Progressives might disagree among themselves on what they want out of trade policy, but the vision of one particular progressive, long-time friend of this blog Todd Tucker, is here.
First, let me say that I love the title of his report: "The Sustainable Equitable Trade Doctrine: Building Progressive International Cooperation to Counter Right-Wing Economic Authoritarianism." That is some beautiful framing of the issue for people on the left! The positive words are "sustainable," "equitable," "build," "progressive," "international," and "cooperation," and can be contrasted with the negative words "right-wing" and "authoritarianism," which needs to be "countered." Masterful spin!
In terms of the content, it may take me a few days to read the whole thing, but for now I'll just quote the recommendations of the report, which I disagree almost completely with:
1. Cooperate internationally on bigger-ticket items than tariff reductions. The benefits of international cooperation on fighting tax evasion, monopoly power, unstable financial markets, climate change, and macroeconomic imbalances from misaligned currencies far outstrip even the most optimistic projections for agreements like the TPP. In a policy environment where tariffs are low, the gains from further tariff liberalization are limited. This report makes detailed recommendations on changes to international trade agreements and domestic law that will focus foreign policy on the highest-value targets, not the meager and divisive.
2. Launch an Equitable Investment Act, Equitable Investment Convention, and Equitable Recognition Act to open up trade agreements and international litigation to broader societal interests. Currently, investors have litigation rights in trade deals that other groups (such as unions, environmentalists, and domestic investors) don't have. By putting all groups on a level playing field—and fixing how pact violations are remedied so as to ward off rent-seeking and speculation—global economic governance will gain legitimacy and defenders.
3. Appoint a Special Advisor for Equitable Trade and Globalization to reorganize government and treatymaking. The next generation of global economic governance needs to be much more inclusive. A new trade policymaking agency should be tasked with a much broader mission than simply signing new trade deals. Government statistical agencies must radically upgrade data collection to better understand the impact of trade on working people. And rather than engage in costly country-by-country negotiations, upgrades to treaties should be pursued on a unilateral or multilateral level to maximize the diffusion of progressive rules and rulemaking. Renegotiation of particular deals like the three-country NAFTA is only worth the time if the new deals can be joined easily by large numbers of countries committed to a refashioned agenda.
4. Enact a Sustainable Jobs Industrial Policy. While the new administration has pushed "Buy American, Hire American" rhetoric, it has done nothing to ensure that whatever rents are generated by this approach “trickle down” to workers. A smart industrial policy would focus benefits on firms that have the best labor practices, utilize production processes that require close collaboration between line-workers and designers, and make products that will be of ongoing importance to a green economy.
5. Establish a Trade Reparations Commission. For decades, policymakers have subjected U.S. workers to grinding competition with low-wage workers with no adjustment assistance anywhere near scale. However, 30 years in, unwinding supply chains and cancelling trade agreements is likely to do more harm than good. Instead, policymakers should admit their approach was flawed, but focus on building prosperity for the future by making financial reparations for the harm caused.
At first glance, this seems like an attempt to move trade policy away from liberalization and open markets, and towards a variety of government interventions. As you might guess, I have a number of objections.
First, there are plenty of tariffs left, and there would be great economic value in getting rid of them. Tariffs primarily benefit the wealthy and special interests at the expense of the poor and middle class, so it surprises me when people who call themselves progressives say they want to ignore tariffs and move on to other things.
Second, I doubt that international cooperation will accomplish much in the areas where he wants to use it (and, it seems to me, international initiatives can be used as a way to avoid taking domestic action), but beyond that it seems like Todd is mostly trying to make trade policy into a vehicle for issues other than what we normally think of as trade policy.
Finally, with regard to reparations, how about some reparations for the extra costs everyone has been paying all these years to the special interests that lobby for protection from competition with foreigners?
Having said all that, I will try to read the whole thing at some point, and see if I can come up with comments that are more constructive and less snarky.