Resisting the protectionist temptation: industry and the making of trade policy in France and the United States during the 1970s

Abstract

Why were advanced industrial states able to keep their economies relatively open to foreign trade in the 1970s and the early 1980s, despite declining U.S. hegemony and increasing economic difficulties? This article argues that an international-level change affected domestic trade politics and contributed to the maintenance of a liberal trading system. Examining the United States and France, the argument proceeds in two steps, showing first how domestic trade politics were changed and second how this change affected the policy process. Initially, I argue that aspects of the increased international economic interdependence of the postwar period altered domestic trade politics by creating new, anti-protectionist preferences among certain firms. Firms with extensive international ties through exports, multinational production, and global intra-firm trade have come to oppose protectionism, since it is very costly for them. Evidence for these new preferences was apparent among both American and French industries. Despite different contexts, firms in the two countries reacted similarly to the growth of interdependence. Next, I ask whether firms' preferences affected trade policy outcomes and show how these preferences were integrated into the policy process in both countries. Trade policy structures in neither country prevented firms' preferences from affecting the policies adopted. Even in France, a so-called “strong” state, firms' preferences were a key influence on policy. In the trade policy area then, the French and American states did not appear to differ greatly in their susceptibility to industry influence, even though their policy processes were different.