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PPI’s Trade Fact of the Week: U.S. clothing tariffs are unfair to women

Posted on December 6, 2023October 30, 2024 by Max Sherrill

FACT: U.S. clothing tariffs are unfair to women.

**THE NUMBERS: Average U.S. tariff rates* for clothing by gender, 2022** –

Men’s	13.6%
Women’s	16.7%
No specified gender	12.0%

* Tariff revenue divided by import value. These calculations includes tariff revenue collected from both imports subject to MFN tariff rates, and from Chinese products subject to “301” tariffs (which often add 7.5% to existing rates). Import value includes clothing from MFN tariff sources, from China, and from countries exempted from tariffs under FTAs and trade preference programs.

WHAT THEY MEAN:

The House New Democrat Coalition’s eight-point trade policy plan — out last month from the NDC’s 11-member Trade Task Force, headed by Rep. Lizzie Fletcher (D-Texas) and co-chaired by Reps. Don Beyer (D-Va.) and Jimmy Panetta (D-Calif.) — has lots of ideas on digital trade, the China relationship, free trade agreements, farm exports, and more. Included in the NDC’s list is a hope to “advance equity in trade policy by considering solutions to reduce gender bias and regressivity in the tariff system.” Here’s some background on the gender piece:

Our Valentine’s Day Trade Fact last February pointed out the strange fact that the U.S. tariff system taxes women’s underwear more heavily than men’s. Examination of the tariff schedules and import data across the clothing universe over the past few months shows that this underwear diss of women is not a weird anomaly. Rather, it is a specific case of a larger systemic issue, which the NDC is very right to highlight: the tariff system in general taxes women’s clothing more heavily than men’s, imposing special charge on American women likely extracting above $2 billion per year. Here are the facts:

1. Tariff rates on average are higher on women’s clothes than on men’s: The U.S. Harmonized Tariff Schedule divides goods into 11,414 “lines,” each with a tariff rate. Chapters 61 and 62 cover clothes. Unique in the Tariff Schedule, they divide most clothes by gender and freely impose different tariff rates for similar items based on this division. For instance, men’s and boys’ cotton suit jackets under line 61033200 are taxed at 13.5%. The corresponding cotton jackets in the women and girls’ heading, at line 61043200, at 14.9%. More generally, 17 “headings” in Chapters 61 and 62 cover comparable clothes divided by gender: men’s overcoats, women’s overcoats, men’s “suits and ensembles,” women’s “suits and ensembles,” men’s “shirts and blouses,” women’s “shirts and blouses,” men’s underwear, and women’s underwear. Here are the tariff rates in 2017* for these items, derived by dividing total tariff revenue by import value:

	Men	Women
Overcoats	12.5%	13.7%
Suits	13.3%	15.1%
Shirts	17.0%	19.7%
Underwear	8.6%	12.8%

* Data is calculated using 2017 tariff revenue. The rates for 2022 would be higher, since additional tariffs on China have raised rates overall.

So in each category, tariff rates are higher on women’s clothes than on men’s. Combining all the categories, tariff rates on women’s clothing are on average 16.7%, 2.9 percentage points higher than the 13.6% average for men’s.

2. Free Trade Agreements Don’t Help Much and Might Accidentally Amplify Disparity: In theory, the U.S.’ free trade agreements and duty-free preference programs for developing countries should moderate and in some cases eliminate this disparity, by eliminating tariffs on both men’s and women’s clothes. In practice, though, FTAs usually have clothing “rules of origin” so complex as to make them difficult to use, meaning they have less impact than most probably guess. Overall, the 14 U.S. FTAs provide 10% of American clothing imports, and the “CBI” and “AGOA” programs, which waive tariffs on Caribbean- and African-produced clothing, another 2%. So about 90% of the clothing brought into the U.S. comes with full tariff payments. Since 96% of clothing sold in American stores is imported, that means the large majority of garments include tariff costs. And on top of this, a group of researchers from the U.S International Trade Commission found that the FTA countries in practice ship more men’s clothing than women’s, meaning that the FTAs are likely saving men more money than women.

