The United States and the European Union have recently implemented ambitious domestic greenhouse gas reduction programs. But reducing global emissions will not be possible unless China and other middle-income emitting countries cut their emissions. And the different approaches the EU and U.S. have taken create a risk of policy and trade conflicts that divert both from the larger goal of limiting world emissions.
Report authors Paul Bledsoe, Strategic Advisor at PPI and a former Clinton White House climate official, and Ed Gresser, Vice President and Director for Trade and Global Markets and former Assistant U.S. Trade Representative for Trade Policy and Economics, lay out a policy framework where the U.S., EU, and other G7 countries set emissions standards for high-carbon industries, and impose a fee applying to both local production and imported goods with high emissions rates. This trade agreement would help countries meet their emissions goals, avoid imposing trade penalties on each other, and give China and other large emitting, middle-income countries incentives to follow suit.
“The Alliance for Clean Trade (ACT) proposes that the U.S. and our G7 allies ban together to create powerful trade incentives for China and other nations to cut their emissions, so global emissions can fall and we can prevent the worst of climate change impacts,” said Paul Bledsoe. “Without new economic incentives to reduce emissions, our world will see dangerous climate impacts and rising household costs that will soon swamp our ability to adapt and protect public safety at home and around the world. Our framework helps provide a pragmatic, yet ambitious way forward, while also complying with World Trade Organization rules.”
“The world has just had a shining example of U.S.-Europe-Asian collaboration to develop new technologies and products needed to meet a worldwide threat in the case of the COVID-19 vaccines. We need a similar collaborative effort to meet the challenge of climate change, and to induce the large middle-income economies that are the source of new net emissions to become more efficient,” said Ed Gresser. “This paper is an effort to outline such a program, through trade incentives based on common charges for over-production of carbon in the highest-emissions industrial sectors.”
The framework seeks to address three major problems with current policies and other proposals:
The framework creates powerful economic incentives for China and other large emitting, middle-income countries to cut emissions since they now export to the U.S., EU and other allied countries without penalty for higher CO2 emissions.
The framework also harmonizes increasingly disparate climate policies among US, EU and G7 allies for trade purposes, using low emissions intensity by sector as the key metric.
The framework complies with World Trade Organization principles of national treatment and non-discrimination, avoiding the risk that proposals currently being considered in the U.S. Congress might violate U.S. trade obligations, but without requiring widespread U.S. carbon pricing.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
A low-emissions trade deal to help the United States, the European Union, and their allies harmonize approaches to the clean energy transition and incentivize China and other nations to reduce emissions.
EXECUTIVE SUMMARY
After many years of discord and false starts, the United States, the European Union, and most other major developed economies are implementing ambitious domestic greenhouse gas emissions reduction programs. U.S. and EU emissions, respectively the world’s secondlargest and third-largest flows of carbon dioxide into the atmosphere, are likely to continue to fall sharply as a result.
But their efforts won’t be enough. To avert a disastrous rise in global temperatures, the larger, necessary goal is to reduce global emissions. For this, however, China — whose emissions are now greater annually than the U.S., EU, and all other developed countries combined — must reduce its emissions, and so must other major middle-income emitting countries. So far, that isn’t happening.
Here’s a program that can help: An Alliance for Clean Trade (ACT) that minimizes climate and trade policy conflict among low-emissions economies including the U.S. and EU, accelerates the reduction of emissions in some of their major industrial sectors, and creates strong economic incentives for others, including eventually China, to reduce their own emissions.
The core idea is for the U.S. and EU, joined by other G7 countries and eventually OECD nations, to set emissions standards for high-carbon industries, and impose a fee applying to both local production and imported goods with emissions rates above an agreed emissions intensity standard. This would help them meet their emissions goals, avoid counterproductive rivalries and imposition of trade penalties on one another, and give China and large emitting, middle-income countries incentives to do the same.
Today, the Progressive Policy Institute (PPI) announced that Mitchell Taylor has been hired as a Congressional Policy Fellow to support the Blue Dog Coalition. Taylor will be placed in the office of Congresswoman Mary Peltola (AK-AL), the recently named Blue Dog Coalition Co-Chair for Policy and Legislative Strategy, and will provide critical policy, communications, and administrative support for the 10-member coalition.
