The Transition from Trade Protection to Trade Liberalization: Lessons for Sustainability Transitions

Event: International Sustainable Transitions Conference IST 2016
Date: Wuppertal, Germany, September 6-9, 2016
Conference Paper

The literature on sustainability transitions is goal oriented, aiming at changing the future, unlike traditional social science which focuses mainly on explaining the past and the present. In order to develop strategies for changing the future, this literature has developed various theories of change, based on some analysis of the past, but mostly draws lessons from the recent experience of specific policy areas that are close to the focus of change efforts. While many useful insights are generated, they are not necessarily very systematic. Moreover, it has been difficult to develop good lessons for highly effective transition strategies, partly since there are few existing cases of advanced sustainability transitions. This paper argues that the transition literature could develop a clearer understanding of the drivers of change to help develop more effective strategies by exploring a wider range of social science literature with a wider range of theories and frameworks for explaining major socio-economic change, even though these changes occurred in fields that are not closely related to major desired future directions of sustainability.

This paper introduces the case of the transition from trade protection to trade liberalization, a major about-face which completely transformed global trade governance, to draw some lessons for the sustainability transitions community from the discipline of political science. Protection of domestic industries by using trade barriers such as tariffs and quotas was the dominant national policy trend and the related international trade regime from the beginning of the modern nation-state from the 1500s. After World War II, the direction of the global policy regime reversed, moving steadily towards ever-increasing trade liberalization and restricting countries’ ability to use protectionist measures to support domestic industries. This is a well-researched topic, and many theories have been put forward to explain this transition, especially this shift in the policy of the US, which played a key leadership role in promoting it.

Changes in technology and economic structure played a role, although political science research has emphasized a variety of other factors such as the international political structure, including international institutions; domestic institutional structures; interests, interest groups (stakeholders), and interest group structures; and the role of ideas. These sets of factors have also been used to explain other major regimes and transitions in the field of international political economy such as the international monetary system and macroeconomic policy coordination. There is no consensus regarding which factors are most important, and this paper does not intend to take a stand. This paper is also not a comprehensive review of the literature on trade policy. Rather, this paper seeks to highlight the major theoretical perspectives which might be applicable to transition research and present the key factors in an organized way to the sustainability transitions community and draw implications for how they can be used to strengthen sustainability transition research in terms of theories of change. Many of the suggestions derived from these perspectives relate to traditional national government policymaking processes. These are not necessarily fashionable as current literature tends to emphasize bottom up multistakeholder processes, since national government policy processes have not been easy for proponents of sustainable development to access effectively. Nevertheless, sustainability transitions could be accelerated if they could be promoted through national government policies. Political science perspectives can also contribute to explaining why many sustainability transition efforts fall short. Implications for “implementation” are also developed. Insufficient implementation of trade agreements is essentially cheating – a decision to not implement – not lack of capacity. Somehow, many countries with low capacity for sustainable development manage to develop reasonably effective customs administrative capacity to regulate trade and collect trade taxes.