Afghanistan has fallen, for the second time, to a brutal band of Islamist fundamentalists with medieval views about how people should be governed. That’s a tragedy for Afghans who want to live in the modern world — including many girls and women, ethnic and religious minorities, educated professionals, journalists and civic activists, as well as those who worked with the United States and our allies to establish a capable national government.
That long, costly experiment in nation building has collapsed with sickening speed, and bitter recriminations fill the air. No wonder, given the thousands of U.S. and allied troops killed or wounded, and the $2 trillion taxpayers poured into a noble if losing cause.
But amid all the facile finger-pointing and instant historical revisionism, let’s try to keep three basic facts in mind.
Last night, the Progressive Policy Institute, based in Washington, D.C., and the McKell Institute, based in Sydney, Australia, hosted an event focused on global technology and democracy, featuring U.S. Representative Joe Courtney (CT-02), and the Hon. Ed Husic MP (Australian Labor Party).
The event, titled “Global Tech, Global Democracy: How Has Tech Broken Down International Boundaries?” focused on how the U.S., Australia, and their international partners can develop international solutions to ensure that we benefit from technology’s promise while avoiding its dangers. The lawmakers and an expert panel discussed civic integrity, the importance of combating online misinformation, protecting freedom of speech, and the role tech has played in elections.
Watch the twitter livestream here:
Representative Joe Courtney is a Democrat representing Connecticut’s 2nd Congressional District, and is the Co-Chair of the Friends of Australia Caucus. He serves on the House Armed Services Committee and the Education and the Workforce Committee.
The Honorable Ed Husic is a member of the Australian House of Representatives for Chifley and a member of the Australian Labor Party. He is the Shadow Minister for Industry and Innovation.
They were joined by an expert international panel on technology innovation, including Sunita Bose, Managing Director of DIGI, Damian Kassabgi, Executive Vice President, Public Policy and Communications, of Afterpay, and Mike Masnick, Editor of TechDirt. The event was moderated by Michael Mandel, Chief Economic Strategist at PPI and Michael Buckland, President of the McKell Institute, and featured welcoming remarks by Alec Stapp, Director of Technology Policy at PPI.
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 McKell Institute is a progressive research institute based in Sydney, Australia, dedicated to providing practical and innovative solutions to contemporary policy challenges. Since its establishment in 2011, the Institute has played an important role in shaping the public policy agenda at both state and federal level. Learn more about the McKell Institute by visiting mckellinstitute.org.au.
Today, the Progressive Policy Institutehosted a virtual event with U.S. Representatives Ami Bera (D-CA) and Gerry Connolly (D-VA), and MEP Reinhard Bütikofer (Germany, Greens/European Free Alliance group). The event focused on how to craft a stronger transatlantic response to China as Beijing advances Chinese influence around the world.
“Following on President Biden’s visit to Europe, PPI is facilitating conversations between leading U.S. and European policymakers on how to present a unified transatlantic response to China’s multifaceted challenge to liberal democracy. Today’s conversation focused on China’s suppression of freedom in Hong Kong, ethnic cleansing of the Uighur minority, predatory trade practices, and attempts to steal or force transfer of advanced technology to Chinese companies. It’s another sign that leading democracies are determined to resist China’s divide-and-conquer tactics and aggressive efforts to silence international criticism,” said Will Marshall, President of PPI and moderator for the event.
Watch the event livestream here.
Representatives Bera and Connolly are both members of the House Foreign Affairs Committee. Additionally, Rep. Bera serves on the House Committee on Science, Space and Technology. Representative Connolly also serves on the House Committee on Oversight and Reform.
MEP Bütikofer is a member of the German Green Party. He chairs a European Parliament committee focused on EU relations with China, and has been the leading voice in Brussels for a tougher European response to China. He serves on the Committee of Industry, Research and Energy, and is a substitute member of the Committee on Foreign Affairs and the Subcommittee on Security and Defense.
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.
During his recent trip to Europe, President Biden stressed that the world’s liberal democracies are locked in a “strategic competition” with China for economic and political leadership. The United States and Europe need to forge a united front to meet the multifaceted challenge from China, including economic nationalism and predatory trade practices; harsh domestic repression of individual liberties and human rights; militarization of the South China Sea; and Beijing’s aggressive attempts to intimidate and silence critics around the world.
Please join the Progressive Policy Institute for a timely dialogue between key U.S. and EU policymakers on how to craft a stronger transatlantic response to China. Speakers include U.S. Representatives Gerry Connolly (VA-11) and Ami Bera (CA-07), both members of the House Foreign Affairs Committee, and MEP Reinhard Bütikofer of the Greens-European Free Alliance Party. Butikofer, who chairs a European Parliament committee focused on EU relations with China, has been the leading voice in Brussels for a tougher European response to China. PPI President Will Marshall will moderate the conversation.
Panelists:
Rep. Gerry Connolly, U.S. Rep VA 11th District, serves on the U.S. House Committee on Foreign Affairs and the U.S House Committee on Oversight and Reform.
Rep. Ami Bera, U.S. Rep CA 7th District, serves on the U.S. House Committee on Foreign Affairs and the U.S. House Committee on Science, Space and Technology.
MEP Reinhard Bütikofer, German Green Party Member of European Parliament, serves on the Committee of Industry, Research, and Energy, is also a substitute member of the Committee on Foreign Affairs and the Subcommittee on Security and Defense.
Moderated by Will Marshall, President, Progressive Policy Institute
It’s rare when a single acquisition can offer insight into two different important questions in innovation. But the proposed purchase of cancer-diagnostic developer Grail — a startup with tremendous potential — by gene-sequencing leader Illumina is just that pivotal. First, is it pro-innovation for European antitrust regulators to have the power to block a deal involving two American biotech companies that do no substantial business in Europe? We argue that such “regulatory imperialism” by the EU has the potential to slow down biotech innovation, especially given the region’s generally lagging performance in biotech (BioNTech notwithstanding).
Second, under what conditions is vertical integration a socially beneficial strategy for accelerating innovation? Successful innovation in the biosciences often combines risk-taking by small companies with the development and regulatory resources of larger companies. We conclude that excessive antitrust focus on blocking vertical integration in the biosciences could impede the development of important new products and treatments.
These issues go far beyond Illumina and Grail. But it’s helpful to have the facts about this particular case. Grail has spent the past five years developing a diagnostic capable of screening for 50 different cancers at once — a test set to launch this year — while Illumina makes the hardware that performs those tests. Illumina offered to buy Grail, with the idea of integrating Grail’s technology with its own, to simplify the process of using gene sequencing for clinical diagnostics on a massive scale. If successful, this would dramatically reduce the cost of performing cancer screenings.
