Abstract
The world trading system has been in a state of crisis for two decades. Among other things, the WTO’s negotiating function has not worked well; there are fundamental disagreements about the appropriate role that countries at different development levels should play; bilateral and regional trade agreements are undermining the multilateral system; and the Trump administration is challenging the dispute settlement system. In this context, it is worth thinking about radical reforms that could address the various problems that have accumulated over the years. Doing so may require a shakeup of existing institutions, to overcome interest group influence that prevents real change. And taking on those interest groups may require a visionary leader who can impose change on reluctant actors. The resulting world trading system would look very different, with a more limited mandate focused on protectionism, and with artificial distinctions such as separate goods and services agreements abolished. It would also shift the focus away from trade-distorting preferential trade agreements, and frown upon the use of trade policy tools to promote foreign policy.
Associate Director of the Cato Institutes’s Herbert A. Stiefel Center for Trade Policy Studies.
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Notes
- 1.
Irwin (1998), pp. 325–352.
- 2.
- 3.
Aaronson (1996), p. 36 (“Workers, congressmen, and some business leaders complained that the process for determining tariff reduction was secretive and did not include representatives from the people or affected interests.”).
- 4.
Haggard (1988), pp. 115–116.
- 5.
Irwin (1998), pp. 341–342. (“Unlike Smoot-Hawley, Congress’s consideration of the RTAA attracted virtually no participation by interest groups. Haggard reasons that ‘in contrast to 1930... when interest groups were the main protagonists and specific tariff rates the issue, the most important issues at stake in 1934 were institutional, centering on the transfer of authority from Congress to the executive’ (1988, 112). The RTAA was simply enabling legislation, and no one knew how the authority would be used, how successful the negotiations would be, or how extensive the agreements might be. When the RTAA was passed, Congress could not anticipate how important the legislation would become or even whether it would be sustained by future Congresses. In view of the many short-lived trade policy experiments of the past three decades, it was not obvious that the RTAA would necessarily bring a lasting, durable change in U.S. trade policy making. Perhaps this accounts for the minimal participation of interest groups, even among export associations, in the RTAA’s passage.”)
- 6.
Aaronson (1996), pp. 34–60. (“… State Department officials were overconfident of their ability to broker between various interests to develop American trade policies. After all, the Trade Agreements Division … had the responsibility of recommending measures to implement Article VII of the Atlantic Charter. This, they thought, gave them alone, rather than with members of Congress or business leaders, the expertise to broker the national interest on trade policy through a multilateral trade negotiation.” p. 54); Irwin et al. (2008), pp. 46–52.
- 7.
Destler (1995), pp. 68–69. (“More open floor procedures also offered new opportunities for special interests to press their proposals”).
- 8.
- 9.
Ikenberry (1989), pp. 297–301. He explains that through these committees, “the role of interest groups was made more predictable.”
- 10.
The most detailed and comprehensive explanation of the role of IP companies in U.S. and global trade policy comes from Sell (2003).
- 11.
See, e.g., Charnovitz, Steve, An Appraisal of the Labor Chapter of the Trans-Pacific Partnership, Remarks Submitted to the Committee on Ways and Means Democrats, January 2016.
- 12.
USTR Schwab Announces New Office Focused on Intellectual Property, press release, 23 June 2006, https://ustr.gov/archive/Document_Library/Press_Releases/2006/June/USTR_Schwab_Announces_New_Office_Focused_on_Intellectual_Property.html Currently, the office is called the Office of Intellectual Property and Innovation.
- 13.
By the time of the Obama administration, it had 7–8 staffers working there. Conversations with U.S. government official.
- 14.
Conversations with U.S. government official.
- 15.