The Blue Dog Coalition is led by Congressman Jared Golden (ME-02), Co-Chair for Administration, and Congresswoman Marie Gluesenkamp Perez (WA-03), Co-Chair for Communications and Outreach, in addition to Congresswoman Peltola. Together, these Democrats represent the three most GOP-leaning districts in the House Democratic caucus.
“I am excited to join the Blue Dog team and look forward to helping its members advance common sense policy solutions,” said Mitchell Taylor. “After starting my career working in the Senate, this PPI fellowship opportunity will allow me to take on an expanded policy portfolio in the House and provide support to this exciting group of members who are committed to breaking gridlock and getting things done.”
Prior to joining the Blue Dog Coalition as a PPI Congressional Policy Fellow, Taylor worked in the office of U.S. Senator Jerry Moran (R‑KS). Taylor is also a member of the DC New Liberals, a local chapter of the Center for New Liberalism, a grassroots organization fighting for center-left, pragmatic policies.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
The Blue Dog Coalition is an official caucus in the U.S. House of Representatives comprised of fiscally-responsible Democrats, who are leading the way to find common sense solutions. The Blue Dogs are dedicated to pursuing fiscally-responsible policies, ensuring a strong national defense for our country, and transcending party lines to get things done for the American people. Learn more about the Blue Dogs by visiting https://bluedogcaucus-golden.house.gov/.
Dunn Street founder and Community Organiser Stephen Donnelly was joined by Director of the Project on Center-Left Renewal at the Progressive Policy Institute, Claire Ainsley.
Claire joins the show to discuss the Project on Centre-Left Renewal and how it aims to make center-left parties more competitive and improve their governing performance.
She also discusses her journey into politics and towards working for the Progressive Policy Institute.
Like the lawyer he is, Keir Starmer seems to be calmly and methodically building a conclusive case for Labour’s return to power after a 13-year absence.
True, he’s gotten a big assist from Boris Johnson’s downfall and the ensuing succession chaos among the Tories. But Starmer has deftly steered Labour away from the reefs of doctrinaire socialism — which contributed greatly to its shattering 2019 defeat — and back toward its “home port” among working-class voters.
Why should an American observer from a center-left think tank in Washington take such a keen interest in Labour’s ups and downs?
FACT: Seven countries have ratified the WTO fishery subsidies agreement.
THE NUMBERS: Fishery subsidies (2018 estimates*) –
World
$35.4 billion
Asia
$19.5 billion
China only
$7.5 billion
Europe
$6.4 billion
EU members
$3.8 billion
U.S./Canada/Mexico
$4.4 billion
U.S.
$3.4 billion
South/Central America
$2.0 billion
Africa
$2.1 billion
Oceania
$0.8 billion
* Sumaila et al.
WHAT THEY MEAN:
A year ago at the WTO’s 12th Ministerial Conference in Geneva, the 164 WTO members “reached consensus” — WTO-speak for agreeing on something with no holdouts — on the first new multilateral trade agreement in a decade. This is the “Agreement on Fishery Subsidies,” a trade/environment accord that “prohibits support for illegal, unreported and unregulated (IUU) fishing, bans support for fishing overfished stocks, and ends subsidies for fishing on the unregulated high seas.”
Where does it stand a year later? Some context first, on fish, ships, and money:
Fish: Last year’s fishery market, according to the UN’s Food and Agriculture Organization in State of World Fisheries and Aquaculture 2022, totaled about $406 billion at “first sale” (i.e. price on the dock, rather than on the plate) with $151 billion of this from exports. “Capture” marine fishing (i.e., caught from a boat as opposed to farmed) produced about 80 million tons of seafood, a total which has been roughly stable for the last 25 years. (The freshwater catch came to 10 million tons, and aquaculture about 88 million tons.) To put these figures in context, the human race collectively weighs about 500 million tons.