The Federal Trade Commission (FTC) intervened to block the acquisition, worried that Illumina would block potential competitors of Grail from using its gene sequencers. Illumina promised to supply these competitors with gene sequencing equipment and supplies without price increases. The FTC, through a complicated series of maneuvers that are not relevant to this paper, temporarily pulled back from its intervention to allow the European Commission to take the first swing at blocking the acquisition. The EU antitrust regulators are planning to rule by July 27 on whether to clear the merger.
And here’s where we come to the first issue: Should the EU antitrust regulators be considering a biotech deal that by the ordinary rules would not come under their jurisdiction? As the Wall Street Journal notes, “Since the merger doesn’t qualify for antitrust review under the bylaws of the European Union or any member states, the Commission asked countries to invoke Article 22 of the EU’s Merger Regulations. This rarely used provision allows countries to refer transactions to the Commission when their governments lack jurisdiction.”
This fits the general EU strategy of “regulatory imperialism.” Rather than focusing on innovation, the EU has tried to position itself as the global leader in regulation in a variety of areas, from artificial intelligence to chemicals to GMOs to data privacy. The European approach to regulation has been framed by the precautionary principle, which puts less weight on the benefits of innovation and more on the potential harms.
That risk-avoiding approach is one important reason why Europe has consistently lagged in biotech. European biotech is not nonexistent — after all, Pfizer partnered with a German biotech firm, BioNTech, to develop a very successful COVID-19 vaccine. Nevertheless, data from the Organisation for Economic Co-operation and Development shows that business spending on biotech research and development (R&D) in the EU comes to roughly one-third that of the U.S.
Tacitly accepting European jurisdiction over American biotech deals has the potential to slow down commercialization of important technologies. According to the New York Times, Europe has been “a world leader in technology regulation, including privacy and antitrust.” In a recent speech, Emmanuel Macron said that during its turn at the helm of the EU presidency, France would “try to deliver a maximum of regulation and progress.” When the EU sets the global standard on regulation and companies choose to comply with it everywhere (even where standards are lower), that’s known as the “Brussels effect.”
First, on privacy, the General Data Protection Regulation (GDPR) has become a de facto floor on policy for many large multinational companies. The problem for companies — especially in biotech and software — is that there are very high fixed costs to product development (and low marginal costs for distribution), and reworking a product for a different regulatory environment is often more trouble than it’s worth. That leads to a race to the top (or bottom, depending on your perspective) in terms of regulation.
In its first few years in effect, GDPR’s flaws have become manifest and EU policymakers are starting to consider reforms to the law. According to a recent joint report from three academy networks, “GDPR rules have stalled or derailed at least 40 cancer studies funded by the US National Institutes of Health (NIH).” The authors go on to note that “5,000 international health projects were affected by GDPR requirements in 2019 alone.” This flawed model for privacy regulation has unfortunately been exported around the globe.
Second, mergers between globally competitive firms with a presence in multiple jurisdictions have to get clearance from multiple antitrust enforcement agencies. If a single agency in a large market objects to the merger, the deal might fall apart completely. For example, a merger between U.S.-based Honeywell and U.S.-based General Electric collapsed after the EU competition enforcement agency decided to block the deal out of concern it would create a monopoly in jet engines. Of course, the EU’s investigation of the Illumina-Grail merger takes that one step further, given the fact that Grail doesn’t conduct any business in the EU, and Illumina’s business there isn’t substantial, with revenues below the usual threshold for antitrust scrutiny for both the European Commission and individual countries.
The next important question raised by the Illumina-Grail purchase is the role of vertical integration. We start with the simple observation that innovating in complex systems is both risky and expensive. That’s true in frontier industries such as electric vehicles and e-commerce, and it’s especially true in the biosciences, with the high hurdle set by the need for safety and efficacy.
The cost to bring a drug to market is a huge barrier for startups to remain independent. A 2020 paper in JAMA examining 63 of the 355 new therapeutic drugs and biologic agents approved by the U.S. Food and Drug Administration between 2009 and 2018 found that the median capitalized research and development cost per medicine was $985 million. Other studies using private data have found even higher figures. A 2019 study published in the Journal of Health Economics estimated the average cost to reach approval at $2.6 billion (post-approval R&D costs nudge the total up to $2.9 billion).
Should these complex systems be built by one company, which is better able to integrate all the pieces of the puzzle? (Tesla comes to mind when we are discussing electric vehicles). Or is it better to distribute the risk over multiple companies? The biotech industry has mostly followed this second strategy. Risky R&D is done by small firms with financing by high-risk capital such as venture firms. Then the resulting product, if successfully passing clinical trials, is acquired by a larger firm for commercialization.
In some cases, both strategies are important. The initial stages of research and development of a new idea are farmed out to a smaller company and financed by risk capital. And then when it comes time to build the idea into a complex system, the actual integration is done by a larger company, which has an established distribution network and marketing resources for reaching patients in a targeted fashion. This can greatly accelerate the development process.
The question, then, is whether this integration would be easier within one company or at arms-length. Illumina has made an offer to buy Grail, which was originally spun off from Illumina in order to get funding from risk capital. The goal, obviously, is to accelerate the development of this game changing integration.
The FTC has objected to the acquisition, because the agency worries about Illumina prioritizing its internal customer over other potential cancer diagnostics systems. Certainly, it’s true that some vertical mergers are anti-competitive. “Killer acquisitions” are one type of merger in biotech that is anti-competitive in nature. A recent paper from Ederer, Cunningham and Ma found that between 5% and 7% of acquisitions in the pharmaceutical industry are killer acquisitions, meaning the incumbent firm purchased the startup with the intention of shutting down one or more of its products, because the legacy company offers a competing product that is more profitable.
There is increasing agreement among regulators on both sides of the Atlantic that acquisitions — especially in the pharmaceutical sector — need to be scrutinized more closely if products have the potential to be killed off post-acquisition. One heuristic a regulator might use is to look at how much overlap there is between the acquired product and the incumbent, especially in terms of benefits and use cases. If the incumbent’s product is still on patent, then there is a significant incentive to acquire a competitive product that might be disruptive to an acquirer’s portfolio and shut down the new product.
But there’s little evidence that most vertical acquisitions are anti-competitive. Vertical mergers — or the combination of two companies at different layers of the supply chain — are less likely than horizontal mergers — acquisition of a direct competitor — to be anticompetitive as both economic theory and empirical evidence show. Regarding the theory, firms are engaged in “make or buy” decisions all the time. If they choose to produce an input in-house instead of buying it from the market, then they have vertically integrated (either by developing the capacity on their own or by acquiring another firm with that capacity). Prohibiting firms from vertically integrating via acquisition would forgo some of the benefits of economies of scope and economies of scale. A literature review by Lafontaine and Slade showed that vertical mergers were procompetitive on average.
