Automobiles in international trade: regime change or persistence?

The concept of a “regime” is frequently used to describe and explain behavior in international political economy. Peter Cowhey and Edward Long, attempting to test theories of surplus capacity and hegemonic decline, advanced a version of a regime governing international trade in automobiles which was fundamentally liberal from 1966 to 1975, but then collapsed into protectionism. Their diagnosis is mistaken, however, because the trade regime for autos was neither as liberal as they assert during the 1950s and 1960s, nor as protectionist as they believe it has become in the 1980s. The discussion focuses on a new definition of the auto trade regime based on four fundamental rules that have persisted since the 1950s. By examining data on auto imports since 1955 on a region-by-region basis, it becomes clear that the trade expansion of the postwar years was not based on a global liberalization of the trade regime, but on carefully managed regional arrangements that favored imports within the region, or extra-regional imports that did not threaten domestic producers. The flurry of restraints on Japanese imports in recent years is not a collapse into protectionism, but a reinforcement of the fundamental regime rules. The auto industry case illustrates the tendency of analysts to underestimate protectionist elements in industry trade regimes and to overestimate the amount of changes that take place in their fundamental rules.