3. Women Therefore Pay More than Men for Similar Things: What does this all mean in practice? Last year’s tariff payments totaled $4.7 billion on $31.1 billion worth of women’s clothes, and $3.1 billion for $24.2 billion worth of men’s clothes. Or, in more direct terms, markups and U.S. transport and overhead costs mean that the cost of an average shirt or coat roughly quadruples from arrival at the border to the cashier, the tariff system appears to be raising the price women pay for clothes, relative to men, by an average of an extra dollar per garment. Looking at this another way, a 2018 working paper from the U.S International Trade Commission concluded that the higher rates on women’s clothes — their finding, pre-“301” tariff, was 14.9% for women’s clothes and 12.0% for men’s — plus the fact that women on average tend to purchase more clothing than men, meant that buyers of women clothes shouldered an additional $2.77 billion in tariff burden than buyers of men’s clothes. Gender bias in the tariff system accounted for about $1.8 billion extra burden on buyers of women’s clothing as of 2015, and presumably somewhat more now.

Conclusion: In sum, the US tariff schedule explicitly taxes women more heavily than men for the same sorts of things. In doing so, it imposes a kind of gender surcharge of at least $2 billion a year. This appears to be the only federal tax in which rates differ based on gender. Our V-Day conclusion on U.S. underwear policy — “Seriously?! Boo! Do better! ???????????? — applies in this larger case too. And Rep. Fletcher and the NDC’s Trade Task Force earn enthusiastic applause for bringing this into the Congressional debate.

Special Note: Research and drafting for this Trade Fact by PPI 2023 Policy Fellow Elaine Wei.

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 ProgressiveEconomy 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.

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PPI’s Trade Fact of the Week: Working-class Americans on trade policy – no clear consensus on past agreements, little support for new tariffs, strong hope for training and apprenticeships

Posted on November 29, 2023September 18, 2024 by Max Sherrill

FACT: Working-class Americans on trade policy – no clear consensus on past agreements, little support for new tariffs, strong hope for training and apprenticeships.

**THE NUMBERS: “Effects of agreements to lower tariffs and other barriers on me and people like me,” among Americans with less than college education* –**

	Positive	Negative	Not much either way
Race & ethnicity
African American	42	13	44
White	25	40	35
Hispanic	33	29	39

Red v. blue
Self-described liberal	45	18	37
Self-described conservative	20	51	29

Youth v. age
18-29 years old	45	24	32
55-64 years old	20	46	34

PPI poll of Americans without college degrees, released November 2023

WHAT THEY MEAN:

PPI’s two 2023 polls, done this past September and October by YouGov, offer in-depth insights on working-class opinion in the United Kingdom and the United States. Some headline findings from the 46-question U.S. version show respondents –

• Are pessimistic about long-term trends, with 66% saying “the working class” has lost ground in the last four decades as against 21% “better off” and 13% “about the same,” with illegal immigration and automation of worksites the most frequently chosen explanations.

• Consider inflation the “most significant challenge facing the U.S. economy,” with 36% citing “high cost of living” and 33% “inflation” per se.

• View e-commerce and tech sector employment (44%) as the top career choice for young people, with less for government and military (14%) manufacturing (13%), and service-sector work (8%).

• Support activist (though not overbearing) government, with especially high hopes for programs that can help non-college workers build careers and enhance wages, especially via short-term training (46%) and apprenticeship (23%).

The poll’s four trade questions ask in various ways about the effects of past trade agreements and about future options. Three findings, on overall views, divergences by political orientation and demographics, and future options:

1. No Overall Consensus: Asked how “trade agreements to lower tariffs and other barriers have affected you and people like you,” respondents split among three options with a slight negative tilt: 29% positive; 35% negative; and 36% (the highest share) as “not much effect either way.” A similarly-worded question about the effects of past trade agreements “on our country” as a whole, as opposed to the respondents as individuals, drew a somewhat different response: 28%, about the same share as in the more personal question, responded positively; a noticeably higher 44% viewing the effects as negative; and “not much effect either way” shrank to 28%. This suggests a substantial group viewed trade agreements as having little impact on themselves or their communities, but being overall negative for the country.

