Brad DeLong assailed the Washington Post twice today, yet refrained from attacking the front page investigative story centered on this premise:

Each legislative season, corporate executives and lobbyists quietly draft hundreds of bills to suspend tariffs. Over time, the changes cost taxpayers hundreds of millions of dollars in lost revenue, a Washington Post analysis of U.S. trade data found.

No economist is quoted in the story. Apparently the authors didn’t put much effort into finding someone willing to suggest that lower input prices might be good for consumers (a.k.a. taxpayers) and the economy.

Tom Palmer pointed to the story and has more.

[I have some qualms about this form of liberalization, especially its temporary nature, but I don’t buy the WaPo spin.]

Daniel Drezner trots out some content from his new CFR book in a WaPo column. The most interesting part:

Why has U.S. trade policy ground to a halt? Shifts in domestic attitudes and world politics have combined to create one of the least hospitable environments for trade liberalization in recent memory. The most dramatic shift in opinion came from Americans making more than $100,000 a year. According to the Program on International Policy Attitudes (PIPA), support in that income group for promoting trade dropped to 28 percent in 2004 from 57 percent in 1999. A September 2005 German Marshall Fund (GMFUS) survey revealed that 57 percent believe that freer trade destroys more American jobs than it creates, and 58 percent of Americans would favor raising tariffs for imported goods if it meant protecting jobs — a higher number than in Germany, France, or Great Britain. Healthy majorities believe that trade primarily benefits multinational corporations at the expense of small businesses.

While those surveyed are incorrect about the net impact on jobs, the intuition that trade benefits larger firms and drives out smaller (less productive) firms isn’t far from the logic of the latest trade models. Economists, however, think that effect is good!

[HT: Mankiw]

The worst trade policy suggestion I have heard in a very long time:

Any company that wants to import goods into the United States would have to get a government certificate, under a plan to eliminate the nation’s trade deficit proposed by two Democratic senators Thursday, The New York Times reported Friday.

“We’re choking on trade debt and it is becoming a bigger and bigger danger to our country by the day,” Senator Byron L. Dorgan of North Dakota was quoted as saying. “We need a new strategy, and that is what we are proposing today.”…

Dorgan and Senator Russell D. Feingold of Wisconsin said the bill would create a market-based system to cut the trade deficit to zero within 10 years.

Under the measure, companies that export goods from the United States would be issued a certificate to import goods. The exporter could use the certificate or sell it to another company, the senators said.

The plan would be phased in over five years, with one dollar in exports earning 1.40 dollars in import certificates the first year, 1.30 dollars the second year, 1.20 dollars the third year and so on.

Wow. Wow. That’s all I can say. I’m floored.

[Hat tip to Sallie James.]

Joseph Stiglitz:

“Rich countries should simply open up their markets to poorer ones, without reciprocity.”

Josh Hendrickson:

A man such as Dr. Stiglitz should know better to make such a comment. A basic concept of economics is that in order for a transaction to take place, it must benefit each party. While I am certainly an advocate of free markets and free trade, this statement ignores important political and social factors associated with doing so and is strikingly idealistic.

If Mr. Hendrickson is an advocate of free trade, then he ought to recognize unilateral trade liberalization when it is proposed. Lower US trade barriers would benefit each party. Stiglitz’s proposal is idealistic because if the US was unwilling to make “concessions” at Doha, then it certainly won’t reverse course and make them unilaterally. But Hendrickson ought to support Stiglitz’s position if he believes in the classic case for free trade.

Since this post is the first google result for sugar protectionism, I’ll post a collection of better resources:

Mark Groombridge, “America’s Bittersweet Sugar Policy,” December 2001, PDF
Kim Elliott, “Big Sugar and the Political Economy of US Agricultural Policy,” April 2005, PDF
Jose Alvarez and Leo C. Polopolus, “The History of U.S. Sugar Protection,” June 2002, HTML
Omer Gokcekus, Justin Knowles and Edward Tower, “Sweetening the Pot: How American Sugar Buys Protection,” 2003, PDF

Please submit more links in the comments.

