International Trade

A Quick and Dirty Critique of Trump’s First Trade Policy Agenda

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This week, the Trump Administration issued its first report on the Trade Agreements Program, which also contains a short overview of how the Trump Administration views trade and will use trade agreements and protectionism to shape the trade environment.

I have three broad comments.

1. First, I think that we are the recipients of a head fake. Many analysts have described the Trump Administration as torn between economic nationalists like Navarro and Bannon, trade professionals (who are inclined towards a rule of law/sovereignty approach like Lighthizer), and the investment bankers like Wilbur Ross at Commerce or Gary Cohn who are likely supporters of market opening measures and trade agreements. However, this divide is a side show to the real play. The President’s trade policy approach – the focus on protectionism rather than market opening trade agreements – will enable him to centralize trade policy making in the White House. Just as he is taking power from the Department of State to make foreign policy he is taking power from the Congress, the USTR, and the Department of Commerce with this focus on protectionism. I see this as not only a form of breaking down the Administrative State, per Bannon, but taking more of the shared authority from Congress. It would be interesting to compare pp. 13-14 with the objectives delineated in Trade Promotion Authority 2015.

2. I found it shocking to see no mention of digital trade (the fastest growing sector of trade) and the importance of information flows to trade on pp. 13-19-of the report. President Trump and his posse have a distorted view of the US economy perhaps based on his experience and connections (steel matters to real estate and casinos matter to hotels) and his donor base. Steel and casinos are a minor component of the US economy and certainly not going to grow and create many jobs. The Internet and digital trade will create many more jobs, new professions, and much more economic growth. Internet companies are, however, not part of his worldview.

As Kimberly Ann Elliott of the Center for Global Development and I have written, “The truth is, bilateral trade talks simply would not be useful in negotiating rules to govern cross-border information flows, one of America’s most important exports. The platform for facilitating information flows–the internet– is designed to be universal, open, and global. Hence, the system of rules governing trade in information flows needs to be global as well.” So digital trade doesn’t fit his trade paradigm.

3. Finally, the President issues his agenda as part of the annual report on the “trade agreements” program. Since 1934, Congress has required the president to report on what he/she is doing to use trade agreements to open markets overseas, create jobs, and further the rule of law on trade. I fear these 7 pages are evidence that economic nationalism will trump the economic interest of the American people and the companies they have created.

About

Susan Ariel Aaronson is Research Professor at The George Washington University's Elliott School of International Affairs and the former Minerva Chair at the National War College. She directs a project funded by the US Army on repression, civil conflict, and leadership tenure. Aaronson also directs a fellowship fund for students working on internet issues, the eBay Policy Scholars, and organizes seminar series on Internet issues. While at GWU, Aaronson has received grants from the MacArthur, Ford, Swiss National Science Foundation and Ford Motor Company for her work on internet freedom and trade, corruption, and business and human rights. Her current research focuses on WTO membership and conflict; repression, civil conflict and socio-economic outcomes; and on how trade agreements affect digital rights and Internet governance.

About the author

Susan A. Aaronson

Susan Ariel Aaronson is Research Professor at The George Washington University's Elliott School of International Affairs and the former Minerva Chair at the National War College. She directs a project funded by the US Army on repression, civil conflict, and leadership tenure. Aaronson also directs a fellowship fund for students working on internet issues, the eBay Policy Scholars, and organizes seminar series on Internet issues. While at GWU, Aaronson has received grants from the MacArthur, Ford, Swiss National Science Foundation and Ford Motor Company for her work on internet freedom and trade, corruption, and business and human rights. Her current research focuses on WTO membership and conflict; repression, civil conflict and socio-economic outcomes; and on how trade agreements affect digital rights and Internet governance.

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