2. Axes of Divergence: PPI’s poll shows working-class Americans splitting over trade along the same ideological, ethnic, and generational axes earlier trade polls (Pew, Chicago Council on Global Affairs, major news organizations) have found over the last decade for the population as a whole. That is, the working class’ center-left contingent is on balance positive about trade agreements, and its right more negative. To wit:

• Race and Ethnicity: African American respondents, among the most upbeat groups in the survey in this area, viewed the effects of past trade agreements as positive for themselves by 42%-13%. Hispanic respondents agreed, though by a less emphatic 33%-29%, while “other” ethnicities split 43%-34%. White respondents were the exception (though a big one, as they made up 70% of the respondents), splitting the opposite way with only 25% “positive” and 40% “negative.”

• Red v. Blue: Self-identified liberals and Democrats viewed the effects of past trade agreements “on yourself and people like you” as positive by 45%-18% and 39%-22% respectively. By contrast, 51% of conservatives and 49% of Republicans viewed past agreements as affecting themselves and people like them negatively.

• Youth v. Age: Young people view trade agreements quite favorably, with 18-29-year-olds on the “positive” side by 45%-24% and 30-44 year-olds by 32%-24%. Their Gen-X parents aged 55-64 were the survey’s least happy age group — 20% positive and 46% negative — and the over-65 boomers weren’t much warmer at 26%-41%.

Perspective from other surveys: These ideological and demographic divisions resemble those appearing in other surveys done for the population as a whole over the past two decades by Pew, the Chicago Council for Global Affairs, and the major news outlets. (PPI’s poll also echoes these in not finding big differences by gender.) While the positive/negative splits in the earlier polls can vary based on the wording of questions, the patterns have been consistent throughout the century: young, ethnically diverse, and liberal America is generally positive about trade and trade agreements, and older, white, and conservative America is less so. As an additional perspective on PPI’s results, the earlier surveys also often include breakouts by education level, and typically found more support for trade and trade agreements among college-educated Americans than non-college.

3. Toward 2024: Finally, the poll suggests that the policy option put forward by the Trump campaign this fall — a 10% global tariff and a sharp break in economic relations with China — is not popular. (The question does not mention Trump’s name or associate the option with his campaign, to avoid skewing the answers.) Asked to choose among three policies — this protectionist approach, a non-trade option in which future policy would focus on other issues such as energy and anti-corruption, and a renewed effort to reduce tariffs through agreements with allies and friendly countries — only 23% selected the Trump-like option. Especially unpopular among young people (14%), liberals and Democrats (9% and 11%), and African Americans (16%), this option didn’t elicit much enthusiasm elsewhere either, as the favored choice of only 26% of white voters, 19% of political independents, 20% of respondents in union households, and 38% of conservatives.

4. And where to from here? As earlier trade polls found for the American population as a whole, PPI’s poll of working America yields mixed views; a plurality of the electorate’s ‘blue’ side upbeat about trade agreements and the opposite on its ‘red’ side; and little support for new tariffs, while other sections of the poll underline this by showing high sensitivity to inflation. The answers don’t yield any simple ‘here’s what to do’ conclusion.

But another section of PPI’s poll may, indirectly, suggest a response. One way to view trade policy is as a branch of economics that creates complex choices which carry both benefits and stresses: export opportunities and competitive challenges, lower inflation but sometimes accelerated change in the job mix. The poll’s questions on labor policy does seem to find strong and in fact near-consensus views on how best to manage the stress. That is, rather than traditional ‘adjustment’ programs for competition or automation on one hand, or long-term college commitments on the other (or for minimal-government ideologies), the respondents express strong hope for a third activist approach which doesn’t now exist on a large scale: direct support for workers trying to build careers and raise their wages through easily available short-term training, certification, and apprenticeship programs. If workers have confidence they will receive support as the economy changes, and that it will be the kind of support they want, solutions to divisions – not only in trade policy but in other complex fields – may be easier to find.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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PPI’s Trade Fact of the Week: ‘American’ foods are the base of som tam, goulash, vindaloo, Swiss chocolate, and French fries

Posted on November 21, 2023September 18, 2024 by Max Sherrill

FACT: ‘American’ foods are the base of som tam, goulash, vindaloo, Swiss chocolate, and French fries.