The top fishing countries by the FAO’s tally are China, Indonesia, Peru, India, and Russia, with the U.S., Vietnam, Japan, Bangladesh, and Norway next. Together, these ten countries catch about half the global “capture fishing” total. China alone, at 13 million tons, makes up about a seventh of the combined marine and freshwater catch, and (see below) is also the largest provider of fishery subsidies. Estimates for the sustainability of this catch often read the data differently, but express similar pessimistic messages. FAO says that “the fraction of fishery stocks within biologically sustainable levels decreased to 64.6% in 2019” (from nearly 90% as of 1974), or in more detail that 35.4% of world fisheries are overfished, 57.3% are at maximum yield, and only 7.2% are “underfished.” The view of the NGO Oceana (not necessarily contradictory in factual terms, but different in emphasis) is that only 17% of fisheries are currently able to produce more fish, and over 80% “cannot withstand additional fishing”.
Ships: The FAO’s report counts 4.1 million fishing vessels on the water in 2022, topped by 2.7 million in Asia and 1 million in Africa. Most are very small, and the total includes 1.5 million sailing or rowing boats. About 45,000, though, are large factory-type ships of lengths over 25 meters and weight above 100 tons. To put this in context, UNCTAD’s World Maritime Review 2022 reports that the world’s cargo fleet comprises 102,899 ships of more than 100 tons. Navies operate about 10,000 boats, while wealthy individuals and businesses sail around in about 10,800 pleasure yachts. So all told, FAO’s figure suggests that about a third of the world’s big ships are large fishing vessels.
It would be nice to think that these large fishing ships are professionally managed and less likely to be involved in IUU or other destructive fishing practices than small boats. But this is not so. One notorious individual case, that of the Vladivostok 2000 — a converted oil tanker said in media reports to be the world’s largest factory fishing vessel — is an example. At 228.6 meters in length and 49,400 tons, it is about twice as large as UNCTAD’s 21,700-ton average for major cargo ships, and can process half a million tons of fish a year. V2K was blacklisted by the South Pacific Regional Fisheries Management Organization as an IUU vessel ten years ago (under its earlier name Damanzaihao) but continues in operation and is en route this week in the Sea of Okhotsk, traveling from Russia’s Maritime Province to Sakhalin Island.
Subsidies: Estimates of the scale of fishery subsidies are currently about $35.4 billion (as of 2018) — that is, nearly a tenth of “first sale” and a quarter of export value. A detailed look from a research group finds these subsidies heavily concentrated in Asia, where China pumps $7.5 billion into fishery fleets each year and other Asian states add $13 billion more. North America and Europe combine for $8 billion; Latin, Africa, and Pacific subsidies are modest by comparison, combining for a value of about $5 billion. About 80% of subsidies go to large boats and fleets, and 20% to smaller boats and artisanal fisheries. By function, $22 billion goes to ramp up the size of fishing fleets, and $7 billion to subsidize fuel.
Back now to the WTO. Last June’s agreement caps fully 24 years of official negotiating, dating back to the Clinton administration’s adoption of fishery subsidy reduction as a WTO cause in the late 1990s. So, quite an accomplishment for governments, activists, scientists, and responsible industry. On the other hand, reaching a consensus on the text was a milestone rather than a final act, and (setting aside big implementation and enforcement jobs), still has two steps to go:
(1) Ratifications and acceptances: The agreement requires ratification by two-thirds of the WTO’s 164 members to go into effect. Only then will countries be required to start cutting back their fishing-fleet enhancement, fuel, and other subsidy budgets. Seven countries have ratified so far: the United States, Canada, Iceland, the Seychelles, Singapore, Switzerland, and the United Arab Emirates.
(2) Unsettled issues: Finally, the agreement has a “provisional” quality, as it left some issues unsettled last year. WTO members need to settle these to make it permanent. Especially notable among them is treatment of subsidies related to overcapacity. Once in force the agreement will last only for four years and self-terminate if these remaining questions aren’t settled in future talks.