Thanks to Dan Ikenson’s latest Cato blog entry, I learned what “zeroing” is and why the WTO Appellate Body struck it down last week:

In determining margins of dumping (which dictate the prospective antidumping duties applied to affected imports), the Department of Commerce typically compares a foreign exporter’s U.S. and home market prices. There are usually dozens or hundreds (sometimes thousands) of comparisons made, each generating a margin of dumping, which can be positive, negative or zero.

Before averaging the individual dumping margins to produce an overall antidumping duty rate, the DOC perpetrates some sleight of hand by setting all of the negative dumping margins to zero. This, of course, has the effect of seriously inflating the overall rate and dissuading subsequent importation.

In one decade in the eighteenth century, according to the Swedish economist and historian Eli Heckscher in his book of 1932, Mercantilism, the French government sent tens of thousands of souls to the galleys and executed 16,000 (that’s about 4.4 people a day over the ten years…) for the hideous crime of importing printed calico cloth. [McCloskey]

Douglas A. Irwin is an outstanding trade scholar who consistently pursues interesting research questions. This article summarizes what he’s been doing lately.

[Hat tip: Ben Muse]

I don’t usually read the Huffington Post, but I stumbled across this post today while doing some research. In the midst of recommending appropriate caution about the US desire to include stringent intellectual property rules in upcoming preferential trade agreements with Malaysia, South Korea, and Thailand, James Love wrote this silly passage:

In the Korea negotiations one of the big demands by the US is to cut back the Korean “screen quotas,” that mandated theaters to show Korean movies at least 40 percent of the time (146 days per year). The US wants this cut back, so that Koreans will watch more Hollywood films. The creative community in Korean is highly mobilized in opposition to this, which they fear will devastate the Korean film industry. If the USTR “wins” this negotiation, it will reduce global cultural diversity.

Technically, “global cultural diversity” will be reduced if one defines that phrase to mean the supply of Korean films being shown in theaters, regardless of consumption. But more films that consumers actually want to see will be shown, so there will be a global cultural welfare gain. Moreover, if a culture’s existence depends upon governmental mandates impinging freedom of choice, why is it valuable?

Korean economist Kim Young-bong debunked the cultural protectionist argument a few years ago in the Joong Ang Daily. James Love ought to acquaint himself with the benefits of cultural hybridization through globalization rather than defending governmental discrimination.

Last week, the Financial Times opined:

Anti-dumping duties are designed to prevent predatory companies pricing goods lower abroad than at home. But rules defining dumping vary between countries and are hopelessly opaque.

In the EU – as with most members of the World Trade Organisation except the US – anti-dumping actions are a politicised process, and investigators are allowed considerable leeway in deciding how comparisons between export and domestic prices should be made. Thus authorities are susceptible to lobbying, and inefficient businesses in shrinking sectors such as shoe-making spend too much time begging governments to protect them from cheap imports rather than figuring out how to make themselves competitive.

If I were to write the FT a letter, it would say:

Sir,

Anti-dumping policy is a dangerous and frequently abused trade instrument. You were right to criticize the politicized processes that produce anti-dumping actions in most countries but erred in exempting the United States from your criticism (“Down in the dumps,” June 14). Anti-dumping policy in the US, as in other nations, is dominated by special interests and based on suspect calculations.

For a number of years, US law — the Byrd amendment — actively encouraged lobbyists to bring anti-dumping claims by awarding the tariff revenues to the companies that filed a complaint. It was the European Union, along with ten other nations, that brought a successful case against this measure at the WTO dispute settlement panel in 2002.

Despite that ruling, the Byrd amendment was not repealed by the US Congress until February 2006 and will remain in effect until September 2007. Anti-dumping actions are protectionist interventions, whether implemented by Asians, Europeans, or Americans. The United States should not be let off the hook.