Democratizing U.S. Trade Policy (Council on Foreign Relations (Council on Foreign Relations Press))

Comments

1. Guest says

   January 18, 2007 at 12:00 am

   The breakdown in consensus around the US trade agenda has brought the visions of business and labor in conflict risking the loss of benefit from ongoing trade liberalization. Since the partisan and one-sided wrangling in US Congress about the merits and demerits of trade cannot be won, there is a need for \\”further democratization of US trade policy\\” (p. 14). This paper – Democratizing US trade policy – looks at the need for a change, its challenges and prospects.

   There is a need for a change because trade policy-making is presently unable \\”to broker a compromise\\” between unfettered trade beloved by the business community when it is in a winning position, and almost always bemoaned by labor for fear it will lead to domestic job loss to foreigners. A new approach is necessary for the national good since, as the US economy globalizes, many an American life increasingly depend on the global economy. At this same the American populace is conflicted about trade, not so much about its beneficial impacts, but more so about its corresponding costs and whether or not they can be justified. Obviously it is good to wear nice shoes for a penny; it is quite a different thing if an American worker loses his/her job because of it, or a poor foreign worker is exploited by sweatshops to produce a cheap shoe.

   This book sees four steps that must be taken toward democratizing US trade policy: (a) giving equal weight to globalization, and stressing fairness in the distribution of the net gains from globalization; (b) increasing the number of stakeholders in the policy-making process; (c ) opening up the policy process to the public (transparency); and (d) making the process consistent with national interest (accountability). The four steps together suggest that successful policy is a function of process.

   The process depends on power and authority, i.e., power to decide, power to be present , and power to be represented. Historically authority has alternated between the US President and US Congress, with the effect that \\”there have been periods of both close institutional cooperation and increased friction\\” (p.12). Recently there has been more discord than cooperation both across political parties and between the President and Congress. Moreover, the domestic policy process has evolved along with changes in the international process. One can argue that US domestic trade policy is a function of both the domestic and international processes.

   If the democratization of US trade policy depends on domestic and international authorities, how can the balance be redressed? Domestically that is a very difficult question to answer because Congress has constitutional authority over international commerce, while the President has influence through his Trade Representative. The authors offer three possible solutions: (a) establishing a congressional trade office, instead of the costly committees that Congress normally uses; (b) appointing congressional trade advisers; and (c ) creating a joint (President-Congress) fast-track trade-negotiating authority. Solutions (a) and (b) essentially get rid of weaken the President’s fast-track ability; and (c ) requires constitutional change. In all three cases, the lines may already be drawn in the sand.

   The book anticipates these problems in recognizing that trade policy processes are now influenced more by domestic and international regulatory environments than by physical restrictions, such as tariffs. A feasible remedy is regulatory convergence. But regulatory convergence would require democratization of international institutions as well, among them the World Trade Organization (WTO), the IMF, the World Bank, and the rest. This is not cake-cutting, and there are a lot of grounds to protect here.

   In the end the paper succeeds in stating the problem and urging its solution. The general idea that the solution lies in democratizing trade policyis also good. Now whether that solution can be brought about by \\”broadening the input\\”, as argued on page 53ff, is less convincing. The mechanisms recommended for broadening the input appear to justify enlarging government’s role in the trade regime. If so, increased government involvement question the feasibility of transparency and accountability. Indeed, it points out the ugly fact that deadweight losses due to imperfect trade policy will persist. Theses comments do not mean the paper is not worth reading; they only mean the problem is far from being solved.

   Amavilah, Author
   Modeling Determinants of Income in Embedded Economies
   ISBN: 1600210465