One of the most common reasons vertical mergers are less suspect than horizontal mergers has to do with “double marginalization.” If you assume two products are monopolies in their respective markets, then the producers of those products will each charge the monopoly price, which is higher than socially optimal. If the two products are complementary, then the companies can merge and create a positive sum scenario by lowering prices. Lower prices reduce deadweight loss, which is good for consumers, and lead to higher profits for the combined firm.
We note that if the FTC ruling stands, it will mean that developers of complex integrated systems will choose to keep their technologies in house rather than spinning them out and run the risk of having an acquisition blocked. And innovative development will be slowed rather than accelerated.
To many Americans, especially Democrats, Boris Johnson is a clownish British version of former President Trump. But Democrats might take a page from Johnson, especially on how to talk to people.
The party is going through self-analysis now. Yes, President Biden beat Trump and Democrats won a 50-50 split in the Senate. But they’d hoped to do much better; they want to get to the bottom of why the bottom fell out on their high hopes.
Democrats being Democrats, they think they need a stronger economic-policy message – and the right set of policy proposals.
Not so fast. There’s a reason most people avoid economics classes in school. Economics is boring. Economic policy proposals are boring.
Americans want specifics, but they yearn for hope and optimism. They’re listening more for tone: confidence, strength and persistence. They want to hear music, not just read lyrics.
Boris Johnson gets it. He says his goal as Prime Minister of the United Kingdom is “to recapture some of the energy and optimism that this country used to have.”
Democrats could use more energy and optimism – and less hectoring and lecturing.
Biden and Boris
Johnson’s style is analyzed in a new article in The Atlantic, “The Minister of Chaos: Boris Johnson knows exactly what he’s doing,” by Tom McTague. He wrote of Johnson, “To him, the point of politics—and life—is not to squabble over facts; it’s to offer people a story they can believe in.”
Johnson led the Brexit “Leave” campaign in 2016, just before Trump won the Presidency. McTague notes that the “two campaigns looked similar on the surface—populist, nationalist, anti-establishment.”
But Johnson’s story isn’t the same as Trump’s “American carnage.” Johnson says the UK, contrary to “claims of impending disaster…is a great and remarkable and interesting country in its own right’.”
Johnson is a former journalist. He knows the power of words. He says, “People live by narrative. Human beings are creatures of the imagination.”
The article added:
“Johnson understands the art of politics better than his critics and rivals do. He is right that his is a battle to write the national story, and that this requires offering people hope and agency, a sense of optimism and pride in place. He has shown that he is a master at finding the story voters want to hear.”
Writing the national story is the challenge Democrats face. Studying the UK makes sense; we share a mother tongue.
At this month’s G7 meeting in Cornwall, England, there was much talk about the “special relationship” between the US and the UK. There also has been, over the last 40 years, a rhythmic relationship between the two nation’s politics.
Ronald Reagan and Margaret Thatcher, both conservatives, came to power at the same time. So did New Democrat Bill Clinton and New Labour Tony Blair. Then came Trump and Johnson. Now Biden and Johnson.
Despite their parallels, Johnson isn’t a Trump clone. At the G7 meetings, he and President Biden agreed on climate change, women’s rights, sanctions against Russia and a middle-class economic agenda. Johnson’s compared Biden’s infrastructure bill to his promise of “leveling up” the economically struggling north of England with the more prosperous south.
He said, “When it comes to building back better, we’re totally on the same page. It’s been very interesting and very refreshing.”
As Democrats struggle to tell their story in today’s divided America, they might study how Johnson tells his. Sometimes he might be a clown. But sometimes clowns are on to something. And given today’s angry politics, it wouldn’t hurt to laugh and lighten up a bit.
As President Biden meets with European Union leaders in Brussels and Russian President Vladimir Putin in Geneva, the EU and U.S. determination to reduce greenhouse gas emissions remains high on the agenda. Yet, as part of it, a Cold War-style contretemps has flared up, centered on whether U.S. or Russian natural gas exports are cleaner in helping the EU eliminate coal and cut its climate emissions.
President Putin recently asserted, without providing any evidence, that Russian natural gas exports are low-emitting. American officials, including Energy Secretary Jennifer Granholm, contend Russian gas is the “dirtiest form of natural gas on Earth.” While offering no new analysis of Russian gas, the Biden team has provided detailed data on U.S. gas emissions.
Getting to the bottom of these claims is crucial to informing Europe’s way forward on the role of gas imports in meeting growing electricity needs while also achieving aggressive near-term climate goals. Accurate data on gas emissions should also influence the EU’s broader climate and geopolitical strategy during its clean energy transition, including any role for the nearly completed Nordstream 2 gas pipeline from Russia to Germany.
The Russian government has systematically prevented measurements of emissions from its gas sector for many decades. What evidence there is suggests Russia operates a leaky, antiquated, unregulated system with high fugitive emissions of methane of at least 5 to 7 percent of total gas volume. Since methane has 85 times the warming potency of carbon dioxide, natural gas with leaks or fugitive emissions during production and transport of more than 3.5 percent is worse than coal from a climate perspective. This means the EU’s single largest source of gas has significantly higher greenhouse gas emissions than the coal it is meant to replace.
Many climate advocates wish for an entirely renewable energy-powered EU electricity sector, but recent trends suggest that natural gas will play a major role in EU generation for years to come, since it stabilizes Europe’s power grid as increasing amounts of intermittent wind and solar power are used and current baseload power from coal and German nuclear energy is curtailed. In 2019, the last year of full pre-pandemic demand, natural gas was the largest source of electricity in the EU. More than 60 percent of EU gas was imported, with Russian gas providing about 45 percent of total EU gas.
A major 2019 study by the U.S. National Energy Technology Laboratory finds Russian gas piped to Europe has up to 22 percent more greenhouse gas emissions than European coal. U.S. liquified natural gas (LNG) delivered to the EU, in contrast, has up to 56 percent fewer total emissions than EU coal, the report shows. Overall, natural gas production in the United States has fugitive emissions of 1.4 percent of total gas volume, according to analysis from the Environmental Protection Agency done during the Obama administration.
The U.S. is also acting to lower methane emissions from its gas still further. Congress recently voted to restore Obama-era methane regulations former President Trump had repealed, mandating 45 percent economy-wide methane reductions below 2012 levels by 2025, and requiring oil and gas companies to check every six months for methane leaks and plug them within one month. The Biden administration has committed to even deeper methane cuts, particularly from oil and gas development — and proposed a crash $16 billion program to plug unused or abandoned gas wells and limit gas flaring. The EU imported 36 percent of U.S. LNG gas in 2019, although from a very low baseline, and even higher amounts last year.
