The Newly Industrializing Countries and the Political Economy of Protectionism

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Abstract
A perennial paradox in political science is that weak actors often prevail in confrontations with more powerful actors. This article explores this problem in the context of the world trading system. The United States and the European Economic Community have been increasingly erecting selective trade barriers, such as voluntary export restraints, that discriminate against newly industrializing countries. Despite this protectionism in textiles, footwear, and other sectors, some relatively weak exporting nations have found ways to increase their gains. Ad hoc American policies have produced a structurally deficient form of trade barriers, which countries such as Taiwan and Korea have exploited. By giving priority to long-run interests, bargaining for loopholes, linking issues, cheating, and mobilizing transnational and transgovernmental allies, these exporters have generally overcome the damaging effects of protectionism. As U.S. interest groups and decision makers learn from their mistakes, the obstacles to success become more severe. But what the newly industrializing nations have shown us is that less powerful states that emphasize bargaining rather than coercion, adjustment rather than intransigence, and the substance of international agreements rather than their form, can turn an adverse situation into advantage.

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