Rethinking Trade Policy — Neoliberalism’s Shortcomings and Rethinking Globalization..

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      Another recent article lambasting the impact of neoliberalism on globalization and the critical need to rethink trade policy. I agree with most of the points made in the recent article in the New York Times. We have many more issues to think about today than just economic efficiency and cheap imports. Such as national security, data protection, effective global taxation, sustainable supply chains, domestic employment. All without spurring a 1930’s protectionism.

     This is the challenge in formulating trade policy today. Involving both new national laws and the role of the WTO and other international institutions. Especially those that formulate new rules and juridical dispute settlement.

     The Trump administration started to attack the global trading system with tariffs and insults toward the WTO and others. The Biden administration has continued this attack in a somewhat less hysterical manner and supporting legislation codifying various measures impacting industrial policy.     

   Here are a few excerpts from this morning’s article:


  • Global institutions like the International Monetary Fund and the World Bank and later organizations like the World Trade Organization — groups that were essentially about connecting global finance, trade and business across borders — were influenced by neoliberal philosophies. 
  • They vigorously advocated the Washington Consensus, a series of economic principles derived from the tent poles of market liberalization and unfettered globalization. 
  • The Reagan-Thatcher revolution unleashed global capital by deregulating the financial industry, and global trade was fully unleashed during the Clinton era, with deals like NAFTA and the eventual accession of China into the W.T.O., which tipped the balance of policy interests between domestic job creation and global market integration toward the latter. 
  • The neoliberal philosophy is tapped out not only in the United States but also abroad — witness the backlash in Britain to Prime Minister Liz Truss’s ill-fated experimentation with trickle-down tax cuts. 
  • And complex supply chains resulted in any number of production disasters well before the global crises of the past few years. 
  • Meanwhile, free trade itself, which was supposed to foster peace between nations, became a system to be gamed by mercantilist nations and state-run autocracies, resulting in deep political divides at home and abroad.  
  • Trade policy is shifting to better consider labor and environmental standards, with an understanding that cheap isn’t always cheap if products are degrading the environment or being made with a child’s tiny hands. 
  • There’s also a rethink of trade in digital services to account for privacy and liberal values. 
  • So what now? How can we make sure that economic globalization doesn’t again run too far ahead of national politics? And how can we fix things in a way that doesn’t result in 1930s-style protectionism or a false fit of nostalgia for a bygone era? 
  • It’s up to those who care about liberal democracy to craft a new system that better balances local and global interests.

                   “Globalism Failed to Deliver the Economy We Need.” (October 23, 2022).


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Is Nationalism Perverting Globalization? Yes. But in a Good Way.

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    Global trade relations are changing today. The rise of nationalism, more focus on national interest, and national security has redirected globalization from a stringent focus on economic efficiency to local concerns and domestic welfare. To me this is a redirecting of neoliberalism’s emphasis sole focus on efficient global transactions to a broader focus on the impact of global business on the local level — the domestic national level.

   This is not a rejection of all global transactions or globalization but a call for a more balanced connection between local (national) needs and those of a globalized economy. A good piece in today’s Financial Times discusses many of these points. Here are some of those points made in that article.


  • Today, it’s quite clear that the pendulum of history is swinging away from global economic integration. 
  • Today, we are entering a new era of localization. That doesn’t mean that all things global will fade. Quite the contrary — business, policymakers and society as a whole need a bit more focus on the local to ensure continued buy-in for globalisation. 
  • There will also be a rethink of trade rules, labor rights, and how to figure both the costs, as well as the benefits, of economic growth into the data that policymakers use to shape our world. 
  • But both parties now appreciate that place matters. After decades of a “winner take all” trend, in which the majority of prosperity has been located in a handful of cities and companies, look for business and policymakers to be more focused on ensuring that wealth and place are re-moored.  
  • This will come with costs — such as inflation. The old “efficiency” models, which assumed that people, goods and capital would move seamlessly to wherever they were needed, were cheap. Creating more opportunity at home, while still remaining connected to the global economy, will require building more resilient models. 
  • We have to start thinking outside the black box of conventional economics and look at the world in a more realistic and holistic way, tapping into other disciplines such as law and business. 
  • While Adam Smith, the father of modern capitalism, held that in order for free markets to function properly, participants needed to have a shared moral framework, the global economy today is made up of a huge number of nations with extremely different values and political systems. 
  • Ironically, the shift towards global market interests has led to exactly the kind of nationalism that the creators of institutions such as the IMF, the World Bank, and the World Trade Organization wanted to avoid. 
  • Restoring liberty meant restoring a decentralized economy that bred independent citizens and enabled local communities to be masters of their destiny, rather than victims of economic forces beyond their control. 
  • This sums up not only the founding principal of the country, but the core challenge of the new era — how to reconnect global markets and the value created within them to nation states. 

