Insights into the Political Economy of Protection: The Case of International Trade in Agricultural Goods

Abstract

In most cases, the rules of the game in international trade are shaped by political economy, but this interplay is more noticeable in politically sensitive sectors such as agriculture. The balance between domestic political interests and the considerations concerning international relations changes over time in response to the joint action of a variety of factors, and this is mirrored in the multilateral trade regime governing this sector. Combining a broad set of empirical evidence available at the international level, this paper aims to capture the pattern of tariff and non-tariff protectionism in the global agricultural trade. The investigation leads to some stylized facts emerging from the selected data and provides interesting conclusions on the behaviour of governments in the equation of balancing domestic interests with the need for international collaboration. The pattern of protectionism in international trade in agricultural products is tariff--based, with a tendency towards softening of this protection in both developed and developing economies. Tariff protection is accompanied by a much lower level of non-tariff protection, where the most frequently used instrument is sanitary and phytosanitary standards, for reasons dictated partly by the specific nature of the sector.