Strategic Trade Policy is not Good Strategy

Abstract

The focus of this paper is the process by which strategic trade policy is implemented. Due to an institutional structure under which democratic government is responsive to pressure groups, strategic trade policy may include strong protectionist elements. While the objective of strategic trade policy is to promote new frm-specific advantages for chosen industries, in practice a type of corporate "shelter" results. In terms of the strategic management literature we find that there is a type of "administrative heritage" in government policy making that hinders the implementation of effective strategic trade policy. From the viewpoint of both corporate strategy and public policy, we find that the result is neither efficient nor effective.