A study by the European Parliament called “Energy as a Tool of Foreign Policy of Authoritarian States, in particular Russia” found Russia “uses gas supplies to punish and to reward….supply disruptions, price discounts or hikes, and alternative transit routes such as Nord Stream 2 and Turkish Stream, are used by Russia to further its foreign policy ambitions… The lack of transparency about Russia’s energy policy decisions contributes to this.” The study also analyzed the extraordinary reliance of Moscow on the European market for funding its autocratic government, “One-third of Russia’s natural gas production is exported. Almost all of which, some 87% in 2016, goes to Europe.” More than 40 percent of the Russian government budget comes from oil and gas exports revenues.
The EU, the world’s largest importer of gas, is clamping down on methane, too, and by the end of the year is expected to propose environmental standards. Those standards will initially apply only to gas developed within the EU, but may eventually include imports. In the meantime, the Nordstream 2 pipeline from Russian to Germany could be fully operational by the fall, with the potential to lock-in decades of methane-laden gas that will break the EU’s greenhouse gas emissions budget.
The EU should insist on uniform monitoring, reporting, and verification of natural gas emissions from all its import sources, procedures which over time should become the norm globally. The EU, U.S. and others should work together to standardize these measurements as quickly as possible. Otherwise, along with its already high geopolitical costs, the EU’s continuing addiction to high-emitting Russia gas will continue to weigh down Europe’s climate efforts, as well.
Paul Bledsoe is a professorial lecturer at American University’s Center for Environmental Policy and a strategic advisor at the Progressive Policy Institute. He served on the White House Climate Change Task Force under President Bill Clinton, as an Interior Department official, as well as a U.S. Senate and House of Representatives professional staff member.
Political trends in the United States and Great Britain often seem to move in parallel, and last week’s local elections across the United Kingdom yield some pertinent lessons for U.S. political parties.
For Republicans, the main takeaway is that competent governance matters. One big reason Britain’s Conservatives scored major gains on “Super Thursday” is that voters credit Prime Minister Boris Johnson with having done a good job of rolling out COVID vaccines.
In contrast, Donald Trump bungled the pandemic from start to finish in a clownish performance that his own pollster has cited as the number one reason U.S. voters denied him reelection in 2020.
For Democrats, the sad state of Britain’s Labour Party is a cautionary tale against what can happen to progressives when they abandon electoral pragmatism and indulge left-wing purists. The party seems unable to exorcise the ghost of ex-leader Jeremy Corbyn, the doctrinaire socialist who led the party two years ago to its worst drubbing since the 1930s.
The White House is currently considering whether to support a push to suspend drug companies’ patent rights to their Covid-19 vaccines. This is a delicate issue that requires policymakers to balance the importance of incentivizing medical R&D in the future against the need for a rapid vaccine rollout around the world — especially in developing nations. We need more manufacturing firepower, and the US can best unleash it by coordinating a global technology transfer through the purchase of the intellectual property and the creation of incentives for producers to share their know-how with the rest of the world.
The legal proceedings around this issue were triggered in October 2020, when India and South Africa circulated a World Trade Organization Trade-Related Aspects on IP Rights (TRIPS) petition calling for the intellectual property protections on Covid-19 vaccines to be suspended for the remainder of the pandemic. The movement has quickly gained momentum since.
More than 100 countries have signed on to the motion, some out of narrow concern with the pace of vaccine distribution in their country and others as a protest vote against a global IP regime they believe favors rich countries. But because WTO motions like this require unanimous approval from all members, the currently opposed group, which includes the US, EU, and the UK (not coincidentally the nations where the vaccine developers are located), is able to block the motion. In the last week or two, a group of House Democrats, with the support of Bernie Sanders and Speaker Nancy Pelosi, have started lobbying the Biden administration to switch course and support the motion.
The case for suspension:
The pro-suspension side is relatively straightforward. While wealthy countries have been able to receive quick access to the vaccine (indeed, near-miraculous progress compared to the normal vaccine creation timeline), deployment has been sluggish around the rest of the world and especially in developing nations. This is both a moral and a public health issue. It’s bad for people to die simply because they live in a country with fewer scientific resources. And the longer the virus hangs around, the higher the risk of a significant mutation that could restart the whole pandemic.
It’s difficult to project vaccine production timelines exactly, but a commonestimate from experts seems to be that many low-income countries won’t be fully vaccinated before the end of 2022. Others are more pessimistic, predicting immunity as late as 2024. Either way, that’s still quite a while away, and plenty of time for new Covid variants to emerge. Already we’ve seen the B.1.351 variant from South Africa poke holes in our defenses as it appears the AstraZeneca vaccine is significantly less effective against this strain. The Pfizer and Moderna vaccines still appear to offer good protection, but even they may see a small drop in effectiveness.
We can always create new vaccines or new booster shots to help address new variants, but the distribution map is going to be similarly skewed towards rich countries. A cycle in which rich countries continue to get vaccines (and booster shots) first but neglect to accelerate production sufficiently to cover poorer nations in time to prevent mutations is both patently unfair and self-destructive. We are in a race against time, and the costs of accelerating global vaccine production are measured in the billions whereas the benefits of reaching global immunity a few months earlier are measured in the trillions.
The World Health Organization and pharmaceutical companies have responded to this situation through the creation of COVAX, a pool of pledged vaccines specifically to help vaccinate low-income nations. This is an important program and the recent Biden investment of 4 billion dollars to the fund should be applauded. But the scope is still lacking in the necessary ambition. The aim of the program is to supply vaccines to help participating counties vaccinate only 20% of their population.
Ultimately, we need to be producing more vaccines in less time. One way of achieving that is to make it easier for competing vaccine manufacturers to get in on the action. Specifically, if there is latent vaccine manufacturing capacity (more on this controversial point later), we could pull out all the stops by suspending the intellectual property protections. This should help speed the vaccination efforts around the world, and if the latent manufacturing capacity is located in the Global South, it could make the future waves of vaccine booster shots more equitably distributed given the apparent home-market bias of current producers.
This last point connects to a larger question around self-sufficiency and national sovereignty in vaccine and pharmaceutical production. Much of this conversation is informed by the context of the HIV/AIDS epidemic of the 1990s to early 2000s which ravaged countries across Africa while the US and other wealthy nations were able to mitigate the damage using antiretroviral treatments. A combination of strict IP enforcement, a lack of foreign aid, and inadequate manufacturing capacity lead to millions of deaths that potentially could have been prevented. In 2003, the US created PEPFAR, an extremely successful public health campaign that was able to make massive dents in the crisis by sharing medicine and technical support with partner countries. To counter the concern that IP issues would hamstring future public health responses, the WTO signed the Doha Declaration which created rules around compulsory licensing of medical technology in the event of a public health emergency (but which advocates say are insufficient for this present situation). Given this history, developing nations are understandably skeptical of the idea that they should wait around for Western pharmaceutical companies to produce enough vaccines for them and would like to develop their own manufacturing capacity.