                       “Guide to a Deglobalizing World.” (10.21.22).


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Is Geopolitics Changing Trade Policy Today? — Yes, Absolutely (More from Business to National Interest Concerns).

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      Excellent piece in this morning’s Financia Times discussing trade policy and geopolitics, neoliberal globalism and global inequality, and global trade and peace. Here are some excerpts also discussing the WTO, China, and worker-based trade policies. I’m particularly interested in the rise of geopolitics and the role of law (and values) in global trade relations today.


  • The fact that both Republicans and Democrats are rethinking trade policy says something important about our geopolitics.


  • The idea that trade was primarily a pathway to global peace and unity, rather than a necessary way of balancing both domestic and global concerns, is over. We are entering a new era, in which concepts such as Francis Fukuyama’s “end of history” or Thomas Friedman’s “Golden Arches” theory are no longer relevant.



  • Workers in our democracies have long understood that global trade without values-based rules to govern it made our people poorer and our countries more vulnerable. They have long known that it enriched the plutocrats, but not the people.


  • Our system of neoliberal globalisation has created more wealth at a global scale over the past half-century than ever before. But there has also been huge growth in inequality within many countries.


  • And there is research to show that the entities that have benefited most from the past several decades of globalisation have been multinational companies and the Chinese state — or more particularly, the people running them. Autocrats have done well too, often by using trade and commerce as weapons in geopolitical conflicts.



  • And the west is certainly guilty of its own historical mercantilism and transnationalism. I’ve always thought that America’s embrace of China’s entry into the WTO had more to do with US corporate lobbying than any real belief in the possibility of political change.


  • The point here is that the current system of economic globalisation isn’t going to magically dissolve political differences. We are heading towards a new, post-neoliberal paradigm in which values, rather than just “everyday low prices” as the Walmart retail slogan goes, become a more important consideration in economic policy decisions. 

            “Free Trade Has Not Made Us Free.” (Oct. 2022)

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End OPEC Antitrust Immunity under the Foreign Sovereign Immunities Act? — Yes, Absolutely.

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Antitrust immunity for OPEC and its members has been upheld under old case law for decades. This is very unfortunate.

There is no reason that such immunity ought to be extended to OPEC members in this century. Especially, when those actions imperil U.S. foreign policy, U.S national security interests, the U.S. domestic economy and the global economy.

The Foreign Sovereign Immunities Act (FSIA), enacted in 1976, and amended numerous times, allow actions against a foreign state on various grounds. Those include a state-supporter-of terrorism and more generally for international terrorism or tortious acts.  I would argue that the raising or oil prices by Saudi Arabia falls within these categories. In the sense that they support Russia’s unlawful and terroristic war crimes in Ukraine. (This State Dept. should consider declaring Saudi Arabia a state-supporter-of-terrorism).

It is also very clear to me that OPEC nations actions fall within the more traditional category of price-fixing. We have held foreign corporations in criminal and civil actions responsible and liable for such extraterritorial, predatory actions as long as they have an impact in the United States. Of course, we also hold foreign states liable under the Foreign Sovereign Immunities Act for participating in commercial transactions and their tortious actions. 

It is about time the Biden administration should consider submitting executive suggestions to federal courts when necessary, indicating that they should not find immunity to foreign states for their predatory actions.

Global commerce and geopolitics have come a long way from when the United States initially moved away from the notion of absolute sovereign immunity in the 1950s. When it adopted the restrictive approach to sovereign immunity in the Tate Letter of 1954, in the FSIA of 1976, and various amendments to the FSIA since then.

The newer and broader view of antitrust by the Biden administration, favored now by the FTC and the U.S. Dept. of  Justice under President Biden, should embrace a more updated and aggressive view of U.S. international antitrust law and greater restrictions on sovereign immunity generally in order to support the U.S. national interest, including the welfare of U.S. consumers and workers.  