FURTHER READING:
Counting fish and boats:
FAO’s State of World Fisheries and Aquaculture 2022 reports on fish take, fleets and employment, sustainability and more. A sample, breaking down the 80 million tons of sea catch:
67 million tons of fish, led by anchovies, Alaska pollock, and skipjack tuna;
5.6 million tons of crustaceans, mostly varieties of shrimp and crab;
5.9 million tons of mollusks, topped by squid;
0.5 million tons of edible jellyfish, sea urchins, sea cucumbers, and miscellaneous other sea life.
Rashid Sumaila et al. in Science Direct tabulate a worldwide $35.4 billion in fishery subsidies by region, purpose, large vs. small ships, and more.
Final thought from the researchers:
“[In the past decade] no real progress to eliminate capacity-enhancing subsidies has been made. For example, fuel subsidies are still the largest subsidy type being provided by countries. This is not good news as this subsidy is the most directly linked to overfishing. A concerted effort by all countries to discipline these subsidies via the WTO or other mechanisms is crucial. … The fact that countries that fall within the high HDI [“high development index,” a UN index of wealth] group, including Russia and China, provided 87% of total global subsidies is telling. It is clear that to discipline subsidies and safeguard marine fisheries, these countries will need to step up.”
Oceana reports that $5.3 billion worth of subsidies, or a fifth of the world total, go to support fleets operating in other countries’ water.
And a list, regularly updated, of 352 vessels blacklisted by Regional Fisheries Management Organizations for IUU fishing.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
Testimony from Edward Gresser House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet
June 6, 2023
Mr. Chairman and Mr. Ranking Member,
Thank you very much for inviting me to testify at this morning’s hearing on intellectual property, innovation, and the U.S. competition with China, focused on the World Trade Organization and its decision on waiver of patent obligations for COVID-19 vaccines and potentially for “diagnostics and therapeutics” related to COVID-19.
By way of introduction, I am Vice President of the Progressive Policy Institute (PPI) here in Washington, D.C., a 501(c)(3) nonprofit research institution established in 1989 and publishing in a wide range of public policy topics. Before joining PPI, I served at the Office of the U.S. Trade Representative from 2015 to 2021 as Assistant U.S. Trade Representative for Policy and Economics, with responsibility for overseeing USTR’s economic research and use of trade data, chairing the interagency Trade Policy Staff Committee, and administering the Generalized System of Preferences. This period coincided with the beginning of the COVID-19 pandemic in December 2019 and extended through the initial WTO discussions on a temporary waiver of some elements of the 1994 TRIPS agreement relating to COVID vaccines.
The hearing poses some important questions. Specifically, how does the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) relate to U.S. interests in innovation and technological progress? Was the Biden administration correct to support a waiver of some of the TRIPS patent provisions for COVID-19 vaccines? Will this be to the advantage of China vis-à-vis the United States? I can summarize my view of this in four points.
A generation of technological innovation, infrastructure deployment, and generally good policy have combined to create a global digital world of 5.3 billion people. The Biden administration recently produced a report, “Declaration on the Future of the Internet,” outlining the vision of the future — one with free flows of information, high-quality consumer protection, economic growth, and liberty preserved.
Today, the Progressive Policy Institute (PPI) released a new report “Digital Trade 2023: The Declaration, The Debates, and the Next Global Economy,” detailing how the Biden administration’s vision is correct, but highly contested across the world. Report author Ed Gresser, Vice President and Director for Trade and Global Markets, provides recommendations on how the administration can achieve its vision and contribute to the next generation’s growth and digital liberty.
“A strong digital trade agenda is both a contributor to growth and American leadership, and a chance to shape the next-generation world economy in the spirit of liberty, inclusion, and American values,” said Ed Gresser.
The report makes the following policy recommendations:
An idealistic and ambitious approach in the 15-country “Indo-Pacific Economic Framework” (IPEF), that provides a future vision more attractive than authoritarian alternatives resting on free flows of data, opposition to forced localization of server and data, strong consumer protection, non-discriminatory regulation, anti-spam and anti-disinformation policies, cyber-security, and broad-based growth through encouragement for open electronic commerce.
A strong response in the U.S.-EU Trade and Technology Council (TTC) to European Union attempts to create discriminatory regulations and taxes targeting American technologies and firms.