Finally, advocates for suspension typically point out that many of the pharmaceutical companies received R&D funding from the federal government and/or large market commitments through Operation Warp Speed, which guaranteed them some baseline level of confidence and profitability. Furthermore, the mRNA vaccines themselves are partially the result of decades of public investment in science, and indeed the National Institutes of Health may own some parts of the relevant IP in the case of Moderna. If you are inclined to believe that pharma R&D is mostly free-riding on the hard work of basic science, then this is a pretty clear-cut case for suspending the IP.
In short, we’re not safe from Covid until we are all safe. So let’s tear down any red tape or barriers that may be slowing the production and deployment of vaccines around the world.
The case against suspension:
On the anti-suspension side, there is the argument that these new vaccines (especially the new mRNA vaccines) required billions of dollars and decades of uncertain private investment to reach the technical breakthroughs that have given us a chance to end this pandemic. Yes, basic science work funded by the government helped a lot and established a strong foundation for much of this work. But enterprising individuals with a profit motive played just as large a role. Katalin Karikó, the Hungarian scientist who helped pioneer mRNA vaccines spent most of the 1990s receiving rejection letters for government grants and ultimately turned to the private sector where she co-founded her own company in 2006.
But even if all the basic research were federally funded, the argument for suspension would still create incentive issues. Operationalization and commercialization of scientific breakthroughs are essential and still cost a lot of money. There are a whole series of difficult engineering, logistics, and optimization problems that have to be solved when taking a complex biological product like a vaccine from research to reality. They do not pop out into the world fully formed from a peer-reviewed publication in Science. And it’s no accident that the countries with the most well-developed biotechnology and pharmaceutical clusters are the ones that produced these wonders.
Where most public health interventions failed miserably, the pharmaceutical companies worked around the clock to develop, test, and roll out a whole new genre of vaccine in record-breaking time and at high private cost. To expropriate the intellectual property that makes the whole investment pipeline worth it in the first place is to place future R&D investments under a great shadow. This is, unfortunately, unlikely to be the last global pandemic we face. And we got lucky that Covid-19 has a relatively low fatality rate and that we were able to so easily target its spike protein. To ensure that our biotechnology clusters are investing in R&D for new vaccine and therapeutic techniques for the future, we have to align incentives and make it profitable for them to throw billions of dollars at the problem years before it may ever appear.
Furthermore, all the focus on intellectual property conceals the point that the formalized information that can be written in a patent application isn’t that useful in isolation. Moderna actually pledged in October that they would not be enforcing the IP rights related to their Covid vaccine. And the underlying spike-encoding sequence was recently published online by Stanford researchers. However, no new Moderna knock-offs have sprung up since their October announcement. Why? Because the company has refrained from sharing any details about the manufacturing or design process, which indicates the underlying technical expertise and production process knowledge are just as important.
As Rachel Silverman from the Center for Global Development notes:
Observing their contents is insufficient to allow for imitation. Instead, to produce the vaccine, manufacturers need access to the developer’s “soft” IP — the proprietary recipe, cell lines, manufacturing processes and so forth. While some of this information is confidentially submitted to regulators and might theoretically be released in an extraordinary situation (though not without legal challenge), manufacturers are at an enormous disadvantage without the originator’s cooperation to help them set up their process and kick-start production. Even with the nonconsensual release of the soft IP held by the regulator, the process of trial and error would cause long delays in a best-case scenario. Most likely, the effort would end in expensive failure.
Typically this kind of soft IP is transmitted to the new company in a technology transfer process that happens during a licensing deal. Process experts from the licensing firm will sometimes travel to the facilities of the licensee and oversee operations for the first several batches to help convey the sort of tacit knowledge that is difficult to transmit unless you have physically done the operation yourself. In exchange, the licensing company will get a cut of the revenue from each dose, typically 5-10%. However, even when these licensing deals are in place, it’s easy for the new firm to make critical mistakes because the margins for error are razor-thin.
All this means that if the TRIPS proposal were passed in isolation, it would likely lead to little appreciable change in vaccine production unless it was paired with significant incentives for the manufacturers to play ball on the more formalized technology transfer process.
The open question: is there latent capacity?
Does this mean we are already at the frontier of vaccine production and there’s nothing more to be done? I doubt it.
In some sense, the easiest thing to do would be to plow many billions more into programs like COVAX, which reserves vaccine doses for developing nations. That would be good, but it may just extend the length of vaccine production rather than increase the rate of production. Maybe we could specifically help pay for existing vaccine manufacturers to scale up their capacity even more? This too, would be worthwhile. After all, it’s difficult to imagine having too much vaccine capacity (from a social welfare perspective). But even here, building new factories and machines can take months or years, and it would be nice to have something that works more quickly. Secondarily, this solution will only continue to concentrate vaccine production in existing firms and in rich nations, which undermines the self-sufficiency concern that helped fuel this debate.
The main advantage that some version of IP suspension offers is activating manufacturing capacity that already exists but isn’t currently being deployed. But how much latent capacity is there actually?
Especially for the mRNA vaccines of Pfizer and Moderna, it appears that the production bottlenecks are quite severe. A great piece by Derek Lowe outlines how specialized the supply chains and manufacturing processes for mRNA vaccines are, especially in their use of lipid nanoparticles. Lowe argues that only a handful of firms globally could have jumped in and started making mRNA vaccines immediately, and it seems likely that all of them already have.
However, this may be too fatalistic about the supply elasticity over a slightly longer time horizon. Production bottlenecks can ease over time with enough investment and learning by doing. Due to the massive social and economic costs we face during each additional day of this pandemic, even a slight increase in production can justify a significant price tag.
It seems more plausible, however, [I have no special expertise in vaccine manufacturing, so take this for what you will] that there is latent capacity using the more traditional adenoviral vector vaccines like Johnson & Johnson and AstraZeneca. Because adenoviral vector vaccines have the advantage of having simply existed for longer, more vaccine manufacturers around the world have the capacity to produce them than can produce mRNA vaccines right now. The related supply chains are more mature as well, which means a sudden surge in demand can be better accommodated. We saw this play out with the Serum Institute of India, the world’s largest vaccine manufacturer, which opted to take a voluntary licensing deal to manufacture the AstraZeneca vaccine at scale.