There is no foreign policy reason why private actions or those by the Dept. of Justice should be barred by an atavistic view of governments participating in the global marketplace. A more robust implementation of or economic legislation can help implement our foreign policy. A more updated view would also help protect U.S. consumers and the U.S. economy in this tricky decade.

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Are Export Controls the New Foreign Policy? Indeed, Are National Security Concerns Now Central to U.S. Trade Policy?

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Good opinion piece by Thomas Friedman argues we are now taking on China and Russia and export controls is the critical instrument the U.S. is utilizing.  And this new American foreign policy and national security strategy is focusing on semiconductor chips. In particular, he discusses the new set of export regulations that clearly targets China. Biden’s new annual national security strategy report released last weel clearly targets both China and Russia.

So, the question I have is the following: Are export controls the new foreign policy?  Yes, in part. They are clearly coming into their own as central to implementing U.S. national interests and national security goals in a new era of global politics – where both China and Russia are the major concerns. Robust implementation of our trade laws generally is necessary to implement our foreign policy.  Indeed, changes to CFIUS focusing on China, the recent adoption of computer chip subsidies, and tax credits for e-cars clearly indicate that a broader security – related trade strategy has become a central focus of U.S. foreign policy. (My concern now is how consistent are some of these policies with our obligations under the WTO as well as do they risk political and trade retaliation?)

“Thomas Friedman — China and Russia. (Oct. 12, 2002).

National Security Strategy Report. (Oct. 2022).

How U.S. is Choking off China from Technology.” (Oct. 14, 2022).

Trade has Become a Weapon.” (Oct. 14, 2022).

Biden’s Trade Assault on China.” (Oct. 20, 2022).


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The New “Economic Patriotism” in U.S. Trade Policy.

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Trump’s toxic trade policies are well and alive.  They are being furthered by Biden’s policies today, especially those now pushing industrial promotion in the name of national security and “economic patriotism.” The role of the Department of Commerce and CFIUS have become much more important during the Biden administration.

The dynamics of globalization have changed over the last twenty years and the geopolitical landscape has dramatically evolved.  We do need a rebalancing of domestic / national security needs, especially those emerging since the global Covid pandemic, with the dynamic growth factors of global commerce. This includes assessing more carefully the inflationary impact of the U.S. dollar valuation on its exports.

However, many of the recent U.S. trade and investment policy responses have not been thought through sufficiently. Countries are already talking about protesting these protectionist policies by the Biden administration as being in violation of WTO trade rules and subject to WTO litigation. We’ll see.

Here are a few recent articles discussing the above.


“Investors are learning to Love Industry Again.” Financial Times (Oct. 3, 2022).

U.S. Said to Plan New Limits on Tech Sent to Chinese.” Wall Street Journal (Oct. 4, 2022).

“Recent Legislation Expands Role of Government in Private Markets.” Wall Street Journal (August 13, 2022).

“GOP Needs to Leave Trump Behind on Trade.” Wall Street Journal (Oct. 3, 2022).

Raimondo Drives Industrial Policy.” Wall Street Journal (Sept. 6, 2022).

Post-Neoliberal Era Brings New Business Rules.” Financial Times (October 10, 2022).

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Foreign Investment in Virginia — Why the Low ranking?

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The inaugural special report on foreign investment in the U.S. by the Financial Times has just been released. Ranks the top cities.  None are in Virginia. Six are in North Carolina. Seems to be a wakeup call for Virginia. The methodology focuses on workforce and talent, business environment, quality of life and openness. I am surprised about the absence of Virginia from this important ranking. 

“The Best Cities for Foreign Invesment.” Financial Times (October 5, 2022).


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U.S. Trade Policy (Biden and Trump) — Harmful and Back to the Future?

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Trump’s toxic trade policies are well and alive.  They are being furthered by Biden’s policies today, especially those now pushing industrial promotion in the name of national security and “economic patriotism.” The role of the Department of Commerce and CFIUS have become much more important during the Biden administration.

Recent U.S legislation expands support for semiconductors, restricts U.S. sales of chips to China, and further tightens both outward U.S. investment and inward investment into the U.S.

