American Trade Politics in 2007: Building Bipartisan Compromise

The May 10, 2007, congressional-executive branch agreement, labeled "A New Trade Policy for America," establishes a bipartisan foundation of confidence and trust and provides new language for pending free trade agreements (FTAs). Most important is the accord on inclusion of core labor standards, a matter of sharp partisan division over the past decade. The new trade policy also includes a range of environmental provisions, a new balance between intellectual property rights and trading partners' health needs, provisions on post security and US investor rights, and a general "strategic worker assistance and training (SWAT) initiative." The agreement was reached after four months of negotiations between key House Democrats--with Representative Charles B. Rangel, chairman of the House Ways and Means Committee, in the lead--and US Trade Representative (USTR) Susan C. Schwab, with ranking Ways and Means Republican Jim McCrery engaged throughout. Rangel had decided early that bipartisan accord on trade was possible and staked his reputation on bringing it about, working carefully with colleagues of both parties, persisting when hopes receded. His wisdom in reaching out to McCrery was vindicated as the ranking Republican worked assiduously and effectively to find compromises on the toughest issues. USTR Schwab recognized early that trade policy needed a new bipartisan base and that Rangel offered the only realistic hope of achieving it. She showed flexibility in making necessary concessions early and persistence in concluding the agreement. The base in substantive understanding and trust that the accord builds will be helpful if and when Congress addresses broader issues like renewal of trade promotion authority (TPA), which is necessary for completion of the multilateral Doha Round. But TPA extension is unlikely to be enacted until there is sufficient progress in the Doha talks to make it worth the necessary investment of time and political capital by the administration, Congress, and private interests.

American Trade Politics 4th Edition

In this comprehensive revision of the most influential, widely read analysis of the US trade policymaking system, Destler addresses how globalization has reshaped trade politics, weakening traditional protectionism but intensifying concern about trade's societal impacts. Entirely new chapters treat the deepening of partisan divisions and the rise of "trade and . . ." issues (especially labor and the environment). The author concludes with a comprehensive economic and political strategy to cope with globalization and maximize its benefits. The original edition of American Trade Politics won the Gladys Kammerer Award of the American Political Science Association for the best book on US national policy.

The Trans-Pacific Partnership Agreement: Looking Ahead to the Next Steps

Pressure has been building for the conclusion of the 12-country Trans-Pacific Partnership (TPP) negotiations. Getting the deal done is important, but the TPP is not just another free trade agreement (FTA). It represents the chance to set a trade agenda for the future across a wide range of topics for countries throughout the Asia-Pacific region. This means that the agreement should not be settled in haste. More importantly, it also means that key decisions need to be reached about broader issues related to the institutional structure of the TPP. These decisions must be made now, before the deal is closed, on issues such as how to create the TPP as a living agreement, the formation of a TPP Secretariat, and the clarification of entry conditions for future members such as the People’s Republic of China (PRC). These choices must be made deliberately and carefully even while officials are struggling with reaching closure on the most highly sensitive issues still remaining in the agreement. It will not be easy, but wise decisions are necessary now to ensure the long-term success of the TPP

Americans on International Trade Policy

A policymaking simulation is an online process that puts citizens in the shoes of elected officials by simulating the process they go through in making policy decisions. Each simulation introduces a broader policy topic and then presents a series of modules that address a specific policy option that is currently under consideration in the current discourse. For each module, respondents: 1) receive a short briefing on a policy issue and the option or options for addressing it; 2) evaluate arguments for and against the policy options; and 3) finally, make their recommendation for what their elected officials should do.Promoting the Growth of Trade Through an International Rules-Based System: Respondents were introduced to the international system for promoting international trade—two-thirds said they were familiar with it. Evaluating arguments for and against continuing to seek to further the growth of international trade through international agreements, in most cases large majorities from both parties found both pro and con arguments convincing, with Democrats responding more to the pro arguments and Republicans responding more to the con arguments. Nonetheless, in the end an overwhelming bipartisan majority approved of United States, together with other countries, promoting international trade through a set of agreed-on rules that seek to lower barriers to trade and to ensure trade is done fairly. The World Trade Organization: A very large majority approved of the US continuing to be part of the World Trade Organization, though for Republicans this was only a modest majority, while Democrats approved overwhelmingly. MITIGATING THE NEGATIVE EFFECTS OF TRADE: Increasing Unemployment Benefits: As a means of addressing some of the negative effects of trade, a bipartisan majority favored increasing unemployment benefits, with a majority favoring increasing the amount from 39% to 50% of previous earnings. However, a bipartisan majority did not support increasing the maximum period of unemployment benefits beyond the current average of 26 weeks. Worker Retraining and Education: Presented several proposals for job training and education under consideration in Congress, very large bipartisan majorities favored proposals to increase spending on training for jobs in cybersecurity and the energy industry, and a proposal to provide employers a tax credit for apprenticeship programs. Trade Adjustment Assistance: A majority of six in ten favored expanding the Trade Adjustment Assistance program to more people who get laid off from their job directly because of an increase in trade, however six in ten Republicans were opposed. Just four in ten, but a modest majority of Democrats, favored extending such assistance to all people who get laid off from their job. Labor and Environment Standards in Trade Agreements: Overwhelming bipartisan majorities favored including in new international trade agreements the requirement that countries abide by both the labor and environmental standards they have committed to, that they do not lower their standards to attract business or to get a competitive edge, and that there is an effective system for enforcing these requirements. Impact of Mitigating Negative Effects on Attitudes About Trade: Respondents who disapproved of promoting greater trade through international agreements, while also favoring steps to mitigate the negative effects, were asked how they would feel about the promoting trade if the mitigating steps they favored were adopted. About half said that they would then favor promoting greater trade through international agreements. THE USE OF TARIFFS: Steel Tariffs: Voters divided sharply along party lines on the US administration invoking the national security exemption and imposing tariffs of 25% on steel imports and 10% on aluminum imports, with a large majority of Republicans approving and a large majority of Democrats disapproving. Overall, a very slight majority approved. Tariffs on China: Voters divided along party lines on whether the US should have imposed tariffs on China without first getting a WTO ruling. Going forward, a modest majority opposed imposing additional tariffs on China to get them to change their trade practices, but instead favored working through the WTO to get a ruling against China. Views on both issues are highly polarized along partisan lines with large majorities of Democrats favoring working through the WTO and large majorities of Republicans favoring imposing tariffs. North American Trade: NAFTA and the USMCA: Asked about the original North American Free Trade Agreement (NAFTA) agreement, a very large majority, including a majority of Republicans, expressed approval. Told about the proposed U.S.-Mexico-Canada Agreement (USMCA) agreement, a slight majority favored it, with large majority of Republicans in support and a modest majority of Democrats opposed. If Congress does not approve the USMCA deal, a large majority favors staying in NAFTA. Those who favored the new USMCA agreement and approved the steel and aluminum tariffs were asked whether they would be willing to lift the new steel and aluminum tariffs on imports from Canada and Mexico if it appears necessary to get an agreement on USMCA; most said they would

