Trade Agreements: Impact on the U.S. Economy

[Excerpt] The United States is in the process of considering a number of trade agreements. In addition, the 111th Congress may address the issue of trade promotion authority (TPA), which expired on July 1, 2007. These agreements range from bilateral trade agreements with countries that account for meager shares of U.S. trade to multilateral negotiations that could affect large numbers of U.S. workers and businesses. During this process, Congress likely will be presented with an array of data estimating the impact of trade agreements on the economy, or on a particular segment of the economy. An important policy tool that can assist Congress in assessing the value and the impact of trade agreements is represented by sophisticated models of the economy that are capable of simulating changes in economic conditions. These models are particularly helpful in estimating the effects of trade liberalization in such sectors as agriculture and manufacturing where the barriers to trade are identifiable and subject to some quantifiable estimation. Barriers to trade in services, however, are proving to be more difficult to identify and, therefore, to quantify in an economic model. In addition, the models are highly sensitive to the assumptions that are used to establish the parameters of the model and they are hampered by a serious lack of comprehensive data in the services sector. Nevertheless, the models do provide insight into the magnitude of the economic effects that may occur across economic sectors as a result of trade liberalization. These insights are especially helpful in identifying sectors expected to experience the greatest adjustment costs and, therefore, where opposition to trade agreements is likely to occur. This report examines the major features of economic models being used to estimate the effects of trade agreements. It assesses the strengths and weaknesses of the models as an aid in helping Congress evaluate the economic impact of trade agreements on the U.S. economy. In addition, this report identifies and assesses some of the assumptions used in the economic models and how these assumptions affect the data generated by the models. Finally, this report evaluates the implications for Congress of various options it may consider as it assesses trade agreements

Foreign Direct Investment in the United States: An Economic Analysis

[Excerpt] Foreign direct investment in the United States declined sharply after 2000, when a record $300 billion was invested in U.S. businesses and real estate. (Note: The United States defines foreign direct investment as the ownership or control, directly or indirectly, by one foreign person [individual, branch, partnership, association, government, etc.] of 10$236 billion in U.S. businesses and real estate. Foreign direct investments are highly sought after by many state and local governments that are struggling to create additional jobs in their localities. While some in Congress encourage such investment to offset the perceived negative economic effects of U.S. firms investing abroad, others are concerned about foreign acquisitions of U.S. firms that are considered essential to U.S. national and economic security

Codes of Conduct for Multinational Corporations: An Overview

The U.S. economy has grown increasingly interconnected with other economies around the world, a phenomenon often referred to as globalization. As U.S. businesses expand globally, however, various groups across the social and economic spectrum have expressed their concerns over the economic, social, and political impact of this activity. Over the past 20 years, multinational corporations and nations have adopted voluntary, legally enforceable, and industryspecific codes of conduct, often referred to broadly as corporate social responsibility (CSR), to address many of these concerns. Recent events, primarily the 2008-2009 financial crisis and related work by major international organizations, spurred Congress and governments in Europe to increase their regulation of financial firms. Indeed, the growing presence and influence of multinational corporations in the production of goods and services and in international trade through value chains has prodded governments to adopt measures that enhance the benefits of such activities through codes of conduct. Congress will continue playing a pivotal role in addressing the various issues regarding internationally applied corporate codes of conduct

A Note on the Energy Release Rate in Quasi-Static Elastic Crack Propagation

This paper considers analytical issues associated with the notion of the energy release rate in quasi-static elastic crack propagation

Neural Architectures for Control

The cerebellar model articulated controller (CMAC) neural architectures are shown to be viable for the purposes of real-time learning and control. Software tools for the exploration of CMAC performance are developed for three hardware platforms, the MacIntosh, the IBM PC, and the SUN workstation. All algorithm development was done using the C programming language. These software tools were then used to implement an adaptive critic neuro-control design that learns in real-time how to back up a trailer truck. The truck backer-upper experiment is a standard performance measure in the neural network literature, but previously the training of the controllers was done off-line. With the CMAC neural architectures, it was possible to train the neuro-controllers on-line in real-time on a MS-DOS PC 386. CMAC neural architectures are also used in conjunction with a hierarchical planning approach to find collision-free paths over 2-D analog valued obstacle fields. The method constructs a coarse resolution version of the original problem and then finds the corresponding coarse optimal path using multipass dynamic programming. CMAC artificial neural architectures are used to estimate the analog transition costs that dynamic programming requires. The CMAC architectures are trained in real-time for each obstacle field presented. The coarse optimal path is then used as a baseline for the construction of a fine scale optimal path through the original obstacle array. These results are a very good indication of the potential power of the neural architectures in control design. In order to reach as wide an audience as possible, we have run a seminar on neuro-control that has met once per week since 20 May 1991. This seminar has thoroughly discussed the CMAC architecture, relevant portions of classical control, back propagation through time, and adaptive critic designs

