A Political Economic Analysis Of Technical Barriers To Trade

Since the 1990s, with the sucessful reductions and limitation of customs duties and nontariff barriers by GATT/WTO, the technical barriers to trade(TBT), which is used to promote technique level and maintain the consumer's benefits, has been the most important means to protect domestic products and industries by various countries, especially by the developed countries. And TBT has and will have profound influence on the international trade and the world economy, particularly on the economy of developing countries. Traditional theories of international trade and the new trade theory cannot provide strong theoretical basis for trade protectionism side of TBT. As for how to explain the formation of TBT, the political economy of trade provides a more explainable perspective.The dissertation first review the existing literature. Research on TBT is concentrated at three aspects:measurement of TBT, the economic explanation for the formation mechanism and the effects of TBT. The literature of political economy on trade put forward a lot of theories and empirical models, but few analyzes the TBT as a protective measure from the perspective of political economy. The review of literature provides approaches to the research in the dissertation.Public choice theory is used to analyze the formation of TBT in the policy market, the formation process of TBT is the result of interest expression and policy choices made by different interest groups and the government. Policy choice is a game under the interest conflicts. It's a political process between the government and interest groups, and among interest groups. Because of the asymmetry in "politics market ", the nature of TBT inclines to trade protection. Then game theory is used to analyze the national transmission mechanisms and the international game process of decision-making on TBT. When there is no negative externality, whether the protection is provided depends on the weight of considering the benefit of domestic interest groups given by the government. When there is negative externality the government tends to provide protection by setting a higher TBT. And the government will set a lower TBT when there are possibilities of revenge from other countries. To explore the impact of tariffs or subsidies reductions on TBT setting, we conculde as following:In monopoly market, reducing tariffs of subsidies creat incentives for the government to raise TBT. In duopoly market, only if the government cares mainly about the tariff revenue or the TBT's marginal impact on the per unit externality is large, will it raise TBT following tariffs or subsidies reductions. And in other cases,the government's optimal response to tariffs or subsidies cuts will be to lower TBT. A country has stronger motivation to set higher TBT in the game among countries. But the country will take more cautious attitude because it doesn't know whether the other country takes retaliatory measures or not. Then the eventual equilibrium is emerged.In order to test the interest group's effects to the decision-making of TBT by the government, the paper takes a regressive analysis to the characteristics indicators of the "interest group" and "state interest" on the TBT frequency of America and China respectively. The result shows that when the appealed interest of interest groups is in accordance with the government's basic aim its interest will be embodied in TBT policy decision-making in USA,. On the contrary, it will not be so. The result shows there is a lack of the well organized interest groups in China. Using a case of TBT frictions between China and USA, this article analysiszes the game of setting TBT between countries. The result shows that the two countries choose the way of cooperation but not continued fighting. Finally this dissertation summarizes the conclusions in all the chapters and points out what will be the solution and choice of China's TBT policy.