Yes, the dynamics of globalization have changed over the last twenty years and the geopolitical landscape has dramatically evolved.  We do need a rebalancing of domestic / national security needs, especially those emerging since the global Covid pandemic, with the dynamic growth factors of global commerce. This includes assessing more carefully the inflationary impact of the U.S. dollar valuation on its exports.

However, many of the recent U.S. trade and investment policy responses have not been thought through sufficiently. 

Some U.S. policies today echo those of the 1930’s and are disturbing. There is a sentiment today in the United States that is somewhat similar to the fearful and protectionist ones held by many in the 1980’s toward ‘Japan Inc. ‘ This is clearly an unfortunate throwback.

Countries are already talking about protesting these protectionist policies by the Biden administration as being in violation of WTO trade rules and subject to WTO litigation. We’ll see.

Here are a few recent articles discussing the above.


“Investors are learning to Love Industry Again.” Financial Times (Oct. 3, 2022).

U.S. Said to Plan New Limits on Tech Sent to Chinese.Wall Street Journal (Oct. 4, 2022).

“Recent Legislation Expands Role of Government in Private Markets.” Wall Street Journal (August 13, 2022).

“GOP Needs to Leave Trump Behind on Trade.” Wall Street Journal (Oct. 3, 2022).

Raimondo Drives Industrial Policy.” Wall Street Journal (Sept. 6, 2022).

Post-Neoliberal Era Brings New Business Rules.Financial Times (October 10, 2022).


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What is the Growing Role of States in U.S. Foreign Policy and Global Trade? — Federalism Really Important.

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The role of states in U.S. foreign policy has often been overlooked generally and especially in international trade relations. A new article in Foreign Affairs discusses the role of states within today’s political reality. I’ve always believed this is an over-looked topic. States have often been active in promoting international trade given the federal government’s inaction. This new article offers a number of interesting observations. While not agreeing with all of them I do think it’s useful to provide some excepts.

  • According to the most common understanding of the federal system—the U.S. government is the country’s preeminent source of policy direction and bears sole responsibility for foreign affairs. Together with lawmakers in Congress, the president and senior executive branch officials are viewed as the key agenda-setters on U.S. leadership and how it is exercised in a tumultuous world.
  • By outward appearance, the expansion of federal powers in the twentieth century has given Washington the advantage in the federal-state balance.
  • And thanks to their sizable economies, the largest states can make decisions that have an impact beyond their own borders. All this has meant that the federal system is far more adaptable, and states far more powerful, than has generally been recognized.
  • But states do more than test new policy; they also fill in existing policy gaps when the federal government stalls.
  • Despite their growing role in domestic policy, states may appear to have little sway in foreign affairs, where nation-to-nation diplomacy and hard power reign supreme.
  • As states assert their interests even more actively in the coming years, they will have a variety of tools to choose from. For one thing, they can count on broad public support.
  • The growing power of states is already reshaping U.S. foreign policy. As states experiment with policies that the rest of the country isn’t ready to support, they can exert an immediate impact abroad: California’s zero emission vehicle policy, for example, was a blueprint for a similar scheme in China.
  • The potential for state-led action is large. Already, states have pledged adherence to international climate change treaty provisions and are forming agreements with foreign governments to achieve sustainability goals.
  • States seem likely to take the lead include supply chain resilience and industrial policy coordination; regional trading arrangements; long-term research and development partnerships; international standard setting, as, for example, in environmental regulations; and new forms of international diplomacy.
  • Foreign governments can strengthen their long-term relationships with the United States, regardless of who is in power in Washington, by building ties with individual states and their dependent cities.
  • Leaders in major states should also plan for the possibility of severe or prolonged federal dysfunction.
  • At its best, the constant interplay between the states and the federal government can provide a powerful strategic advantage to the United States. States can contribute to continued U.S. leadership on the most vital international policy challenges of our time, as well as ensure the resilience of the U.S. system, helping to preserve and defend democratic institutions and practices.
  • What no one should ignore is that U.S. states have the power as well as the motivation to both challenge Washington and shape the global policy agenda. State policymakers and leaders of countries large and small must consider the United States a vast entity with presumed national interests but also as an archipelago of powerful, competing jurisdictions, with certain shared ties, as well as an array of divergent interests and values.

      “Federalism and Foreign Policy.” FOREIGN AFFAIRS (Sept. – Oct. 2022).


