| This paper attempts to answer three questions. First, what has happened to the demand for trade protection and liberalization? In particular, how have the positions of different special interest groups on trade issues changed over time? Second, what are the factors that determine their attitude toward liberal trade policy? Third, does lobbying activity by interest groups matter in how their representatives vote on trade legislation?By examining witnesses' testimonies at the Congressional Hearings on trade legislation from 1934 to 1988, I document that labor groups have become much more protectionist in this period whereas capital groups have become more protrade. I attribute this reversal to a change in intersectoral mobility of production factors. The traditional international trade theory tells us that the more sector specific a factor is, the higher stake it has in that sector. Diversification of portfolio allows capital to be less sensitive to a particular sector, thus making capital indirectly mobile. There is some evidence from the U.S. Decennial Census that labor has become more sector-specific. In the supply side of trade policy, there is a similar reversal previously protrade Democrats have become protectionists, and formerly protectionist Republicans have become protrade at the congressional level. |