THE NUMBERS: Sample agricultural commodities –

North America: Squash, pumpkins, blueberries, cranberries
Central America: Tomatoes, chocolate, vanilla, peanuts, chili peppers
South America: Cashews, potatoes, vanilla, corn, chilies, etc.

WHAT THEY MEAN:

The Thanksgiving holiday commemorates a specific event — a three-day autumn “entertainment and feast” held somewhere near Plymouth, a more conceptual reminder of mutual regard and common benefit among people of very different backgrounds, and also of western hemisphere food. Some examples of this 402nd observance week:

North America and Thanksgiving: Only two first-hand accounts describe the 1621 “First Thanksgiving,” and both are brief. Edward Winslow, Plymouth Governor several times in the 1630s, notes codfish and bass, plus corn and the five deer Massasoit and his 90 Wampanoag sagamores brought to the event. William Bradford, the first Governor, mentions ducks, turkey, and “meal” as well. Both are silent on cranberries and pumpkin pie, though that doesn’t mean they didn’t have any. Here’s Winslow’s report (via Pilgrim Hall Museum):

“Our harvest being gotten in, our governour sent foure men on fowling, that so we might after a speciall manner rejoyce together, after we had gathered the fruits of our labours ; they foure in one day killed as much fowle, as with a little helpe beside, served the Company almost a weeke, at which time amongst other Recreations, we exercised our Armes, many of the Indians coming amongst us, and amongst the rest their greatest king Massasoyt, with some ninetie men, whom for three dayes we entertained and feasted, and they went out and killed five Deere, which they brought to the Plantation and bestowed on our Governour, and upon the Captaine and others. And although it be not always so plentifull, as it was at this time with us, yet by the goodness of God, we are so farre from want, that we often wish you partakers of our plentie.”

And Bradford’s:

“They begane now to gather in ye small harvest they had, and to fitte up their houses and dwellings against winter, being all well recovered in health & strenght, and had all things in good plenty; fFor as some were thus imployed in affairs abroad, others were excersised in fishing, aboute codd, & bass, & other fish, of which yey tooke good store, of which every family had their portion. All ye somer ther was no want. And now begane to come in store of foule, as winter approached, of which this place did abound when they came first (but afterward decreased by degrees). And besids water foule, ther was great store of wild Turkies, of which they tooke many, besids venison, &c. Besids, they had about a peck a meale a weeke to a person, or now since harvest, Indean corn to yt proportion. Which made many afterwards write so largly of their plenty hear to their freinds in England, which were not fained, but true reports.”

Forty-one decades later, the turkey, cranberries, and pumpkins traditionally served for Thanksgiving remain New England and North American specialties. Crops, fruits, and roots originating further south have often spread more widely. Some illustrative lists, with two glamor products:

Mexico & Central America: The middle swath of the western hemisphere is home to the peanuts used in West African groundnut stew, the tomatoes flavoring Italian pasta sauce, and chocolate, vanilla, and corn. Chile peppers are still more “globalized”: the ancestral ones grew in Mexico (though there’s a case for Brazil too), and their descendants now routinely provide the spike for som tam in Khon Kaen, goulash in Budapest, bean curd in Chongjing, momo (usually in oil) in Lhasa, vindaloo in Goa, berbere in Addis Ababa.