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State Funding of International Trade for State Economic Development — Very Critical, Especially Now.


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This piece was published by me and John Milliken earlier this year. I thought it would be worthwhile to emphasize the continuing necessity to fund the international trade activities of the Commonwealth of Virginia. Being global is critical for doing well economically. State activities are essential to promoting international transactions and state economic development, especially in this volatile and very uncertain economic environment.


Five times since 2007, including the past two in which it published its survey, CNBC has ranked Virginia the best state in which to do business. Kudos in particular go to our educational system and workforce, according to the network. And we must keep investing in both.

But to make Virginia even more attractive to companies seeking to establish or to expand, we must start with sites.

In recent years, Virginia has lost out on an estimated $55 billion in capital-investment projects, more than $235 million in potential state revenue and nearly 40,000 direct jobs because we lacked shovel-ready sites or existing buildings.

That is a major problem, when consultants seek locations where construction can be completed in 12 to 18 months.

It’s not that we do not have options. In 2019, the Virginia Economic Development Partnership and a trio of top engineering firms identified and analyzed over 450 development sites for cost, technical feasibility, available workforce and other key factors. Virginia is believed to have the best site-intelligence of any state now, but not the money to prep them for businesses eager to set up shop.

To those of us who live in densely populated Northern Virginia, it is hard to imagine large, undeveloped land areas. But others in the commonwealth have them. We have a Virginia Business Ready Sites Program (VBRS) that simply awaits funds to stand up a handful of megasites and 10 to 20 midsize ones, with 50,000 new direct and indirect jobs in the offing.

Other states, including Georgia and North Carolina, are not waiting for Virginia and have appropriated funds for this purpose. If our Southern neighbors can step up to the plate, surely Virginia, where firms already want to locate because we are “the best to do business,” should, too.

Fortunately, Gov. Northam included $150 million in his final budget proposal for VBRS. The legislature should adopt that recommendation.

With 95 percent of the world’s population and 76 percent of the planet’s gross domestic product outside the U.S., the commonwealth – with its state-of-the-art marine terminals and deep-harbor channels – is best positioned for global trade. Norfolk International Terminal (NIT) and Virginia International Gateway are modern, state-of-the-art facilities and together make Virginia the fifth largest container port in the country, and one without supply-chain backups. Offshore wind interests are leasing land at the state-owned, but long vacant, Portsmouth Marine Terminal. More supply-chain firms are on the way to service Dominion Energy’s Coastal Virginia Offshore Wind project off Virginia Beach and others along the East Coast.

Many nations are looking to America to manufacture goods, including ones that the pandemic has highlighted, like pharmaceuticals, PPE, medical devices and supplies, in addition to agriculture and electronic products.

For example, new federal policies are encouraging the establishment of new chip-manufacturing facilities to counter China’s competition.

The Shenandoah Valley, Southside and Roanoke/New River/Lynchburg, in particular, are export anxious. However, they require the support of elected officials in denser Northern Virginia, Central Virginia and Hampton Roads. Timely funding now will bring economic development to rural areas, allowing them to better stand on their own financial feet.

The Virginia International Trade Plan, the brainchild of a bipartisan committee, is in place. Gov. Northam included funding for it in his outgoing biennium budget. We hope Gov. Youngkin, whose business bona-fides are well established, and the legislature will unite around our natural and manmade advantages and approve that funding. We also urge Richmond to advance a capital expenditure of $260 million to upgrade the north yard at NIT, to complement an earlier expansion of its south one.

With his experience in global investment, Gov. Youngkin surely understands the critical interconnection of state economic development and the global economy. It’s important for him to lead foreign-trade missions, to build political and popular support, and to urge General Assembly action to promote trade and foreign investment.

As we begin 2022 with a fresh set of elected leaders, let’s unite and right the ship, so to speak, and make Virginia the gold standard in international commerce. With the 12th largest population and 13th biggest gross state product (GSP) in the nation, Virginia should not be 41st and 44th in the nation in exports per capita and exports as a share of GSP, respectively.

Milliken is a former Virginia Secretary of Transportation and current chairman of the board of the Virginia Port Authority. Malawer is Distinguished Service Professor of Law and International Trade at George Mason University. Each serves on the bipartisan Virginia International Trade Advisory Committee.

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