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The Political Economy of U.S. Automobile Protection

In: The Political Economy of American Trade Policy

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  • Douglas Nelson

Abstract

This paper examines the political process through which the U.S. auto industry pursued and ultimately received protection from Japanese competition. Following a brief review of research on the competitiveness of the industry (section II) and on the effects of protection on industry performance (section III), it is not at all obvious that trade protection was the most effective policy response to the industry's economic problems. The remainder of the paper argues that the industry's political strategy reflects a response to a crisis in the political-economic regime regulating relations among the major interests in the U.S. auto industry. To make this argument, section IV develops the notion of a sectoral regime and applies it to the auto industry. Section V develops the argument further suggesting that conditions in the industry constituted a regime crisis and reexamines the industry's pursuit of aggressive trade policy toward Japanese producers in this context. Section VI illustrates the usefulness of this perspective by examining the politics of North American integration from the perspective of the auto industry. Section VII concludes.
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Suggested Citation

  • Douglas Nelson, 1996. "The Political Economy of U.S. Automobile Protection," NBER Chapters, in: The Political Economy of American Trade Policy, pages 133-196, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:8705
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    Cited by:

    1. Laixun Zhao, 1996. "The Complementarity Between Endogenous Protection And Direct Foreign Investment," Economics and Politics, Wiley Blackwell, vol. 8(1), pages 61-72, March.
    2. Scott Bradford, 2000. "Rents, Votes, and Protection: Explaining the Structure of Trade Barriers Across Industries," Econometric Society World Congress 2000 Contributed Papers 1717, Econometric Society.
    3. Zhou, Dongsheng & Vertinsky, Ilan, 2002. "Can protectionist trade measures make a country better off? A study of VERs and minimum quality standards," Journal of Business Research, Elsevier, vol. 55(3), pages 227-236, March.
    4. Rodrik, Dani, 1994. "What does the Political Economy Literature on Trade Policy (Not) Tell Us That We Ought to Know?," CEPR Discussion Papers 1039, C.E.P.R. Discussion Papers.
    5. Jin, Tuofu & Eapen, Alex, 2022. "‘Delayed Forbearance’: Multipoint contact and mutual forbearance in inaugural and subsequent competitive actions," Journal of Business Research, Elsevier, vol. 149(C), pages 938-953.

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