There may also exist capacity that is not exactly latent, but is not being used very efficiently. If an opportunity presented itself, we could see some vaccine manufacturers who are currently pursuing vaccine trials that will otherwise be late to the game drop their research trials and focus on producing known (and already approved) vaccines. Sanofi and GlaxoSmithKline, for example, began a phase 2 clinical trial in February that (if everything goes right) will finally be ready in Q4 of this year. There’s no particular reason to think this new vaccine will be better than the existing offerings. It’s more likely that they are pursuing this line because they know the vaccine rollout around the world will be slow and they want to have proprietary IP to offer. While both Sanofi and GSK have signed deals to help manufacture other vaccines in the meantime, these are quite limited and the companies are likely saving capacity so they can rapidly retool if their own trials are promising. But it would certainly be more socially valuable if we could encourage them to drop these trials and fully ramp up the production of proven vaccines right now. There are also companies like Merck that appear to be mostly sitting out the Covid vaccine rush altogether after their own efforts failed.
The case for buyouts:
The economist Michael Kremer wrote a paper in 1997 formalizing the idea of using patent buyouts as a way of maintaining strong incentives for innovation while still getting crucial information into the public domain ASAP. Essentially, a government could offer to pay the present value of the expected future revenue stream that would result from the temporary monopoly that a patent grants. While the patent-owning company or individual should be indifferent to the outcome, the general public could receive more value from having unabridged access to the information and the ability to modify it without permission before the patent expired. In these cases, a patent buyout can clearly improve outcomes for everyone, and Kremer notes that pharmaceuticals may be a particularly appropriate case.
Patent buyouts present at least a theoretical solution to the problem of maximizing the number of players that can legally produce vaccines while maintaining strong incentives for innovation in the future. Of course, in this situation it’s only partly about the intellectual property and partly about the manufacturing know-how that has to be transferred, which means we need a broader conception here — a full stack “technology buyout” which includes both the IP and the promise to transfer process knowledge.
Essentially, the US government (or conceivably a set of governments, but that would take longer to negotiate) could offer a lump sum payment to the accepting firm or firms to write down as much about the scientific and production process as can be made explicit and then make it publicly available. There could then be additional payments made for the sharing of tacit knowledge and aid in setting up the manufacturing operations either on an individual factory level, or on a per vaccine dose administered basis. The advantage of additional payments of a per vaccine dose administered basis is that it properly aligns incentives for the firm(s) sharing technology to maximize their impact by transferring to partners that can actually get shots into arms as quickly as possible and to make sure they do a good job.
To make this concrete and put some back-of-the-envelope numbers on this, I would suggest the initial lump sum payment to make the IP public would be in the range of $10-20 billion, and the additional per dose administered prize would be in the realm of $0.50 – $2. Assuming this program was able to administer vaccines for an additional 4 billion people (8 billion doses) across the developing world, we are talking in the range of $36 billion dollars.
And we should in some sense actively try to overpay. In unique situations like this, we should err on the side of overcompensating and risking some economic rents rather than inadvertently under compensating and hurting the long-term incentives for innovation. The most important thing here is that we do not kill the goose that lays the golden egg. In any event, we should be willing to pay an order of magnitude more than $36 billion to definitively end Covid, so this program should be a bargain under a wide range of potential cost assumptions. One estimate from a group of economists and public health officials ballparks the global cost of the pandemic at around $1 trillion per month.
Some readers may note that “payments for each vaccine dose administered” sounds very similar to the voluntary licensing agreements that manufacturers around the world have already signed. And they are correct, it’s a closely related mechanism. Indeed, commentators like Rachel Silverman (quoted above) have actually suggested that the best way forward may be having the federal government use its political leverage to lean on US pharmaceutical companies to accept more licensing deals with manufacturers in developing countries. Which raises the question, why bother doing the additional lump sum buyout to make the information public? Shouldn’t we concentrate all our efforts on encouraging licensing?
I would differentiate the technology buyout I’m suggesting from voluntary licensing on a few dimensions:
First, buying out the IP may be a determining factor for encouraging large, mature manufacturers like GSK and Sanofi to abandon their own duplicative vaccine trials and go full steam towards producing existing vaccines as it removes any competitive disadvantage in paying the licensing fee.
Second, because these voluntary licensing deals are typically assigned as a percentage of the dose cost, it creates an incentive for licensing firms to prioritize deals that will charge a higher price to the buying local governments where this may not be optimal. If the US government is instead paying for each dose administered in these developing nations, then the transferring firm(s) should be neutral with regard to the sale price.
Third, this structure allows the federal government to selectively overpay on a per dose basis if the US firm is genuinely helping a developing nation jumpstart new manufacturing capacity as opposed to helping an existing manufacturer retool.
Fourth, individual countries and foreign manufacturers know better their own capacity than US government officials or even US firms do, so opening up the IP could help identify latent manufacturing opportunities more effectively than a top down approach.
Fifth, opening up the IP at least gives every nation the ability to try and make their own vaccine if they so wish, which helps address the self-sufficiency concerns.
A buyout also presents several key advantages when compared to IP suspension as well, even putting the incentive issues aside.
First, speed. Even if the US were to reverse course and support the WTO proposal, it would take quite a bit of time to negotiate and wrangle all the other countries to the table. Remember, the proposal has to be supported unanimously, so there is no guarantee that the EU, UK, Australia, and other opposed nations will reverse course just because the US does. A buyout, in contrast, can be done unilaterally by the US (at least for the US based vaccine firms).
Second, in the unfortunate event that a new variant of Covid requires a booster shot, a buyout ensures the incentive to quickly create a solution (so that the new booster shot can also get bought out). Under the WTO petition, the IP suspension would remain in play for the duration of the crisis, which would reduce the urgency and resources that pharma companies are willing to throw at the problem, given fewer opportunities to recoup costs.
Building for the long term
Finally, there is the issue of whether a technology buyout would be better suited for the mRNA vaccines of Modena and Pfizer or for an adenoviral vector vaccine like Johnson & Johnson. To answer that we have to ask a more fundamental question: what is it we are trying to achieve here? There is likely more short term capacity to scale adenoviral vector vaccines, so if we are narrowly trying to get the world vaccinated against Covid-19 as quickly as humanly possible, then a technology buyout for the J&J vaccine probably makes the most sense.
But if we have a larger vision of using this crisis as an opportunity to bootstrap new, flexible vaccine manufacturing capacity around the world for the future, then mRNA vaccines have a host of advantages that will make them the better long-term pick. Of course, we can try to do both to take advantage of the distinct advantages of each vaccine type, but it helps to have a longer term anchor goal to build towards.
A few points in favor of the future oriented approach. First, hoping the adenoviral vector vaccines hold up long enough against possible variants is a significant risk. As alluded to earlier, the mRNA vaccines appear to be more resilient to the recent Covid variants and are significantly easier to modify in the event a new variant arrives that our current vaccines can’t handle.