Oceana, Re: Request for Comments on the Proposed Trans-Pacific Partnership Free Trade Agreement, 74 Fed. Reg. 4480 (26 January 2009)” (PDF file), March 11, 2009, downloaded from Oceana website, http://oceana.org/sites/default/files/TPP_comments_3_11_09_FOR_FILING_2.pdf; Humane Society International, Re: United States—Trans Pacific Partnership Agreement, Docket #: USTR-2009-0041, (PDF File), 25 January 2010, downloaded from Humane Society International Website, http://www.hsi.org/assets/pdfs/tpp_comments_ustr_012510.pdf.
- 16.
U.S. Tables Parts Of TPP Environmental Text On Conservation Issues, Inside U.S. Trade, 1 April 2011, https://insidetrade.com/inside-us-trade/us-tables-parts-tpp-environmental-text-conservation-issues; See also: McGrath, Matt, Giant US trade deal might weaken shark fin ban, BBC News, 16 January 2014, http://www.bbc.com/news/science-environment-25743459.
- 17.
Peterson, Matt, The Making of a Trade Warrior, The Atlantic, 29 December 2018 https://www.theatlantic.com/politics/archive/2018/12/robert-lighthizers-bid-cut-chinas-trade influence/578611/; Markay, Lachlan, Trump Officials Oversee Trade Rules Gamed by Former Clients, Daily Beast, 15 July 2019 https://www.thedailybeast.com/trump-officials-oversee-trade-rules-gamed-by-former-clients.
- 18.
Unfortunately for those industries, the overall trade policy under the Trump administration has undermined domestic manufacturing and left them worse off. See Institute for Supply Management, November 2019 Manufacturing ISM Report on Business, 2 December 2019, https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?SSO=1; Rabouin, Dion, The End of Trump’s Manufacturing Renaissance, Axios, 5 December 2019, https://www.axios.com/trump-tariffs-manufacturing-job-losses-6c4841de-0c01-4c4f-99c5-6e2bf26d670e.html.
- 19.
Swanson, Ana and Vogel, Kenneth, Trump’s Tariffs Set Off Storm of Lobbying, NY Times, 16 March 2018, https://www.nytimes.com/2018/03/16/us/politics/trump-tariffs-lobbying.html; see also, McDaniel, Christine and Parks, Danielle, Tariff Exclusion Requests: A One-Year Update, Mercatus Center, 11 April 2019, https://www.mercatus.org/bridge/commentary/tariff-exclusion-requests-one-year-update.
- 20.
Markay, Lachlan and Stein, Sam, Donald Trump Is Quietly Building an Alliance With Liberals on Trade, Daily Beast, 16 November 2017. https://www.thedailybeast.com/donald-trump-is-quietly-building-an-alliance-with-liberals-on-trade.
- 21.
Schlesinger, Jacob, Trump Forged His Ideas on Trade in the 1980s—and Never Deviated, Wall Street Journal, 15 November 2018, https://www.wsj.com/articles/trump-forged-his-ideas-on-trade-in-the-1980sand-never-deviated-1542304508; and Donald J. Trump, Twitter post, 2 March 2018, 5:50 a.m., https://twitter.com/realdonaldtrump/status/969525362580484098.
- 22.
Lester, Simon, The U.S.-Mexico-Canada (AKA the New NAFTA) Trade Deal: Investment Protection/ISDS, International Economic Law and Policy Blog, 1 October 2018. https://worldtradelaw.typepad.com/ielpblog/2018/10/the-us-mexico-and-maybe-nafta-trade-deal-investment-protectionisds.html.
- 23.
Lester, Simon, Will the New NAFTA Boost Digital Trade?, National Interest, 5 May 2019 https://nationalinterest.org/feature/will-new-nafta-boost-digital-trade-55707.
- 24.
Drezner (2019), pp. 7–24.
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Lester, S.N. (2020). Waiting for Cordell Hull. In: Lewis, M.K., Nakagawa, J., Neuwirth, R.J., Picker, C.B., Stoll, PT. (eds) A Post-WTO International Legal Order. Springer, Cham. https://doi.org/10.1007/978-3-030-45428-9_4
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