Business Interest Lobbying And Protective Trade Policy Of The European Union

The political economy of international trade believes that a country's pursuit of protective trade policy instead of free trade policy as prescribed by traditional international trade theories is the endogenous result of the gaming among different interest groups who aim to maximize its self-interests through various mechanisms.The European Union(The EU),as the world's largest trading powerhouse and one of the key actors for the development of international economic and trade rules,while passionately calling for the founding and stability of global multilateral trading system,has been an active user of protection measures.Combining quantitative analysis with qualitative analysis,this paper conducts an empirical study from the perspective of political economy of international trade on the relationship between the EU's protective trade policy and the lobbying by business interest groups by drawing upon the “Protection for Sale” model on endogenous tariff formation created by Grossman and Helpman and an in-depth multi-disciplinary account of key features and lobbying patterns of business interest groups in the EU and the decision-making process of the EU trade policy.The results of the empirical study provide evidence of a positive correlation in the EU between the level of non-tariff barriers of a sector and the lobbying of trade policymakers of the European Commission by interest groups representing the sector.It is found that participation in the lobbying tends to raise the level of non-tariff barriers.However,the empirical analysis fails to prove that a significant positive correlation exists between the frequency or intensity of business lobbying and the level of non-tariff barriers in the EU.