Second, there have been a series of exciting news developments in the last few months indicating that mRNA vaccines could unlock a much broader wave of medical improvements, including possible vaccines for multiple sclerosis, some forms of cancer, malaria, and HIV. All of which means mRNA is likely to be a more general purpose vaccine technology and makes it almost impossible to imagine having overbuilt capacity at this point.
Third, separate from the supply chain issues, new mRNA facilities are actually much cheaper to build and operate than traditional vaccine factories. From an article in the Journal of Advanced Manufacturing and Processing:
Based on our techno‐economic assessment, the RNA vaccine production process can be two to three orders of magnitude smaller than conventional vaccine production processes in terms of facility scale, and can be constructed in less than half the time with 1/20 to 1/35 of the upfront capital investment… It therefore presents a strong advantage of requiring small‐scale, high‐capacity facilities, which can be constructed more rapidly and could make wide use of single‐use disposable equipment. Due to its small scale, the RNA vaccine drug substance production process could be placed in a small part of an existing conventional vaccine facility, for example in a room, and still produce more doses worth of drug substance than the entire original conventional vaccine production facility.
Fourth, we should view this as an opportunity to build good will around the developing world. The total US foreign aid budget was around $40 billion in 2019, right in the range of what we are proposing here. I’m inclined to believe sharing new, highly effective technology around the world during this unique crisis would generate a significantly higher return diplomatically than the projects we usually get with this scale of funds. Already we’ve seen China and Russia attempt to leverage their vaccine exports for diplomatic purposes. Indeed, another lens you could use for this would be as a kind of liberal counter-weight to the Belt and Road initiative that has helped China make inroads across Africa. Instead of physical infrastructure investment, the US would be helping them with technological infrastructure investment.
Finally, it is in the long-term interest of all of humanity to have a developed and coordinated ability to respond to new diseases around the world. Viruses don’t respect national borders and the risk of a global pandemic has only increased over time as our world has become more interconnected. This capacity inherently needs to be distributed around the world for it to be maximally effective, so we may as well start building it out now. On the high-end of effectiveness, this capacity to rapidly create and distribute new mRNA vaccines could help us eliminate much of the long term risk of bioweapons and natural pandemics. That is the true goal worth aspiring toward here.
Conclusion
The world needs more vaccines and we need them quickly. It seems unlikely that suspending the IP rights will do much to accelerate production in isolation and it could significantly diminish the incentives for investing in the future. On the other hand, a full technology buyout — which includes the IP rights and incentives to work with foreign manufacturers — could simultaneously activate any latent capacity that may exist while also giving the developing world an opportunity to bootstrap their own vaccine manufacturing capabilities with the help of American know-how.
The US should be aiming not only to vaccinate the entire world, but to teach the world how to make vaccines. As the famous saying goes: give the world vaccines and you stop one pandemic, teach the world how to manufacture mRNA vaccines and you stop pandemics forever.
The COVID-19 crisis initially affected the U.S. immigration system by prompting the shutdown of immigration courts and suspension of routine visa processing services. These actions were more or less in line with broader economic shutdowns and closures. The Trump administration, however, has seized on the COVID-19 crisis as a fresh pretext for enacting a cruel and radically restrictive immigration agenda that slows economic recovery, hurts the United States in the long-term, and is out of step with what Americans support.
In June, for example, President Trump announced an extension, through the end of the year, of his “temporary” ban on new work visas. This includes high-skilled workers, executives, and seasonal workers who are critical to U.S. innovation and growth. While small modifications to the order have been made—and lawsuits have been brought—it still places serious limitations on America’s ability to act as a magnet for talent. Immigrant workers already in the country have also faced disproportionate exposure to the pandemic at, for example, meatpacking plants, thanks to the administration’s lax approach to occupational safety.
The administration’s actions are bad policy at any time; today they make life even more difficult for immigrants and dig the pandemic-created economic hole even deeper. They also follow three years of immigration policymaking that has made our labor markets less flexible and our economy less dynamic and less innovative.
Yet it must also be said that America’s immigration system was not in the best shape even before the Trump administration’s detour into nativism and wall-building. Despite some progress made by President Obama, U.S. immigration policy had been growing misaligned with the nation’s changing economic needs. For progressives, the challenge is not merely to undo what Trump has done, but to make our economy more dynamic and resilient by bringing our immigration laws into the 21st century.
The key change is to make U.S. immigration laws more “demand-driven” and responsive to labor market needs as America ages, our workforce grows more slowly, and labor shortages hamper production from agriculture to high tech.
Two-thirds of green cards issued each year are for family reunification, with about one in six being employment-based. A large share of employment-based green cards, moreover, are issued to family members of workers. While family reunification is the broad superhighway by which most legal immigrants enter the United States, we also have an alphabet soup of visa programs which offer certain workers narrow routes of entry. There are, for example, nearly two dozen different types of visas for “temporary nonimmigrant workers.” Some of these programs function fairly well but taken as a whole they make work-based immigration unduly fragmented and complex, and subject to industry capture.
Family reunification should remain an important goal for U.S. immigration policy. Our country has a proud tradition of welcoming migrants and refugees as families as well as individuals. Many economically successful first- and second-generation immigrants that we celebrate—such as Sergey Brin, Elon Musk, and Steve Jobs—came here as children or students.
Nonetheless, the time has come to adjust the balance and widen channels for work-based immigration, making sure they more closely match employer demand and economic need. To shift our policies in this direction, PPI proposes to replace the welter of narrow visa programs with a new Willing Worker Visa that admits people regardless of the kind of skills they have as long as they have a valid job offer from a U.S. employer. In order to be valid, employers would have to show they could not meet their labor needs with native workers alone.
In addition to expanding the supply of legal workers and dramatically simplifying our immigration laws, our approach would crack down on employers who knowingly hire illegal workers. The Trump administration has focused instead on penalizing workers while letting employers off the hook—echoing the president’s own record of using illegal workers in his businesses.
Key elements of the Willing Worker Visa would include:
Simplification and consolidation of existing visa programs to make entry and certification processes far smoother.
Contingency on job offers from U.S. employers, just as many employment-based visas are now.
Expanded pathways for temporary and nonimmigrants workers to become citizens, in part to discourage and reduce illegal border-crossing.
Tying visas for willing workers to areas of demonstrated skill gaps and labor shortages.
Tougher penalties on employers who knowingly hire illegal workers, fail to check documentation, or ignore immigration law.
It may seem incongruous to argue for more employment-based immigration as the coronavirus pandemic continues to spread across the United States. Much of our economy is still locked down, we have double-digit unemployment, and there’s deep uncertainty about how long it will take the economy to recover.
