Once upon a time in America, tariff revenue funded the government. As the country industrialized, a laissez-faire economic model gave rise to concentrated economic power, concentrated political power, and the Gilded Age. It was an era of extreme inequality, of the Homestead Steel Strike, of the Triangle Shirtwaist Factory Fire. Robber barons like Andrew Carnegie…

For decades now, the conventional wisdom has led us to believe there is a tension between a progressive trade policy – one that focuses on values beyond returns to capital – and American foreign policy. This is a false tension, however. Far from impeding American foreign policy goals, a progressive trade policy advances them. FDR’s…

The Open Society Foundation has published a white paper on a new model for trade agreements. As OSF explains: Around the world, the process of economic globalization is under fire for serving the needs of corporate elites rather than ordinary citizens. But it is important to recall that trade does not have to aggravate inequality.…

In Globalists, Quinn Slobodian examines the relationship between the Austrian School of economics, influential in the first half of the 20th century, and the rules for the global economy. Members of the School opposed the Havana Charter. The Austrian School was not monolithic. Its members variously supported pure laissez-faire, government intervention in the marketplace, and support…

We think of Adam Smith as the father of free trade. Having coined the phrase “Invisible Hand,” he’s portrayed as something of a libertarian icon. But that’s a caricature of a man who had much more profound, and nuanced, views of political economy – and of the welfare of the working class.

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…

On June 30, 2020, the Senate Finance Trade Subcommittee held a hearing on Censorship as a Non-Tariff Barrier. It was a pleasure to testify. The hearing can be seen here, and my written testimony can be found here. My opening statement: My name is Beth Baltzan, and I am a fellow at the Open Markets…

At this point we’re all more aware of shortages relating to COVID-19 than we’d like to be. But still another shortage looms: food. Yet even as the specter of starvation emerges, farmers in the United States are plowing under their crops and dairy farmers are dumping their milk.  We are seeing deep failures in the ability of the…

Vice President Biden announced his intention to be one of the most progressive Presidents since FDR. What was FDR’s approach in the aftermath of the Depression? As the eponymous Roosevelt Institute has explained, “to restore the nation’s economic health FDR understood that he must do two things. First, re-establish the bond between the American people…

COVID-19 is exposing what many of us have known for a long time: our fealty to efficiency has left us dependent on a hostile authoritarian power for the supply of essentials, like medicines and medical equipment. TPP has been marketed for years as the antidote to the Chinese Communist Party’s mercantilist view of the world…

The trade establishment is looking for comfort as supply chain shocks upend confidence in the rules of the global trading system. They’re turning to the same playbook they used in the 1990s, arguing that tariffs, regulations, and export bans are the problem.   The supply chain shocks aren’t due to tariffs or regulations or export…

The question seems almost facile in a day and age when so many countries have so many trade agreements. But COVID-19 is leading to us to focus on aspects of globalization that have long been ignored. So let’s reevaluate the basics – like the purpose of these agreements. The Foreign Policy View The foreign policy…

We remember the Tariff Act of 1930 because it included the infamous Smoot-Hawley tariffs. But we should remember it for something much more important: it prohibited imports made with forced labor.  Back in the day, slave labor was seen principally as unfair competition, rather than as a matter of human rights. So the law included a “consumptive…

Trade agreements are supposed to be permanent because certainty promotes stability. Or so the thinking has been for the past few decades. The reaction when a sunset clause was included in the new NAFTA was almost uniformly one of horror: the instability of such a thing! The effects on investment! Trade flows! Peace! Prosperity! It’s…

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…

If you are struggling to understand the rise of economic populism in the United States, and the resulting chasm between populists and elites, then Matt Stoller’s new book Goliath will enlighten you. Goliath is focused on antitrust, but it tells a much broader story of the way the intelligentsia has been led, through a combination…

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.…

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…

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…