On shock waves in solids

This paper describes some recent theoretical results pertaining to the experimentally-observed relation between the speed of a shock wave in a solid and the particle velocity immediately behind the shock. The new feature in the present analysis is the assumption that compressive strains are limited by a materially-determined critical value, and that the internal energy density characterizing the material is unbounded as this critical strain is approached. It is shown that, with this assumption in force, the theoretical relation between shock speed and particle velocity is consistent with many experimental observations in the sense that it is asymptotically linear for strong shocks of the kind often arising in the laboratory

Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data

The impact of foreign direct investment on U.S. employment continues to attract national attention. While local communities compete with one another for investment projects, many of the residents of those communities fear losing their jobs as U.S. companies seek out foreign locations and foreign workers to perform work that traditionally has been done in the United States, generally referred to as outsourcing. Some observers suggest that current U.S. experiences with outsourcing are different from those that have preceded them and that this merits legislative actions by Congress to blunt the economic impact of these activities. Other observers argue that investing abroad by U.S. multinational companies impedes the growth of new jobs in the economy and thwarts the nation’s investments in high technology sectors. Some opponents also argue that mid-career workers who lose good-paying manufacturing and service-sector jobs likely will never recover their standard of living. Economists and others generally argue that free and unimpeded international flows of capital ultimately have a positive impact on both domestic and foreign economies. Direct investment is unique among international capital flows because it adds permanently to the capital stock and skill set of a nation, but it also challenges the general theory of capital flows because of the presence of strong cross-border and intra-industry investment. Supporters contend that to the extent that foreign investment shifts jobs abroad, it is a minor component of the overall economic picture and that it is offset somewhat by the investment of foreign firms in the U.S. economy (referred to as insourcing), which supports existing jobs and creates new jobs in the economy. Broad, comprehensive data on U.S. multinational companies generally lag behind current events by two years and were not developed to address the issue of jobs outsourcing. Many economists argue, however, that there is little evidence to date to support the notion that the overseas investment activities of U.S. multinational companies play a significant role in the rate at which jobs are created in the U.S. economy. Instead, they argue that the source of job creation in the economy is rooted in the combination of macroeconomic policies the nation has chosen, the rate of productivity growth, and the availability of resources. This report addresses these issues by analyzing the extent of direct investment into and out of the economy, the role such investment plays in U.S. trade, jobs, and production, and the relationship between direct investment and the broader economic changes that are occurring in the U.S. economy

Antidumping, Constructed Value, and Non-countervailable Subsidies: A Proposed Inclusion of Subsidies After Al Tech Specialty Steel Corp. v. United States

Part I discusses the antidumping law in the context of subsidy inclusion in constructed value calculations. Part II outlines the CIT\u27s exclusion of subsidies from the cost component of constructed value in light of the court\u27s policy rationales, and its interpretation of legislative, judicial, and administrative authority. Part III suggests that when a subsidy that benefits production is not countervailable, such as a subsidy that is generally available, the policy of remedying the unfair advantage created by the subsidy outweighs the CIT\u27s policy concern\u27s in Al Tech Specialty

The United States as a Net Debtor Nation: Overview of the International Investment Position

The international investment position of the United States is an annual measure of the assets Americans own abroad and the assets foreigners own in the United States. The net position, or the difference between the two, sometimes is referred to as a measure of U.S. international indebtedness. This designation is not strictly correct, because the net international investment position reveals the difference between the total assets Americans own abroad and the total amount of assets foreigners own in the United States. These assets generate flows of capital into and out of the economy that have important implications for the value of the dollar in international exchange markets. Some Members of Congress and some in the public have expressed concerns about the U.S. net international investment position because of the role foreign investors are playing in U.S. capital markets and the potential for large outflows of income and services payments. Some observers also argue that the U.S. reliance on foreign capital inflows places the economy in a vulnerable position