The political economy of trade and migration: evidence from the U.S. Congress

We systematically examine the drivers of U.S. congressmen's votes on trade and migration reforms since the 1970's. Standard trade theory suggests that reforms that lower barriers to goods and migrants should have similar distributional effects, hurting low-skilled U.S. workers while benefiting high-skilled workers. In line with this prediction, we find that House members representing more skilled labor abundant districts are more likely to support both trade and migration liberalization. Still, important differences exist: Democrats favor trade reforms less than Republicans, while the opposite is true for immigration reforms; welfare state considerations and network effects shape support for immigration, but not for trade

Rebalancing the US Economy in a Postcrisis World

The objective of this paper is to explore how the external balance of the United States (US) might evolve in future years as the economy emerges from the recession. We examine the issue from the domestic perspective of the saving and investment balance and from the external side in terms of the basic determinants of exports and imports and the role of the real exchange rate. Using these two respective perspectives, we highlight (1) causes and consequences of low private and public saving in the US, and (2) sensitivity of trade to variations in the real exchange rate. We highlight the need for sustained depreciation of the dollar to improve the competitiveness of US exports and argue that the current exchange rate is consistent with a significant reduction in the size of the trade deficit. However, the favorable external outlook is very inconsistent with a projected domestic situation of low rates of private saving and a very large public sector budget deficit matched by a cyclically depressed rate of investment. Changes in US corporate tax structure, reconsideration of capital controls, and perhaps some further decline in the level of real exchange rates could help soften the impact of a potentially very hard postrecession landing for the United States

DIPLOMACIA E POLÍTICA DOMÉSTICA: A LÓGICA DOS JOGOS DE DOIS NÍVEIS

A política doméstica e as relações internacionais com freqüência são inextricavelmente vinculadas; todavia,as teorias existentes (particularmente as estatocêntricas) não levam adequadamente em consideraçõestais vínculos. Quando os líderes nacionais devem obter as ratificações (formais ou informais) dos membrosde seus parlamentos para um acordo internacional, seus comportamentos em negociações refletem os imperativossimultâneos tanto de um jogo de política doméstica quanto de um jogo de política internacional.Usando exemplos de cúpulas econômicas ocidentais, das negociações do Canal do Panamá e do Tratado deVersalhes, dos programas de estabilização do Fundo Monetário Internacional, da Comunidade Européia ede muitos outros contextos diplomáticos, o artigo oferece uma teoria da ratificação. Ele enfatiza o papel daspreferências, coalizões, instituições e práticas domésticas, das estratégias e táticas dos negociadores, daincerteza, das reverberações domésticas das pressões externas e o papel dos interesses do negociador-chefe.Essa teoria de “jogos de dois níveis” também pode ser aplicável a muitos outros fenômenos políticos, taiscomo a dependência, os comitês legislativos e as coalizões multipartidárias

How Stable are Monetary Models of the Dollar-Euro Exchange Rate? A Time-Varying Coefficient Approach

This paper examines the significance of different fundamental regimes by applying various monetary models of the exchange rate to one of the politically most important exchange rates, the exchange rate of the US dollar vis-à-vis the euro (the DM). We use monthly data from 1975:01 to 2007:12. Applying a novel time-varying coefficient estimation approach, we come up with interesting properties of our empirical models. First, there is no stable long-run equilibrium relationship among fundamentals and exchange rates since the breakdown of BrettonWoods. Second, there are no recurring regimes, i.e. across different regimes either the coefficient values for the same fundamentals differ or the significance differs. Third, there is no regime in which no fundamentals enter. Fourth, the deviations resulting from the stepwise cointegrating relationship act as a significant error-correction mechanism. In other words, we are able to show that fundamentals play an important role in determining the exchange rate although their impact differs significantly across different subperiods