Defense of U.S. values in the U.N., WTO, and other venues against “digital sovereignty” campaigns by China and others that endanger the internet’s multi-stakeholder governance, normalize large-scale censorship and firewalling, and generally place the political fears and policy goals of authoritarian governments above the liberties of individuals.
Supporting responsible governance of technology and politely but firmly pushing back on attempts either at home or internationally to demonize technological innovation and American success.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
In the single generation since the launch of the internet, a generation’s worth of scientific research and technological innovation, infrastructure deployment, and generally good policymaking has taken a small set of computer networks operated by academics, business researchers, and government scientists, and turned into a global digital world of 5.3 billion people. Associated with this has been an enormous leap forward in individual liberty, in global prosperity, and in new policy challenges. Looking ahead with its allies and partners last year, the Biden administration helped produce a vision of the future. This is the “Declaration on the Future of the Internet,” which, in a brief two and a half pages, illuminates a possible version of the next the digital world: one of freer flows of information, higher-quality consumer protection, enhanced economic growth, and liberty preserved.
Their vision is right, but it is highly contested — in part by authoritarian governments seeking to restore or strengthen controls over their publics (or even, at least in part, other countries’ publics), and in part by often friendly countries mistakenly believing that their own technological leadership might depend on diminishing that of the U.S. tech industry. The administration can help achieve its vision, and in doing so contribute to the realization of the Declaration’s vision, through four steps:
1. An idealistic and ambitious approach in the 15-country “Indo-Pacific Economic Framework” (IPEF), that provides a future vision more attractive than authoritarian alternatives resting on free flows of data, opposition to forced localization of server and data, strong consumer protection, non-discriminatory regulation, anti-spam and anti-disinformation policies, cyber-security, and broad-based growth through encouragement for open electronic commerce.
2. A strong response in the U.S.-EU Trade and Technology Council (TTC) to European Union attempts to create discriminatory regulations and taxes targeting American technologies and firms.
3. Defense of U.S. values in the U.N., WTO, and other venues against “digital sovereignty” campaigns by China and others that endanger the internet’s multi-stakeholder governance, normalize large-scale censorship and firewalling, and generally place the political fears and policy goals of authoritarian government above the liberties of individuals.
4. Supporting responsible governance of technology and politely but firmly pushing back on attempts either at home or internationally to demonize technological innovation and American success.
Expectations are sky-high for Ukraine’s coming counteroffensive against Russian invaders. Following the loss of Bakhmut, Kyiv hopes to regain the military initiative and break out of a grinding war of attrition that plays to Moscow’s big advantage in manpower.
In the next round, Ukraine’s forces will have a decided qualitative edge to offset Russia’s seemingly bottomless well of cannon fodder. They’ve received an infusion of top-line tanks, air defense systems and other advanced weapons from the United States and Europe, as well as combined arms training that will help them dictate the terms of battle.
On top of that, Ukraine’s defenders have exhibited superior morale and tactical ingenuity on the battlefield. While few military experts think the offensive will end the war, significant gains by Ukraine could have large political repercussions in Moscow, Washington and European capitals.
FACT: India is now the world’s most populous country.
THE NUMBERS: Annual deaths to natural disasters* –
World population
17.5%
World GDP
3.0%*
World goods/services exports
2.2%
* Exchange-rate basis, IMF estimate. The alternative purchasing-power parities calculation gives a GDP share of 5.9%.
WHAT THEY MEAN:
One day towards the end of April, or perhaps in the early days of May, a handful of births and a few memorial services left India (by the U.N.’s estimates) passing China as the world’s most populous country. (Bharat 1.427 billion; Zhongguo 1.426 billion.) A couple of India-in-the-world observations at this point of transition:
1. People: India’s 1.427 billion people represent a bit more than one in six of the world’s 8 billion. Apart from being a shade above China’s now-gently-declining population, the total is (a) about equal to the population of continental Africa, and (b) 200 million more than the 1.24 billion of all high-income countries combined. Put another way, seven of India’s 28 states and Union Territories would be among the world’s 20 most populous countries.
