The Determinants of Trade Policy Preferences in the UK

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One is that the factor type dominates the sector of service or employment and thereby becomes an important determinant throwing light on the positive preference for trade barriers. Secondly, the study also includes the homeownership aspect to the determinants of preferences regarding trade. It indicates that home ownership taken independently of the type of factor has a correlation with trade barrier support in the countries where the manufacturing mix has a concentration in sectors of comparative disadvantage.Here, we see that the preferences have a dependence on the effect of trade policy on the income of factors of production as well as on the economic benefit of the individual. Therefore, the preferences towards trade policy may be a result of not the only income of the factors, but also of the ownership of the assets that they possess. However, the assets such as housing do not become a part of the standard theory of trade since it is not employed and nor is it presently produced asset. The study also says that ownership of the home is correlated to a negative preference for free trade in places having a manufacturing mix that is concentrated in comparative-disadvantage sectors.It is to be noted that when the economy runs on the basis of certain sectors, factors have a direct link in those specific sectors. Hence, it so happens that factors in different sectors show their different preferences i.e. support or negativity. This happens when there is an assumption of immobility of factors between sectors. Here, if the sector is not an exporting one, they prefer protection. However, free trade is the most preferred, if the sector is an exporting one, which means there is a negative preference for trade barriers. However, if we assume that factors have mobility, factors who have a higher supply (those factors that are more in number) will have a preference for free trade policy those which are less in number will have a preference towards protection.