes change his mind in the 1930s? If anything, he grew more harshly critical of Soviet economic policies and carefully distinguished them from his own endorsement of moderate trade protection and government supplementary investment in times of depression.

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