Guest Blog: The Australian View of the TPP and the RCEP›By Andrew Stoler // Monday, July 21, 2014
You can find a lot of Aussies these days that think the country has to choose between its largest trading partner (China) and long-time security alliance with the United States. Those (a majority) who don’t share this view see the Trans-Pacific Partnership (TPP) negotiations as not only an important exercise that will set the framework for economic relations in the region for the 21st Century but also as a key part of the American “pivot” to Asia that at the same time enhances China’s integration in the Asia-Pacific. On this last point, the Australian view tends to support Chinese participation in the TPP as soon as possible. Judged against expectations for the TPP, the ASEAN + 6 Regional Comprehensive Economic Partnership (RCEP) project is at most a third– or fourth- best fallback option.MORE
Can Regional Connectivity Promote Development Along the New Silk Road?›By Bill Krist // Monday, July 14, 2014
1000 and 2000 years ago countries along the Silk Road prospered enormously from the trade that passed through on its way between China, Europe and North Africa. Today, however, trade along this historic route has largely dried up as important countries including India, Pakistan and Afghanistan, have many barriers to block inter-country trade.
While there were several routes, much of the trade traveled through the area that today is Pakistan, Afghanistan, Tajikistan, Uzbekistan, Turkmenistan, Kazakhstan and Kyrgyzstan. Today, however, intra-regional trade between these countries accounts for just 6.2 percent of the total global trade of these nations.
The U.S., of course, has a special interest in helping Afghanistan develop economically so that it can be a future partner and never again provide a safe haven for Al Qaida. To promote economic development in this critical region, the U.S. is promoting a “New Silk Road” initiative focused on regional connectivity between Central Asia and South Asia, which will heavily involve Afghanistan.MORE
Guest Blog: Ex-Im Bank Reauthorization: Same Ol’ Criticisms Neglect Bank’s Economic Value›By Bill Reinsch // Tuesday, July 8, 2014
The current fight over reauthorizing the Export-Import Bank (Ex-Im Bank) is like déjà vu all over again – the return of a bizarre ideological debate that has been going on for at least the 40 years I’ve been working on the issue and most likely long before that – over the proper role of government in the economy. While that is a legitimate debate, applying it to the Bank in particular reflects an extraordinary level of ignorance about how the modern global economy works and where U.S. interests in that economy lie. Those of us who support the Ex-Im Bank frequently feel like we’re debating the Flat Earth Society, so profound is their refusal to acknowledge economic reality.
We live in a viciously competitive world, where it is common for governments to take extreme steps to support their industries and service providers, including subsidies, discriminatory rules and regulations, and outright protectionism. We have some rules for this game, both in the WTO and, when it comes to export finance, the OECD, but not everyone adheres to them, and they are not, in any event, air tight.MORE
MFN vs. PTAs: What’s the Way Forward?›By Bill Krist // Tuesday, July 1, 2014
One of the most fundamental rules of the original General Agreement on Tariffs and Trade (GATT) was that trade would be conducted on a most-favored nation (MFN) basis, that is that members of the GATT would treat all other members equally. This rule was carried over when the GATT morphed into the World Trade Organization (WTO) in 1994.
The founders of the postwar trade architecture had a number of important reasons for making MFN a pillar of the trade system. Today, however, preferential trade arrangements (PTAs) are proliferating, so much so that MFN is almost the exception, not the rule.
Why is MFN preferable to preferential trade arrangements? And how can we restore this vital principle?MORE
Guest Blog: Growing Impact of International Automakers on the U.S. Economy›By John Bozzella // Monday, June 23, 2014
I recently joined the Association of Global Automakers as president and CEO. While I have worked in the auto industry for many years, each day I continue to be amazed by the evolution of the American car industry. Today, international automakers account for 45 percent of U.S. auto manufacturing and 59 percent of U.S. auto sales.
Recently, we partnered with the American International Automobile Dealers Association and released a report, Redefining the American Auto Industry, highlighting the significant contributions international automakers made to the American economy in 2013. With increased investment and operations, these manufacturers and dealers are reshaping the American auto industry and redefining the meaning of an American car.MORE
Did the Smoot-Hawley Tariff Cause the Great Depression?›By Bill Krist // Monday, June 16, 2014
Eighty four years ago on this day President Hoover signed the now-infamous Smoot-Hawley tariff bill, which substantially raised U.S. tariffs on some 890 products. Other countries retaliated and world trade shrank enormously; by the end of 1934 world trade had plummeted some 66 percent from the 1929 level.
