Trade Policy Formation

The formation of trade policies is a very complex process. Trade policies take various forms in different periods and different conditions because the objective environment and subject demands have changed for the formation of trade policies. Only after understanding such objective environment and subject demands can we find the rules for the formation of trade policies; and only after grasping the mechanism and rules for the formation of trade policies can we understand the relations between the objectives and attributes of trade policies and the policy effects induced. From the viewpoint of the theory of public choice, the theory of institutional shifts and the game theory, this dissertation has investigated the formation of trade policies from three aspects.In the first aspect, the theory of public choice, the theory of institutional shifts and the game theory have been adopted for detailed analysis on the motives and behaviors of the economic subjects in the formation of trade policies, thus the following features have been elucidated in the formation of trade policies: Firstly, different economic subjects have different preferences to the trade policies that are the results of the joint selection and roles of different subjects. Secondly, as a kind of system, the trade policies may shift, which is the results of joint role of the internal and external factors of the systematic environment. Thirdly, the formation of the trade policies finally presents as different combinations of the policies of trade protection and free trade. The amount of trade benefits determines the preference of economic subjects toward die policies of trade protection and free trade as well as the motive force for them to take actions. Fourthly, since the institutional environments are different, the government of some countries has much biggerguiding powers in the formulation of trade policies, while the industrial groups or enterprise groups of other countries have such powers. Fifthly, in open economies, the formation of the trade policies are influenced not only by domestic political and economic groups of interests but also by various international groups of interests, thus the trade agreements are only the result of international coordination. Sixthly, the objectives and effects may be different in the process of the formation of the trade policies and the non-synchronized structure (without common interest base) of economic subjects is the common reason for the non-optimization of the objectives of the trade policies and the dynamic inconsistency for the formation of the trade policies.In the second aspect, the formation of the trade policies has been analyzed from the evolution of the trade policies of the world. The history of the world trade lias indicated that the formation of the trade policies is an intrinsic and dynamic decision-making process. The orientation of the trade policies not only depends on the subjective factors of the policy makers but also meets die demands of the objective institutional environment. The trade policies of various countries present inconsistent evolution in the trend of liberalization of trade because the various domestic economic subjects have different subjective demands and objective environments. WTO is a must resulting the development of international trade, the demands for international coordination as well as the demands for reciprocal transaction of policies between various countries. Since the trade policies have their own system for interest distribution, various countries hope their interests may be presented in the rules of WTO; and since different countries have different factor endowments and economic structures, they have underlying interest conflicts inthe formulation of the rules of WTO. Thus the public policies in international trade evolve continuously in the coordination and competition of trade benefits of various nations.In the third aspect, various viewpoints have been adopted in analyzing the stages and features of the trade policies of China,...