America First, Trade Last? — 13 Obvious Observations.

    

                             

Here are 13 observations relevant to the current trade debate …… They indicate to me that Trump’s trade policies are already detrimental to the U.S. and does nothing to help us domestically or internationally.

  • Only 1% of U.S. companies export and not many government entities try to increase this.
  • Trade and tax policy in the U.S. does almost nothing to promote manufacturing exports.
  • Withdrawing from TPP, Nafta or the WTO won’t help increase U.S. exports but only worsen them as other countries take our current markets.
  • Trade agreements have opened a huge number of foreign markets to U.S. exporters.
  • Bilateral trade deficits as a concept doesn’t make any sense.
  • With the China’s WTO Accession Agreement the U.S. did not reduce one tariff. China reduced its tariff levels significantly.
  • Strategically, pulling out of TPP gave China a huge political and foreign policy victory in the largest markets in the world.
  • The WTO’s dispute resolution system has been a great success — the U.S. has won most of its cases it has filed. This has furthered the rules-based system of trade and international relations.
  • U.S. multinationals are doing well internationally and are keeping much of their profits offshore and untaxed by the U.S.
  • Repatriating offshore trillions of U.S. multinationals (mainly IT firms) won’t increase U.S. reinvestment but only increase shareholder dividends — this is what  happened last time there was an offshore tax holiday.
  • Unilateralism is not the way to go in the post-war international system which the Trump administration seems to disdain along with multilateral trade agreements and multilateral institutions. The world has rejected such actions and so has former U.S. administrations.
  • Sovereignty is not abrogated when we enter into mutually beneficial agreements and arrangements. Mutual consent is the basis of good treaty law and global governance.
  • The role of states such as New York, California and Virginia in promoting trade and foreign investment is increasingly important as the federal government is becoming more anti-trade and restrictive as to foreign investment.
………. “America First, International Trade Last.” Financial Times (Nov. 2, 2017).
……….”The Wrong Way to Think About Trade.” Wall Street Journal (Nov. 20, 2017).

 

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (School of Public Policy).
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