Technological Progress, Technical Barriers To Trade And International Trade

In recent years, the hi-tech industry has become the pioneer of the international trade because of the tremendous development of technology in every aspect of human life, such as communication and biology. As a result, hi-tech production export has increased very quickly all over the world, which has changed pattern of international trade and comparative advantages among the countries.The traditional trade theories usually focused on the comparative advantage in the production. For example, the Comparative Advantage Theory of David Ricardo considered the labor as the only factor in the international trade. So each country specializes in the production of the goods and the export of them in which it has comparative advantages. Also, the H-O theory considered that there are two factors of production, labor and capital between the two nations. Meanwhile, it assumes that all nations use the same technology in production and the relatively labor-rich nation exports the relatively labor-intensive commodity and imports the relatively capital-intensive commodity. But the previous trade-theory literature gave no explicit reasons for the difference in comparative costs. New theories of international trade pioneered by Krugman and other economists focus on the nature of technological differences among countries, in order to make the model consistent with observed patterns of trade. But many of researches focused on technology diffusion, spillovers and learning-by-doing in the trade. The author will study how technology affects the international trade. The paper is divided into three parts, the first part deals with the impact on trade brought about by the technological development of the export country, and the second part focuses on the impact on trade brought about by the technological development of the import country, and the last part of the article discusses strategic trade policies home and abroad. At first the article analyses the cause of technology promoting trade from the angle of economics and establishes a function of increasing rate of export and improving rate of technology through constructing the export model, through which the author draws a conclusion that technology progress can promote the exports. And then, an empirical study of technology and trade proves that there is a cointegration between China's technology progress and export, and technology progress is also the reason of the increase of export. Moreover, the empirical study of panel data concludes that the impact of Chinese technological progress on exports is still limited compared with those developed countries, such as America, Japan, France, Germany, and so on. This limited impact is mainly due to the high proportion of the processing trade and relatively low capacity to turn the technological innovation into the production. Also, there are substantial differences among the provinces in China. In fact, the provinces with better tradition of the export and innovation are more capable to increase the export by technology, and vice versa.The article analyses the reason and character of technical barriers to trade through the research on WTO regulations, and concludes that technological difference and progress is an important factor that causes technical barriers to trade (TBT). The TBT can actually protect people'health, environment and public safety, but they becomes the barriers in its real sense because it increases the cost of trade like the tariff. Also, the article analyses the TBT in game theory, and concludes that the developed countries with technological advantage incline to set up TBT initiatively for their own interests, and the developing countries have to adapt to TBT. In addition, the article analyses the character and trend of TBT in America and European Union. TBT's negative impact on the international trade, especially on China's export is also studied in the article. So the suggestion to increasing China's exports is given that China should make tremendous technology progress to overcome TBT.The last but not the least, the article analyses strategic trade policies in the developed countries and summarizes the advantages and disadvantages of the strategic trade policies which promote exports by means of technology. The conclusion can be drawn that the strategic trade policies can increase the export, especially the export of hi-tech products, but they may decrease the market efficiency, such as the distortion of the allocation of the resources. China, a developing country with a huge amount of international trade, should have some strategic trade policies to increase the export by technology; for example, R&D subsidy and effective protection. At last, the article empirically studies the Chinese strategic trade policy, Stratagem of Trade Promoted by Science & Technology, and draws the conclusion that it increases the export especially of hi-tech products and promotes the development of economy and trade. But there are some problems still exist; for example, the technical content of exports is not high comparatively. Thus, the experience and lessons can be acquired, and the suggestion to policies of China's international trade is put forward in the article. So we can conclude that China's strategic policy which promotes trade by technology is the essential way to make China a powerful country in trade.