As the Trump Administration has recognized, trade involves a larger question consuming most countries: what kind of policy can make “it possible for most citizens, including those without college educations, to access the middle class through stable, well-paying jobs”? Trickle-Down Trade The Administration, however, can’t achieve this goal, because its trade policy is but an…

The House Ways and Means Committee held a hearing last Tuesday with two trade topics: the WTO Appellate Body and NAFTA 2.0.  The first half of the hearing was devoted to the Appellate Body, including both support for the U.S. government’s longstanding concerns over the flaws with the dispute settlement system, as well as a…

The hang-up over the new NAFTA comes down to labor enforcement.  This should be of no surprise to anyone who’s been paying attention. The United States has, for years, expressed concern over the historical alliance between Mexican government officials and business – including U.S. business – to frustrate labor rights. To be clear, suppressing labor…

The conventional wisdom on trade, which typically emanates from K Street, is generally long on being conventional, and short on being wise. Today’s version is the meme that Democratic demands on NAFTA 2.0 are just politickin’ to deny Trump a victory. How about a few facts, and then we can reevaluate that line of thinking.…

We’ve talked about one loophole in NAFTA called “de minimis.”  In addition to rules of origin that already allow a certain amount of content originating from outside the region, the original NAFTA contains a loophole that allows an extra 7% on top of it.  The Trump Administration, in a position completely at odds with its China…

The recent furor over the NBA, South Park, and the long arm of the Chinese Communist Party is giving the average American a much better understanding of Chinese government authoritarianism in action. Until now, the discussion about the relationship between China and the United States had been dominated by pearl-clutching over how much more dog…

Typically, trade agreement marketers rely on gains to GDP to explain why the agreements are worth doing. (Of course, in 2016 the U.S. International Trade Commission concluded that all these bilateral and regional trade agreements combined added a mere .2% per year to GDP.) Herein lies the conundrum: the existing NAFTA already provides duty-free treatment among…

On June 6, Inside Cybersecurity had a webinar of government and American industry voices to discuss Huawei, 5G, and cybersecurity.  The panelists’ main concern is the myriad ways hostile actors, including state actors, can exploit supply chains to engage in nefarious activities. Huawei, which has a prominent position in the race to 5G thanks to Chinese government…

Who said the following: many . . . have focused in particular on enforcement of labor and environmental provisions    . . . .   I am pleased that we obtained strong provisions in those areas, and I agree that they should be fully and effectively enforced so that our companies can compete based on…

In the last blog, we talked about the SOE chapter. It lays out some interesting rules on anticompetitive behavior; but those rules only apply to state-owned enterprises.  If the goal is to discipline state capitalism, that chapter won’t do it. But because it has such detailed rules on anticompetitive behavior, it is worth comparing to…

Much has been made of the TPP and NAFTA chapters on state-owned enterprises (SOEs).  They are supposed to be forward-looking provisions that will put a dent in state capitalism.  But the premise is wrong, and so the response is wrong. The premise of the argument is that state capitalism is executed through SOEs.  In some…

Donald Trump campaigned in part on the flaws in the auto rules of the Trans-Pacific Partnership. Much of his renegotiation of NAFTA has focused on tightening up those rules.  As this paper explains, he can rightly claim some credit for strengthening them. But there are nevertheless questions about whether those rules will work the way…

One of the goals of this blog has been to facilitate an understanding of the backlash against the global trading system.  That system is characterized by a broad set of rules that are complex — opaque, even — with which few are familiar, even many of those staunchly defending the status quo.  An improved understanding…

Although the Trump Administration is no friend of environmental groups, the current U.S. Trade Representative has, as we have noted before, enforced environmental provisions under the U.S-Peru trade agreement.  In that context, it is not as surprising as it might otherwise be that the NAFTA 2.0 environmental chapter contains new, positive provisions. However, on the whole,…

To those outside the trade world, it might seem like a foregone conclusion that the Trump Administration’s renegotiation of NAFTA would contain provisions hostile to, rather than supportive of, organized labor.  However, trade has been the anomaly in this Administration.  As we have pointed out before, the President has consistently borrowed Democratic talking points on…

NAFTA 2.0 includes what many consider a novel provision:  a sunset clause.  That is, the agreement will terminate in 16 years unless all three parties agree to extend it. When the United States first proposed the concept of a sunset for the agreement, the reaction was to treat it akin to heresy.  A disagreement between…

With the conclusion of the NAFTA renegotiation, the next step in the United States is Congressional consideration.  The assumption is that the agreement will be considered pursuant to Trade Promotion Authority (TPA), and there are some questions as to whether the Administration has complied with TPA.  For example, TPA requires consultations with members “upon request,”…

To situate the ongoing debate over trade, let’s take a look at some of the key takeaways from Judith Stein’s book Pivotal Decade: How the United States Traded Factories for Finance in the Seventies. Stein traces the evolution of American trade policy from Nixon to Clinton, and in particular she identifies choices that were made, across successive…

As the Trump Administration continues to borrow the Democratic message that globalization has left American manufacturing workers behind, some of our trade partners have chosen to retaliate by targeting American agricultural workers.  As we rightly focus on whether our farmers will be hurt, however, it is important to recall the degree to which our trade agreements…

Last month the Center for Automotive Research produced a briefing paper on the proposed changes to the NAFTA rules of origin.  An evaluation of that briefing paper can be found here.