The Tariff Act of 1930 (aka the Smoot-Hawley Tariff Act), started out as a bill that would only raise tariffs on some agricultural products, but a host of other special interests piled on and before the legislation finally reached President Hoover’s desk it represented one of the largest tariff increases in U.S. history.
On June 16, 1930 when the Smoot-Hawley bill was signed into law the broad economy was just starting to slip into the Great Depression. Two years later unemployment had reached almost 24 percent in the U.S., more than 5000 banks had failed, and hundreds of thousands were homeless and living in shanty towns called “Hoovervilles”. Our economic woes spread around the world, although other countries weren’t hit as hard; while our unemployment rate increased some 600%, unemployment in Great Britain rose some 130% and over 200% in France and Germany.
Did the Smoot-Hawley tariff act cause the Great Depression?MORE
Regulatory Convergence in the TTIP: Facilitating Trade and Cooperation in the Transatlantic Region›By Samuel Benka // Tuesday, June 10, 2014
The prospect of regulatory convergence between the U.S. and EU has become a hot topic in the current Transatlantic Trade and Investment Partnership negotiations. While trade agreements traditionally have dealt mostly with lowering tariffs, provisions on regulatory cooperation are a new addition to trade agreements with the TTIP going beyond what any previous agreement has ever attempted to accomplish.
Regulatory convergence seeks to address non-tariff barriers (NTBs) to trade. The horizontal chapter in the TTIP on regulatory convergence is the most ambitious ever proposed in a free trade agreement aiming to reduce these NTBs. Some of the most promising areas where regulatory cooperation can lead to substantial gains are in the auto safety, chemicals, and pharmaceuticals fields.MORE
World Trade Rules on Agriculture and Disputes with Japan and Europe›By Bill Krist // Tuesday, June 3, 2014
Ambassador Clayton Yeutter has played a critical role in shaping the world’s trade rules and has been involved in some of the most important trade issues of recent decades. His experiences provide valuable insights to trade negotiators today and to anyone who wants to understand the trade system and how it evolved. The bloggers interviewed Ambassador Yeutter on May 21, 2014.
Bloggers: You served as the U.S. Trade Representative (USTR) from 1985 to 1989 under President Reagan. That was one of the most critical times in U.S. trade policy and what happened then has had an enormous impact on the trade system and the U.S. economy. Let’s start with the semiconductor dispute with Japan. What happened there?MORE
The European Elections and the EU-US Trade Pact: Is TTIP in Trouble?›By Michael J. Geary // Tuesday, May 27, 2014
With most of the votes counted in the 2014 European Parliament (EP) elections, held every 5 years in the EU’s 28 member states, one thing is clear: the next parliament will contain an eclectic bunch of parliamentarians (MEPs). The center right European People’s Party (EPP) won 212 seats while the center left Socialists and Democrats (S&D) secured 186 seats out of a total of 751. There is already speculation that these main blocs will form a grand centrist coalition to push forward tdhe EU’s integrationist agenda.
Like the U.S. Congress, the European Parliament must approve any trade agreement for it to take effect, so these elections are important. What do these results mean for the future policy direction of the EU over the next 5 years and, in particular, for the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations between the EU and the United States?MORE
Can Trade Keep Japan and China from Going to War?›By Bill Krist // Wednesday, May 21, 2014
Trade experts often argue that countries that trade together are unlikely to go to war. The rationale for forming the European Economic Community after World War II was that if Germany and France traded with one another they would not again plunge the world into war, and so far that has worked.
Today Japan and China are in a tense standoff over some barren islands in the East China Sea. Eric Posner says “If World War III takes place anytime soon, this is where it will start.” But Japan and China are joined at the hip economically. Are trade experts right? Will this interdependence prevent war?MORE
About The Book
What We’re Tweeting
- Guest Blog: The Australian View of the TPP and the RCEP
- Can Regional Connectivity Promote Development Along the New Silk Road?
- Guest Blog: Ex-Im Bank Reauthorization: Same Ol’ Criticisms Neglect Bank’s Economic Value
- MFN vs. PTAs: What’s the Way Forward?
- Guest Blog: Growing Impact of International Automakers on the U.S. Economy