Those looking for more heat this weekend than Bradford, Winslow, and Massasoit had in 1621 can consult the “Scoville Heat Scale” which, named for an early 20th century Massachusetts pharmacist, attempts to organize all the chili pepper varieties by heat content. It runs from zero Scoville Heat Units to two million in the case of artificially amped-up “bear spray equivalent” peppers bred over the last decade. Assuming these — Carolina Reaper, Trinidad Scorpion, etc. — are basically inedible stunts, sample Scoville ratings* from the feeble bell to the mighty habanero look like this:

Habanero	150,000
Thai prik kee nu	75,000
India byadgi	75,000
Ethiopian berbere	40,000
Ghanaian kpakpo	35,000
Peruvian Amarillo	35,000
Lhasa red pepper	23,000
Jalapeno	10,000
New Mexico “Hatch”	2,000
Paprika	500
Pepperoncini	100
Bell Pepper	0

* Using averages rather than the more technically correct range; the generally accepted range for the habanero, for example, is 100,00-350,000 Scoville units.

South America: Cash crops like cashews, staples like cassava and quinoa, and fruits such as avocado and pineapple. A nominee for the “most globalized” South American crop is the potato. Often disrespected with terms like “humble” (BBC) and “lowly” (Smithsonian Magazine), potatoes are the world’s sixth-most-produced crop at 376 million tons a year and root up in at least 150 of the world’s 197 countries. The top seven producers account for two-thirds of annual potato tonnage:

China	94 million tons
India	54 million tons
Ukraine	21 million tons
United States	19 million tons
Russia	18 million tons
Germany	11 million tons
Bangladesh	9 million tons

U.S. producers grow about 100 variants including russets, fingerlings, purple-blues, whites, and so forth. By comparison, farmers in the original Andean potato-cultivation areas manage 4,500. By volume, though, the U.S.’ 19 million tons are about three times the output of the 14th-largest producer Peru’s 5.7 million tons, and 39th-place Bolivia’s 1.2 million tons combined. Having been carried to Europe by Spanish entrepreneurs in the 1500s, the potato returned east across the Atlantic to be served boiled or mashed at Thanksgiving events that, though more complex than the impromptu 1621 event, still mean something similar.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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PPI’s Trade Fact of the Week: U.S. Internet policy is suddenly uncertain

Posted on November 15, 2023September 18, 2024 by Max Sherrill

FACT: U.S. Internet policy is suddenly uncertain.

**THE NUMBERS: U.S. export growth, 2012-2022*-**

Energy	176%
Information & “potentially digitally-enabled” services:	59%
All goods and services:	34%
Agriculture	34%
Manufactured goods:	19%
Other (non-digitally deliverable) services	-10%

*Sources: WTO for all goods and apparel; UN Food and Agricultural Organization for fish; Stockholm International Peace Research Institute (SIPRI) for arms sales. SIPRI data covers known transfers of “major conventional weapons.”

WHAT THEY MEAN:

A cryptic late-October comment from the American delegation to the World Trade Organization in Geneva quietly withdraws a set of long-held U.S. “digital trade” policy goals — and in doing so raises questions about whether the U.S.’ traditional “open internet,” “pro-consumer,” “internet freedom,” and “public-interest regulation” approach has changed. The brief and impressively opaque comment:

“Many countries, including the United States, are examining their approaches to data and source code, and the impact of trade rules in these areas. In order to provide enough policy space for those debates to unfold, the United States has removed its support for proposals that might prejudice or hinder those domestic policy considerations. The JSI [“Joint Statement Initiative”, the WTO’s name for the relevant discussion] continues to be an important initiative and the United States intends to remain an active participant in those talks.”

