Category Archives: Politics

Against the “startup visa”

Pascal-Emmanuel Gobry:

About a year ago, Paul Graham of Y Combinator put out an idea for a Startup Visa that would allow foreign entrepreneurs to set up in the United States if they could raise enough money from institutional investors such as renowned business angels and VC firms…

Pretty much all the digerati are in love with the idea and believe it will finally allow immigrants to start companies in the US…

For one, getting the visa depends too much on investors. Investors already have too much power in the investor-entrepreneur relationship. If this act is passed, fundraising won’t just affect an entrepreneur’s company, but his or her life. You have to raise that round, or you’ll get deported!…

Another big problem with the Startup Visa Act is that it increases, rather than decreases, risk for the entrepreneurs. Launching a startup by definition means taking on a lot of risk: financial, reputational, you name it. The Startup Visa would increase risk for the entrepreneur by making the stakes so much bigger, by making literally everything depend on success — and not business success, but success how Congress defines it.

Via Tim Lee.

What is Obama’s trade strategy?

Describing the USTR’s willingness to write a trans-Pacific PTA from scratch, Simon Lester says “I feel like we are getting close to seeing what the Obama trade folks have in mind for this one part of trade policy.”

When will find out what the Obama administration plans for any part of trade policy? I’ve stopped tracking day-to-day trade politics, so maybe I missed it, but I haven’t seen anything from the Obama folks about their plan for global economic engagement. Competitive liberalization may have been a bad idea, but at least the Bush administration made their strategy clear.

Is the US likely to double its exports?

In last week’s State of the Union, President Obama said:

Third, we need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So…

So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support 2 million jobs in America.

To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports and reform export controls consistent with national security. We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores.

But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. And that’s why we’ll continue to shape a Doha trade agreement that opens global markets and why we will strengthen our trade relations in Asia and with key partners like South Korea, and Panama, and Colombia.

Dan Griswold:

U.S. exports have not doubled in dollar terms during a five-year period since the inflation-plagued 1970s, not exactly a golden era for the U.S. economy. In real terms, according to the U.S. Bureau of Economic Analysis, exports have not come close to doubling during any five-year stretch in the past 40 years. The fastest growth in inflation-adjusted exports came in the second half of the 1980s, when they grew by two-thirds from 1985 to 1990.

Addendum: Menzie Chinn focuses on nominal exports in a long post that concludes:

So, if you didn’t know it already, achieving the goal of doubling nominal exports depends upon exchange rate pass through, the extent of exchange rate depreciation, the rate of rest-of-world GDP growth, and the evolution of export supply (of both goods and services).

Madagascar’s textile firms lobby for AGOA preferences

From page 7 of today’s Politico:

Mada_AdBanner_Politico_400

That’s the top of an advertisement paid for by the owners of apparel factories in Madagascar and one of their American investor partners, lobbying the US to extend AGOA preferences for textile exports. 28,000 workers signed the petition.

See Aid Watchers for the full story. Here’s an academic piece on foreign lobbying and US trade policy.

Madagascar's textile firms lobby for AGOA preferences

From page 7 of today’s Politico:

Mada_AdBanner_Politico_400

That’s the top of an advertisement paid for by the owners of apparel factories in Madagascar and one of their American investor partners, lobbying the US to extend AGOA preferences for textile exports. 28,000 workers signed the petition.

See Aid Watchers for the full story. Here’s an academic piece on foreign lobbying and US trade policy.

Economist: “Barack Obama and free trade: Economic vandalism”

Contra Doug Irwin, the Economist is quite pessimistic about President Obama’s tire tariffs: “A protectionist move that is bad politics, bad economics, bad diplomacy and hurts America. Did we miss anything?

One might argue that these tariffs don’t matter much. They apply, after all, only to imports worth a couple of billion dollars last year, hardly the stuff of a great trade war… Presidents, after all, sometimes have to throw a bit of red meat to their supporters: Mr Obama needs to keep the unions on side to help his health-reform bill.
That view seems naive. It is not just that workers in all sorts of other industries that have suffered at the hands of Chinese competitors will now be emboldened to seek the same kind of protection from a president who has given in to the unions at the first opportunity. The tyre decision needs to be set into the context of a string of ominously protectionist policies which started within weeks of the inauguration with a nasty set of “Buy America” provisions for public-works contracts. The president watered these down a bit, but was not brave enough to veto. Next, the president stayed silent as Congress shut down a project that was meant to lead to the opening of the border to Mexican trucks, something promised in the NAFTA agreement of 1994. Besides these sins of commission sit the sins of omission: the president has done nothing at all to advance the three free-trade packages that are pending in Congress, with Colombia, Panama and South Korea, three solid American allies who deserve much better. And much more serious than that, because it affects the whole world, is his failure to put anything worthwhile on the table to help revive the moribund Doha round of trade talks. Mr Bush’s tariffs, like the Reagan-era export restraints on Japanese cars and semiconductors, came from a president who was fundamentally committed to free trade. Mr Obama’s, it seems, do not.

One might argue that these tariffs don’t matter much. They apply, after all, only to imports worth a couple of billion dollars last year, hardly the stuff of a great trade war… Presidents, after all, sometimes have to throw a bit of red meat to their supporters: Mr Obama needs to keep the unions on side to help his health-reform bill.

That view seems naive. It is not just that workers in all sorts of other industries that have suffered at the hands of Chinese competitors will now be emboldened to seek the same kind of protection from a president who has given in to the unions at the first opportunity. The tyre decision needs to be set into the context of a string of ominously protectionist policies which started within weeks of the inauguration with a nasty set of “Buy America” provisions for public-works contracts. The president watered these down a bit, but was not brave enough to veto. Next, the president stayed silent as Congress shut down a project that was meant to lead to the opening of the border to Mexican trucks, something promised in the NAFTA agreement of 1994. Besides these sins of commission sit the sins of omission: the president has done nothing at all to advance the three free-trade packages that are pending in Congress, with Colombia, Panama and South Korea, three solid American allies who deserve much better. And much more serious than that, because it affects the whole world, is his failure to put anything worthwhile on the table to help revive the moribund Doha round of trade talks. Mr Bush’s tariffs, like the Reagan-era export restraints on Japanese cars and semiconductors, came from a president who was fundamentally committed to free trade. Mr Obama’s, it seems, do not.