The Political Economic Analysis Of Trade Protection In The International Financial Crisis

Under the influence of international financial crisis, which triggered by The United States sub prime mortgage crisis in 2007, the economy of the countries down turned and recession occurred. The United States launched a new round of trade protectionism trend, and the trade protectionism was not only politically but also with more new features. By reading a lot of domestic and foreign research, and according to trade theory of traditional economics, the free trade policy can lead to Pareto optimal, and then the states should choose free trade policy as their preferred choice in order to maximize their own welfare. But the reality of trade politics in these countries is not as the trade policy theory explained. Trade protectionism under various names has always been the mainstream of national trade politics. Built on the basis of public choice theory of political economy theory of trade policy that is generated in this background, according to this theory, international trade policy is a public, government and various interest groups were the suppliers and demanders respectively. There is a game between government and various interest groups, which determines the form and extent of trade politics.First of all, based on the political economy of trade theory, the article constructs the theoretical framework, and then use Gross-Helpman model to analyze the issue of trade policy formulation in the international financial crisis. Thirdly, as The United States trade policy as an example, analysis of trade policy-making process of the endogenous, that is trade protection policy is the political process by interest groups to control the legislative process. The United States trade policy formulation mainly due to two major domestic interest groups:import competing group and export promotion group, these interest groups have formed by the related industries, through lobbying, demonstrations, political donations and other means of impacting Members Congress, thereby affecting the trade policy formulation, in the analysis on the activities between interest groups which impact the trade policy formulation by using game theory. At last, the article analyses the characteristics and effect of the new round of trade protectionism, china's trade suffered an enormous impact in this round of trade protection, so the article puts forward response measures.