How to interpret this? Background first on the big picture, then the “data and source code” in trade policy more specifically; and finally, lacking anything more to go on than the three-sentence comment above, some questions about what this actually means:

1. Larger context: “Digital trade” issues are part of a larger U.S. policy pretty consistently pursued since the launch of the World Wide Web, meant to encourage the preservation and future development of an open, universal Internet, with a foundation in user rights and liberty, impartial public-interest regulation, and due process. Several digital trade issues get mentioned, for example, in the “Declaration for the Future of the Internet,” posted in August 2022 by the U.S. and 64 other Internet- and speech-friendly countries in the Western Hemisphere, Europe, Asia, Africa, and the Pacific and still up on the White House and State Department websites. This is a 3-page set of principles and goals for next-generation Internet governance, which along with promoting universal access, privacy, consumer protection, common programs to fight electoral disinformation and online bigotry, and other valuable ideas involves commitments to “ensure that government and relevant authorities’ access to personal data is based in law”, “promote our work to realize the benefits of data free flows with trust,” and “refrain from blocking or degrading access to lawful content, services, and applications.” These are, incidentally, contested ideas which have opponents: other governments, inter alia and perhaps most prominently China’s, envision a quite different future with more rights for surveillance and service interruption, less multistakeholder-ism, and fewer limits on government rights to limit access, data transfers, and privacy.

2. Nature of issues: The now-‘paused’ “data and source code” proposals refers to four topics, which the U.S. until last month had been discussing with 76 other WTO members in a venue called the “Joint Statement Initiative on Electronic Commerce.” They include (a) cross-border flows of digital data in the course of business, shopping, gaming, email, etc.; (b) guidelines for the circumstances in which governments can require local storage of data and when they shouldn’t; (c) cases when governments can direct businesses to disclose their software codes; and (d) ensuring that trade rules don’t discriminate against digital products.

If one were to look for an analogy in “trade policies for goods” like cars or wine, a useful though not exact comparison would be to “trade facilitation” and agreements on Customs procedures. Typical U.S. trade agreements require Customs agencies to provide online access to import and export forms, accommodate express delivery shipments, and ensure that other governments don’t use different inspection procedures for containers carried by different shipping lines or cars delivered to different ports. These sorts of rules reduce costs and delays, help toys and flowers move through airports and seaports rapidly and easily, encourage the countries and businesses that make or grow them to compete on quality and price as opposed to hidden policy favoritism, and help port officers focus on law enforcement and public health inspections. In the same way, rules encouraging free flows of data, or discouraging mandatory in-country storage and server construction, help make legitimate services trade — say, email connections, exchange of architectural planning, news and entertainment streams, etc. — easier and cheaper while helping government officials focus their work on cyber-security violations, spam prevention, and other threats.

3. Economics and trade flows: Digitally delivered services arriving via submarine cable or satellite — software, entertainment, computer technologies, professional stuff such as architecture, new earners like telemedicine and distance education — have a plausible claim to be the fastest-growing form of trade. In the U.S. case, they totaled $720 billion in 2022. By various metrics this was (a) up about 60% in the past decade, roughly twice the growth rate of overall U.S. exports; (b) a quarter of the $3 trillion in total U.S. exports in 2022, and a few hundred billion dollars more than the $380 billion for energy and $195 billion for agriculture, (c) easily the largest digital export figure for any country in the world, and (d) a thirtieth of the U.S.’ $26 trillion GDP. More subtly, digital data flows underpin lots of high-end manufacturing sales. Examples include cars that notify owners of the need for brake repair or oil change; medical devices providing diagnoses and filling prescriptions for rural clinics, agricultural machinery planting rice when the weather is right, etc. So by whatever measurement, digital trade flows support a large and highly remunerative part of the American economy and it’s quite logical for the government to care about them.

4. Current Agreements and Rules: The U.S. “digital trade” ideas are not actually experimental, but are live parts of several currently active U.S. agreements as well as the WTO’s incomplete “Joint Statement” discussions. These are Chapter 15 of the U.S.-Korea FTA, which “entered into force” as the jargon puts it in 2012; Chapter 19 of the “U.S.-Mexico-Canada Agreement” which revised the North American Free Trade Agreement in 2020; and a 19-page U.S.-Japan digital trade agreement signed in 2019. Their substance:

(a) People and businesses in participating countries have the right to move data across borders freely (e.g. for an online shopper ordering a set of toothbrushes, or an auto manufacturer whose car corresponds digitally with the home office to request software updates or notify police about an accident), with an exception for any government action “necessary to achieve a legitimate public policy objective” (e.g. anti-spam, cyber-security, protection against disinformation campaigns, etc.).