Current projections are that unemployment rates will remain over 10 percent well into 2021. We know, however, that even at the height of the economic expansion in 2019, the U.S. economy faced severe skill shortages, with more than seven million jobs unfilled.
Moreover, Trump’s claim that he wants to restrict immigration to preserve U.S. jobs for
U.S. workers stems from a faulty, zero-sum understanding of how labor markets work. In
a dynamic market economy, the number of jobs is never fixed but grows with labor supply. We have a compelling national interest in opening America’s doors to willing workers from elsewhere who can help us close skills gaps and fill labor shortages.
The challenge is to ensure that unemployed native workers are successfully reabsorbed into the labor force while also ensuring a strong supply of willing foreign workers who help make the U.S. economy more productive and innovative.
British Prime Minister Boris Johnson’s thumping victory last week confirms that 2016 was a political watershed. It marked the beginning of a new political alignment that is rewriting the rules of party competition here and abroad.
That was the year voters stunned the UK political establishment by voting narrowly to leave the European Union. Then followed Donald Trump’s equally shocking election. Both votes highlighted new political divides based on culture, identity and geography, as well as the waning relevance of old left-right debates.
So far, conservative parties have adapted to this changing landscape better than progressive parties. That’s why it’s crucial that Democrats come to terms with why Britain’s Labour Party, led by Jeremy Corbyn, was routed last week.
Corbyn blames Brexit for his defeat, and it obviously played a big role. Johnson offered voters a simple, unequivocal message on Brexit — get it done so Britain can move on. Corbyn and Labour took an ambiguous stance, and managed to win only 40% of the parliamentary constituencies that backed Remain.
When British voters go to the polls Thursday, it probably will be their last chance to stop Brexit. If they don’t, Jeremy Corbyn will bear much of the blame.
Wait – isn’t the Labour Party leader running to oust the man actually driving the UK toward Brexit, Prime Minister Boris Johnson? Yes, but polls show Johnson’s Conservatives holding on to a double-digit lead over Labour. That’s remarkable, considering the sorry mess Tory leaders have made of Brexit over the last three years.
If Johnson has the electoral wind at his back, it’s not because he’s so mesmerizing. It’s mainly because of Corbyn’s epic unpopularity with UK voters. A mere 22 percent approve of Labour’s chief, while 58 percent say he’s doing badly. Thirty-six percent approve of Johnson, and 43 percent rate him negatively.
It’s hard to know what kind of foreign policy Americans want today. The evidence is mixed. On the other hand, what they don’t want is growing clearer every day—Donald Trump’s brand of self-dealing, morally vacant diplomacy.
After the president’s budget was released on Monday, House Budget Committee Chairman John Yarmuth (D-KY) called it “A Budget for a Declining America.” Unfortunately, that might be an understatement.
The Trump administration’s Fiscal Year 2020 budget proposalis a compilation of the worst ideas to come out of the Republican Party over the last decade. It would dismantle public investments that lay the foundation for economic growth, resulting in less innovation. It would shred the social safety net, resulting in more poverty. It would rip away access to affordable health care, resulting in more disease. It would cut taxes for the rich, resulting in more income inequality. It would bloat the defense budget, resulting in more wasteful spending. And all this would add up to a higher national debt than the policies in President Obama’s final budget proposal.
The most harmful aspect of Trump’s fiscal blueprint is its scheme for gutting investments in public goods that are core responsibilities of government. The administration proposes to reduce the share of gross domestic product devoted to non-defense (domestic) discretionary spending – the category of the budget that is annually appropriated by Congress and includes most federal spending on infrastructure, education, and scientific research – by more than half over the next decade. The result is deep cuts to all three of these important investments that provide the foundation for long-term economic growth.
By declaring a national emergency to build a border wall, President Trump has crossed the Rubicon. He has turned a cheap partisan stunt into a bona fide Constitutional crisis.
Congress this week declined to give Trump all the money he demanded to wall off Mexico from the United States. The president has declared an emergency explicitly to defy the will of Congress and usurp its Constitutional power to raise and spend public money. In his contempt for democratic norms, Trump makes no effort to conceal the fact that the alleged ‘emergency’ on the border is a political contrivance to assert his will. Having failed to extort wall funding from Congress through the longest government shutdown in U.S. history, he is willing to violate the Constitution to get a political ‘win.’
WASHINGTON—Ed Gerwin, Senior Fellow for Trade and Global Opportunity at the Progressive Policy Institute (PPI), today released the following statement in response to the introduction of the bipartisan, bicameral Congressional Trade Authority Act:
PPI welcomes the introduction of the Congressional Trade Authority Act by Representatives Ron Kind (D-WI) and Michael Gallagher (R-WI) and Senators Pat Toomey (R-PA) and Mark Warner (D-VA). We urge Congress to enact this responsible and balanced legislation.
The bill would amend the Trade Expansion Act of 1962 to provide Congress with new tools to oversee and either approve or reject the use of tariffs or other trade restrictions for national security purposes. Under the bill, national security trade restrictions proposed by the president would require congressional approval under an expedited, 60-day procedure. National security tariffs imposed within the past four years would also, retroactively, be subject to congressional review. Other reforms in the bill would include tightening the definition of “national security” to prevent the abuse of congressionally delegated powers to restrict trade for security reasons.
As PPI has explained in a recentpolicy brief, legislation like the Congressional Trade Authority Act is needed to restore an appropriate balance between Congress and the president in the exercise of trade and tariff powers.
Article I, Section 8 of the U.S. Constitution empowers Congress to “lay and collect . . . duties” and “regulate commerce with foreign nations.” For almost a century, in exercising these powers, Congress has delegated significant authority to the president, including the power to restrict import trade for national security reasons.
Past presidents have generally used these delegated security powers prudently. The Trump Administration has not. Instead, it’s imposed “national security” tariffs and quotas on imports of aluminum and steel from longstanding U.S. allies with scant security justification. And the President has threatened to impose “national security” tariffs—to be paid ultimately by American drivers—on imported autos, as well. As PPI has detailed, the Administration’s unfocused tariffs and trade restrictions have cost jobs for American workers, raised prices forAmerican families, increased costs for businesses and state and local governments, and led to crushing retaliation against American exports.
When he signed the Trade Expansion Act of 1962, President Kennedy advocated building stronger trade alliances and warned against “stagnating behind tariff walls.” At the same time, as PPI has explainedin the context of China’s technology theft, smart and targeted trade restrictions are sometimes required to address critical national security threats. Congress has crucial roles to play in both promoting open trade and protecting national security. The balanced reforms contained in the Congressional Trade Authority Act would help Congress better exercise these important responsibilities.
Biden and Boris