2. Economy:Indian GDP, now fifth-largest in the world after passing France in 2019 and the U.K. in 2020, is about $3.7 trillion and growing at 5.9% by IMF estimates this year. This puts India at about 3% of the $105 trillion world GDP (with the U.S. at $26.9 trillion, China $19.4 trillion, and the EU $17.8 trillion). Perhaps still modest in comparison to population, but growing faster than all 19 of the other top-20 world economies this year (and also faster than 49 of the world’s top 50, just shaded by the Philippines’ 6.0%). International Monetary Fund forecasters see enough sustained growth for India to reach $5 trillion in 2027, passing both Germany and Japan that year.
3. Trade flows: India’s presence in trade flows remains particularly small. As of 2021, India’s $395 billion in goods exports made up 1.8% of a $22.4 trillion world total, at par with Spain and the United Arab Emirates. Its $240 billion in services exports draws a lot of attention and is in fact larger, but still is only 4% of the $6.0 trillion world services-export total. Some of this reflects geography — particularly the constant turbulence and frequent border closures with Pakistan — but not all; it’s hard to find explanations outside policy for India’s very small trading relationships with the ASEAN and the East African countries on its east and west.
4. Trade policy: India’s contemporary trade diplomacy inherits powerful swaraj (“self-sufficiency”) instincts, and (at least in the view of two generations of frustrated American trade negotiators) puts more energy toward import limits than export goals. As of 2022, India’s tariff rate is the highest among the 164 WTO members — 18.3% by simple applied average according to the WTO’s World Tariff Profiles 2022, or 12.6% by trade-weighted average. India is also the WTO’s most enthusiastic anti-dumping user, with 775 anti-dumping penalties reported from 1995 through 2022, about a sixth of the 4,463 total known worldwide. One index of the consequences is India’s modest overall share of trade; another one is the particularly low level of trade with neighboring countries — about 3% of ASEAN’s goods exchanged, and 5% of sub-Saharan Africa’s. India’s place in services trade is, however, larger — 4.0% of exports, slightly above India’s GDP share but probably still below potential.
The IMF’s World Economic Outlook database tracks and estimates GDP in dollars and by growth rates, imports and exports, and lots more, for all countries.
The WTO reviews Indian trade policy now (or more precisely January 2021; new review coming next year).
The Arthasastra, an encyclopedia-type Sanskrit work traditionally ascribed to the Maurya empire’s 4th century B.C. political fixer Kautilya, has a reasonable claim to be not only the world’s oldest political guidebook but also the oldest trade-policy manual (or even the first think-tank product, translating in English to 800 pages on war, administrative organization, tax, natural resource management, and more, complete with bullet-point format). Quick samples:
As a strategist and diplomat, Kautilya has a pessimistic, probably overly reductive premise: any bordering kingdom is your enemy; any neighbor of that kingdom, so long as it doesn’t also border you, is your natural ally. As a human resources theorist, he’s practical and not much inhibited by conventional scruples: “Those who are cruel, lazy, and devoid of any affection for their relatives shall be recruited as poisoners.” On the other hand, K. takes a sensible view of natural resource management (designate state forests and limit their exploitation for wood), and views consumer protection as an important government responsibility. His trade advice is precise, profit- and growth-minded, and divides easily into three parts:
(a) Trade facilitation: A wise ruler will appoint officials responsible to keep international trade routes “free from obstruction by courtiers, state officials, thieves, frontier guards, and herds of cattle.” (Note the assumption that the main obstructors are likely to be the king’s own greedy officials.) Also, set up marketplaces in towns and at crossroads to ensure access to imports.
(b) Import promotion: Importers should get special privileges as suppliers of essential goods. Kautilya recommends (i) exempting the early-India equivalent of the retail and wholesale sectors from taxes imposed on people selling only locally-produced goods, and (ii) allowing them to make 10% profits as opposed to the 5% cap for local business. Offsetting this, he recommended a 20% ad valorem tariff — coincidentally, almost identical to the 18.3% “simple average applied” tariff the WTO reported for India last year — with the uncharacteristically sentimental exceptions of duty-free treatment for goods meant for weddings, dowries, and religious occasions.
