Purchasing Protection? The Effect of Political Spending on U.S. Trade Policy

Abstract

The issue of whether or not money influences policymaking has been widely debated in American politics. While a direct link between money and policy outcomes has proven difficult to make, bureaucratic decisions on trade protection provide an opportunity to link politically active firms and industries to policy outcomes. The U.S. International Trade Commission (ITC) and the U.S. Department of Commerce both play a major role in making trade policy by administering several important trade laws, including the U.S. antidumping law. Firms can petition the ITC and Commerce for protection from foreign firms that are alleged to engage in the unfair practice of dumping their goods on the U.S. market. Evidence suggests, however, that firms use this law as a means of seeking protection from foreign competition, even when that competition is fair. As the stakes are high for both domestic and foreign firms, there is the potential for political influence. Focusing on lobbying activities and campaign contributions, we analyze the influence of domestic and foreign monies on bureaucratic decisionmaking on trade policy.