From today’s Economist, Greg Ip writes:
America’s economic transformation will require businesses to rely less on selling to Americans and more on selling abroad…. The emphasis will be on high-value products and services rather than on labour-intensive items such as furniture and clothing.
Bringing New Research Developments to Bear
The President’s goal of doubling exports elicited a lot of discussion, and skepticism. In a previous blog post, I examined the prospects of accomplishing this goal from a macroeconomic perspective. However, a few discussions I’ve had with journalists have reminded me that the frontier of international trade theory has moved considerably over the past few years, even as the much of the economic commentary remains mired in the older models. In this respect, the most recent edition of the Economic Report of the President was extremely welcome, as it brought to bear recent innovations in the trade literature.
Causes, Consequences and Prospects, edited by Richard Baldwin
From Baldwin’s introductory chapter:
World trade experienced a sudden, severe and synchronised collapse in late 2008 — the
sharpest in recorded history and deepest since WWII. This Ebook — written for the world’s
trade ministers gathering for the WTO’s Trade Ministerial in Geneva — presents the economics profession’s received wisdom on the collapse….
I noted in a previous post the decline in resources devoted to monitoring the safety of products in previous years, contributing to perceived gaps in consumer safety, and hence resistance to international trade.
Many observers have long worried about protectionist pressures even as the economy operates at full-employment. What, I wonder, will occur when the economy slows appreciably and unemployment increases, against a backdrop where the safety of imports is already at issue? Those of us who believe that a open and free trading regime is preferable to a restrictd trading regime should be concerned.
There was some disagreement with my assertion that Democrats were — effectively — not as protectionist as many have argued. Here are some more thoughts on the matter, as the Administration prepares the case for countervailing duties on Chinese imports [1].
Featuring prominently in the new energy plan from President Bush is a call for changes in the corporate average fuel efficiency (CAFE) standards that the Administration claims could reduce U.S. gasoline consumption by 5% over the next 10 years. Here are some of the reasons I’m not thrilled by that suggestion.
Distortion versus effective subsidy.
In the wake of the midterm elections, and the failure to renew Vietnamese PNTR, there has been a lot of talk about how more protectionist Democratic lawmakers are. See WaPo, The Economist (pre-election) [sub.req.], WSJ [sub.req.] and here. Greg Mankiw also steps in the fray.