(b) Government power to require companies to turn over software code to agencies (or, often more the point, to local competing firms) is limited to public-policy regulation and good-faith investigations as opposed to arbitrary and/or discriminatory rules.

(c) Governments can’t be required to store data and build servers within a country, so as to reduce costs (and along with this, the power consumption and consequent carbon emissions) of constructing redundant servers and data centers in numerous countries.

5. What’s going on? What, finally, does the withdrawal of these ideas at the WTO mean? The three-sentence statement quoted above doesn’t explain. So rather than speculating, we offer a few questions that pretty badly need an answer:

* Does the administration want “policy space,” so as to be able to limit Americans’ data flows or require exposure of source codes for reasons that go beyond “measure[s] needed to achieve a legitimate public policy objective.” If so, what sort of things are they thinking about, and what law would authorize it?

* If the data and source code ideas are out of favor at the WTO, are the USMCA, Korea-FTA, and U.S.-Japan Digital Agreement provisions now insufficient? If so, is the administration thinking about changes to them?

* Or is the concern more about foreign governments’ “policy space”? If so, what are these governments hoping to do that Mexico and Canada (and Japan and Korea) are managing to do without?

* And how do any of these concerns relate to the larger hopes for the next-generation digital world — access and technical interoperability, innovation and economic growth arising from future rises in data flow, public-interest regulation, user privacy, and liberty — set out in the Declaration for the Future of the Internet?

Answers awaited, here and in lots of other places.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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PPI’s Trade Fact of the Week: Military spending was 2.3% of world GDP last year

Posted on November 8, 2023September 18, 2024 by Max Sherrill

FACT: Military spending was 2.3% of world GDP last year.

**THE NUMBERS: World exports, 2022*-**

All goods $24,000 billion
Clothes $315 billion
Fish $151 billion
Arms transfers $32 billion

WHAT THEY MEAN:

What place does the military hold in the world economy? Statistical snapshots from 2022 on world military spending and arms trade, and then three cautions about the data:

World defense spending at modern-history lows: A widely-used calculation by the Stockholm International Peace Research Institute (SIPRI) finds world military spending — procurement, pay, military construction, and so on — at about $2.24 trillion in 2022. According to the International Monetary Fund, world GDP was $100.15 trillion that year. So SIPRI’s figure suggests that about 2.2% of world income went to military budgets, and a World Bank table for the same year yields a very close 2.3% of world GDP.

This figure captures the policies governments set down in 2021, just before the Russian invasion of Ukraine, and by historical standards, it is very low. Tallies from earlier decades report military spending rates above 6% of world GDP in the 1960s; in a range from 3.8% to 4.5% in the 1970s and 1980s; and varying since 2000 in a narrow band between 2.2% and 2.6%. As two points of comparison: (a) about 11% of world GDP goes to health (or 6% of world GDP if one counts only public spending), and 4.2% to education; and (b) in labor terms, the CIA’s World Factbook estimates that about 20 million men and women are in uniform around the world which would be 0.5% of the world’s 3.5 billion workers. To look more specifically at the U.S., American military spending was about 3.5% of GDP in 2022 (by the World Bank’s table), which is above the worldwide average but far below the 11% the U.S. Defense Department reports for the Korean War years in the early 1950s and the 5% levels of the later Cold War.

Arms trade small relative to civilian trade: SIPRI’s parallel “arms transfer” count reports about $32 billion worth of arms deliveries in 2022. Their count covers deliveries of “major conventional weapons” — tanks, planes, missiles, submarines, artillery, etc. — and includes sales of both new and used kits, licensed production, and deliveries of significant components as well as complete systems. Like the world’s combined military budget as a share of GDP, the arms transfer total is a lot of money but small when measured against civilian trade. The WTO’s most recent annual trade statistics report puts “goods trade” in general at $24 trillion in 2022, which would make SIPRI’s $32 billion in arms transfers about 0.1% of the total. Or, to look at particular products, the WTO’s places clothing exports at $313 billion — ten times SIPRI’s arms transfer figure — and automotive trade at a much larger $1.37 trillion, while the U.N. Food and Agricultural Organization’s estimate of fish and seafood exports was $151 billion.