(c) Export policy: Here Kautilya is cautious, apparently reflecting the relatively poor information available to rulers about foreign markets and likewise the high level of physical risk involved in moving valuable stuff past the border. Kings should authorize exports, he says, but only careful investigation shows that (i) their likely selling price would bring a profit after netting out the costs of shipbuilding, harbor and/or road fees, tariffs, and payoffs to royals in the receiving kingdom, or (ii) that exports would bring some other (unstated) “economic, political, or strategic” advantage. He forbids exports of metals, armor, weapons, or other national security assets, and advises a strong armed guard for outbound caravans.
The WTO’s Tariff Profiles 2022 catalogs tariff rates in 145 countries and economies around the world. These can go into great detail — simple average bound, “non-agricultural,” peaks, etc. A first approximation (using “simple average applied”) looks like this, with Iran and Sudan as the highest-tariff countries in the list (and perhaps the world) to Hong Kong and Singapore among five zero-tariff economies:
… Or direct to a count of anti-dumping penalties by country, each year from 1995-2022 and with the full 28-year totals.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
Paul Bledsoe, Strategic Advisor at the Progressive Policy Institute (PPI), released the following response in reaction to the permitting reforms included in the reported agreement-in-principle to raise the debt ceiling.
“PPI supports the permitting reforms included in the budget agreement, including tighter deadlines for environmental impact statements, designation of lead agencies, and other improvements we recommended in PPI’s major report on permitting reforms last fall. We therefore urge adoption of these reforms by Congress.
“But far more extensive reforms will be needed to expedite the thousands of new energy projects that are pending approval, and to reduce both consumer costs and emissions in the long-term. These reforms include provisions to more quickly and cost-effectively build large electric power lines, natural gas and other pipelines, wind and solar projects, advanced nuclear power, electricity storage, and many other energy technologies. We look forward to working with Congress and the Administration to pass these additional and urgently needed reforms into law.”
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
It was a perfect spring Sunday in Kyiv and the city’s cafés were filled with people laughing in the sunlight.
Inside the Pinchuk Art Centre, the mood was different — quiet, focused, somber — but it too was filling with visitors eager to see an exhibition of works by young Ukrainian conceptual artists.
Their pieces were mostly responses to the war, many steeped in pain and loss.
Yet of all the places, people could be spending a spring Sunday in a country at war, these visitors were choosing a museum.
Ben Ritz, Director of the Progressive Policy Institute’s Center for Funding America’s Future, released the following statement on the reported agreement-in-principle to raise the debt ceiling:
“Congress should immediately pass the debt limit increase and budget compromise negotiated by President Biden and Speaker McCarthy.
“On the one hand, this package does not represent our ideal policy. The decision to freeze spending only on domestic discretionary programs is backwards. This part of the budget funds critical long-term public investments in infrastructure, education, and scientific research. Meanwhile, taking both increased revenues and any cuts to other programs that comprise 85% of non-interest spending off the table in negotiations leaves our budget on a clearly unsustainable path. It is, at best, a punt on tackling our fiscal challenges.
“But on the other hand, this compromise is currently the only plausible way to take the threat of defaulting on the national debt off the table for the remainder of President Biden’s first term. Congress must pass it now, and in the future, lawmakers should seek out a better mechanism for encouraging fiscal discipline without calling into question our government’s constitutional obligation to repay its debts.”
PPI has consistently condemned the GOP’s efforts to take the full faith and credit of the United States hostage to extract ideological policy concessions. It has also supported the bipartisan Responsible Budgeting Act to end debt limit brinkmanship and create more sensible mechanisms for encouraging fiscal discipline.
PPI’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. It tackles issues of public finance in the United States and offers innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Despite its role in supporting a $7.1 trillion transatlantic digital economy, the legal mechanism which allows for U.S.-EU data flow continues to face a high level of scrutiny by the European Union. The result has been the excessive targeting of American companies which — in order to preserve the ability of American businesses to operate in European markets at all — must be swiftly addressed by the Biden Administration by carrying out the steps outlined in President Biden’s October 2022 Executive Order.
