President Donald Trump is pushing all the right buttons when it comes to an economic agenda for his administration: eliminate excessive regulations, reduce corporate taxes, repeal Obamacare, pursue a sane energy policy, and fix immigration. But what is puzzling is that Trump has expressed some opinions about trade that are troubling.
Last week, President-elect Trump card his distaste for the Trans-Pacific Partnership and made withdrawal of the United States from the agreement a “Day One” priority. Although the move would hearten many of Trump’s supporters, history would judge it as folly — with a capital “F.”
At a monetary conference in Vienna back in 2014, the distinguished Frenchman, friend, and occasional collaborator Jacques de Larosière proclaimed that the current world monetary order should be termed an “anti-system.” He has a point — an important point. Among other things, such an anti-system invites an enormous amount of instability, as well as uninformed loose talk that influences public opinion and policy.
The UK’s vote to leave the European Union (Brexit) has taken the world by surprise. There has been much debate about what it means, if anything, to America. Whatever the outcome, which will not be known for years, it shouldn’t undermine America’s resolve to grow exports and expand our global leadership.
The Trans-Pacific Partnership, involving the United States and 11 other Pacific-bordering countries, has a tremendous upside for the U.S. For example, it’s projected to boost U.S. inflation-adjusted annual income by $131 billion by 2030, which represents 0.5 percent of GDP. It’s also anticipated to generate an additional $357 billion in annual exports by the same year, according to the Peterson Institute for International Economics (PIIE), a Washington, DC-based think tank.
Recent discussions of trade negotiations have focused on the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), often referred to as “mega-regional” trade talks. But most economists and other trade experts agree that trade liberalization would be more beneficial if done on a multilateral basis, at the World Trade Organization (WTO). There are talks going on at the WTO, referred to as the Doha Round, but they started in 2001 and are widely seen as not likely to achieve much.
Implemented nearly 22 years ago, the North American Free Trade Agreement (NAFTA) has become one of the most misunderstood trade agreements in history. Due to a massive dissemination of misinformation about NAFTA and free trade in general, a large segment of the U.S. population continues to believe that the agreement is not in the interest of the United States. Nothing could be further from the truth.
In the coming debate over the Trans-Pacific Partnership (TPP), one of the most controversial issues is likely to be Investor–State Dispute Settlement (ISDS), a legal mechanism in many trade agreements and investment treaties by which foreign investors can sue host governments in an international tribunal. For lawyers who specialize in these issues, the rhetoric about ISDS can be extremely frustrating.
On October 5, 2015, after an intense few days of negotiations, government officials from the United States and 11 other Pacific region countries announced the conclusion of the Trans-Pacific Partnership (TPP), a trade deal involving countries making up almost 40 percent of the world’s gross domestic product. Specific details of the agreement are still lacking, but by any measure this deal will be one of the largest in history. However, the work is not done yet.
The United States is currently engaged in a number of far-reaching trade talks. However these agreements end up, Americans at least can rest assured that their economic interests are well represented … at least by the foreign negotiators. To be sure, the U.S. negotiators in the Transatlantic Trade and Investment Partnership, the Trans-Pacific Partnership, and the Trade in Services Agreement want to open overseas markets for American companies.
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