Category Archives: Politics

Who's a trade lobbyist?

Bombardini and Trebbi: “The data show that sectors characterized by a higher degree of competition (more substitutable products and a lower concentration of production) tend to lobby more together (through a sector-wide trade association), while sectors with higher concentration and more differentiated products lobby more individually.”

Trade adjustment assistance in the stimulus package

Randall Soderquist notes that the stimulus package contains major trade adjustment assistance programs, such as “TAA for communities, coverage for workers in the service sector, eligibility for secondary workers in the supply chain, and availability of health care coverage.”

Now that we have significant — and of more importance — well-funded programs designed to assist American workers, it is time that President Obama move aggressively to create a trade agenda that will not only protect the economic welfare of the United States, but also establishes the conditions leading to economic growth, poverty alleviation, and political stability in the international system. Leadership on trade, especially in a world at risk because of the financial crisis, requires looking forward at obvious opportunity, not just back at glaring mistakes.

Susan Schwab's farewell

I never found enough time during the holidays to write a retrospective on the Bush administration’s trade policy woes, but its parting shot – a 300% duty on Roquefort – seems like an apt summary. The USTR’s new tariffs on French truffles, Irish oatmeal, Italian sparkling water, and foie gras abide by the rules (WTO-sanctioned retaliation for the EU’s ban on imports of US beef), but they look more like the last gasp of opportunistic protectionists than a strategic move by free traders. Can Susan Schwab seriously say that “the goal of these modifications is to reach a resolution of the dispute” when she imposed the duties five days before leaving office?

Vox's Global Crisis Debate

Vox has launched a Global Crisis Debate forum in coordination with the UK government to let economists across the globe debate what should be done. The debate on international trade and open markets is moderated by Richard Baldwin, and the debate on development and the crisis is moderated by Dani Rodrik. Some snippets:

Simon Evenett is skeptical that a new surveillance mechanism or a declared standstill on protectionist measures would have any bite.

Marc Auboin surveys how quickly trade financing is drying up and what governments might do to intervene effectively – fows of trade finance to developing countries seem to have fallen by some 6% or more year-on-year.

Dani Rodrik says that the crisis is also an opportunity for developing countries, as they have a chance to gain “a much bigger say in the institutions that govern economic globalisation.” He’s pushing for counter-cyclical capital-account management, cracking down on tax evasion, a Tobin tax, and WTO guarantees for “policy space.”

As usual, Rodrik has drawn a number of replies. Nancy Birdsall says developing countries haven’t put themselves in the position to make such reforms. Yung Chul Park and José Antonio Ocampo largely agree with Rodrik. I am sure that those who disagree will make their appearance soon, however.

Finally, AEI’s Philip Levy outlines political reasons to be unhappy about “Buy American” provisions in the stimulus package – he thinks that it’ll provoke a backlash that starts a procurement war, which will only hurt the US.

Strong dollar, yada yada yada

The Economist notes that Timothy Geithner says that “a strong dollar is in America’s national interest” and that “China is manipulating its currency… China cannot continue to get a free pass for undermining fair trade principles.”

So either America is very upset with China for doing something that’s in America’s national interest, or American officials are very much opposed to things which are in the national interest, or statements from Treasury officials generally consist of large loads of hooey. Naturally, it’s the latter.

No short-run fix for trade’s popularity

Ben Muse on the Obama administration’s difficulties ahead:

[Timothy Geithner, Treasury Secretary-to-be] sees the importance of an open economy, and is concerned about building political support for it. He doesn’t have a plan to do it. Telling people how important integration is to their well-being isn’t working. A better educated, more adaptable workforce, and programs to address the frictions associated with adjustment, may not change attitudes and if they do, may only do so in the long run. To top things off, the political problem must be solved in the middle of a delicate and consequential transition.