A decision by the European Data Protection Board this week creates a fresh sense of urgency for implementing a new U.S.-EU data flow agreement. Following an inquiry into American company Meta’s compliance with European data protection standards, the Board ordered Meta to cease data transfers between the U.S. and EU. It also levied a retroactive fine of 1.2 billion euros for the period in which data transfers were occurring under a legal mechanism that, until this decision, had been deemed valid by the EU.
The decision further complicates an already tricky legal landscape for companies that transfer data across the Atlantic. Prior to 2020, American businesses relied on the Privacy Shield agreement to legally transfer personal data compliant with EU law. But that year, the EU’s Court of Justice declared the Privacy Shield to be invalid. Among other concerns, the Court held that the agreement gave too much leeway to the U.S. government to access data while failing to provide European citizens with appropriate redress should they want their personal information erased. This decision left more than 5,300 companies, large and small, which relied on the agreement, to conduct transatlantic trade without a clear path to compliance with the EU’s data protection rules.
However, the 2020 decision did leave intact the ability for companies to use an alternative legal mechanism called Standard Contractual Clauses (SCCs) — pre-approved, standardized data protection clauses in compliance with the EU’s data privacy law, GDPR. Though the Biden administration wants to replace the Privacy Shield with an updated Data Privacy Framework, a deal negotiated with the European Commission in March 2022, SCCs have provided a legal means for businesses to continue data transfers in the meantime. Still, it is essential that the Framework be quickly implemented so that the United States can receive an adequacy decision from the EU, which would provide a broad legal basis for data transfers between the United States and the EU, rather than relying on a business-by-business basis.
That’s why this week’s Meta decision is so troubling. The European Data Protection Board determined that the SCC mechanism failed to address the risks to the fundamental rights and freedoms of data subjects identified by the Court of Justice in striking down the Privacy Shield. This creates a monumental risk for other American companies, thousands of which currently engage in data transfers supported by SCCs. Though Meta was the first to face investigation, this decision opens the door for a litany of ex-post fines for adhering to agreements that are currently recognized by the EU as valid.
Equally troubling is the potential impact on the European digital sector. The Court’s decision continues a pattern of layer after layer of new EU regulations that seem almost intentionally designed to discourage U.S. digital companies from investing and operating in Europe. But in the modern global economy, cross-border transfers of innovation and risk capital are essential for boosting productivity growth. From this perspective, systematic barriers to transatlantic data transfers will likely undercut tech innovation in Europe, with no evidence that the regulation of American companies has spurred growth of European tech firms.
Making matters worse is that this decision makes it unclear whether any company using SCCs is acting in compliance with GDPR, since the issues cited are a matter of the United States’ lack of data protection laws and concerns about the intelligence communities’ access to personal information. This means any company currently transferring personal data to and from the EU could be exposed to large ex-post fines.
There are immediate actions that could be taken by the Biden Administration to address this risk. In October, President Biden signed an Executive Order outlining steps the U.S. must take to implement U.S. commitments under the proposed European Union-U.S. Data Privacy Framework. Given this week’s decision by the European Data Protection Board and its severe implications for American companies, the Biden Administration must prioritize the implementation of the Framework. Without U.S.-EU data flows, we risk a fractured global market for digital services and the deterioration of U.S. companies’ ability to participate in transatlantic digital trade.
It was an unmarked, unprepossessing building on the outskirts of Zaporizhzhia, a dusty industrial city in the heart of Ukraine that is all but sure to see intensified fighting when Kyiv’s anticipated counteroffensive begins. The wounded soldiers were crammed into a warren of tiny rooms, but the trio of musicians, also fighting-age men in fatigues, found places to stand between beds and began playing—first a rousing song with dirty lyrics making fun of Russians, then a string of haunting ballads full of melancholy and longing.
The hospital was the first stop on a two-day trip I took earlier this month with Cultural Forces, a collective of Ukrainian entertainers now devoting themselves full-time to boosting morale on the front lines. A world away from the Hollywood stars who entertained mass rallies in World War II Europe and Vietnam, Cultural Forces sends a handful of soloists—on my trip, an acoustic guitarist, a violinist and a keyboard player, plus two amateur poets—to play in gritty, intimate settings like hospitals and mess halls.