Nor does military trade look very large for individual countries. By country, SIPRI’s top exporters in 2022 were the U.S. at $14.5 billion, France at $3.0 billion, Russia at $2.8 billion, and China at $2.0 billion. This would be about 1% of the U.S.’ $2.1 trillion in goods exports, 0.5% of French and Russian exports (though a higher 3% of Russian manufacturing trade), and 0.1% of Chinese exports. On the import side, military shares of trade can be quite high for the largest purchasers — Qatar, the largest buyer on the SIPRI list, spent $3.3 billion on weapons or 15% of its overall $28 billion in imports, and military goods accounted for 2% and 7% of imports for fourth place Saudi Arabia and fifth place Kuwait — but outside the Persian Gulf is rarely a very large part of national import bills.

Tentative Conclusion: The public data and estimates, then, suggest that as of 2022 the world’s military economy was a relatively small part of the larger global economy; military spending a modest though not tiny part of national budgets; and military trade a very small part of international trade. Three cautions, though:

Caution (1): Secrecy: In many countries, some sections of national defense budgets and arms sales aren’t thought suitable for publishing, and are thus missing from the totals. So figures for military spending and trade, strictly defined, are reasonable “lowest-case estimates” rather than very firm data.

Caution (2): Definitions: The military economy is not separate from the civilian economy, but merges with it along the edges. Definitions of what is “military” and what is “civilian” are thus a bit arbitrary. In military trade, for example, is the right approach SIPRI’s decision to count weapons only? Would it be better to add “dual-capable” trucks, chips, fuel, rifles, and satellites too? Repair, training, software updates, replacement parts, and maintenance? Or should everything a military service buys be considered “arms trade”?

As an important example, the U.S. Defense Department’s 2023 policy paper observes that for both of these reasons, China’s “actual military-related spending could be 1.1 to 2 times higher than stated in its official [$209 billion] budget.” This would suggest a figure approaching $400 billion and somewhere between 2% and 3.2% of Chinese GDP, in contrast to the World Bank table’s 1.6%. (And some private estimates go higher.) Or to choose a case close to home, the State Department’s Political-Military Affairs branch, which oversees official U.S. arms sales policy, uses a broader definition than SIPRI’s to report “new sales” of U.S. weapons at about $55 billion a year, which would imply considerably higher global as well as American arms sales.

Caution (3): Changing times: The defense budgets and arms transfers of 2022 are those decided upon in 2021, just before Russia’s attack on Ukraine. Whatever the definitions one chooses, and however much they publish, governments are making this year’s budgets and sales in a world grown more dangerous, and their numbers will presumably be larger.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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PPI’s Trade Fact of the Week: 13 of the 54 World Series players this year are “international”

Posted on November 1, 2023September 18, 2024 by Alyssa Brown

FACT: 13 of the 54 World Series players this year are “international.”

THE NUMBERS:

MLB rosters by birthplace –

All players	969
U.S.*	719
Dominican Republic	104
Venezuela	62
Cuba	21
Mexico	15
Canada	10
Japan	8
Colombia	7
11 other countries	23

* Includes 15 Puerto Rican players, whom MLB for some reason counts as “international.”

WHAT THEY MEAN:

Cuban-born Adolis Garcia’s 11th-inning walk-off won Game 1 for the Rangers on Friday night; Venezuelan catcher Gabriel Moreno’s 2nd-inning home run started the Diamondbacks’ 9-1 rout on Sunday’s Game 2. The two teams together feature 12 international players: six Dominicans, three Venezuelans, and three Cubans as the Series began; still seven as they prepare for Game 5 but now seven, three, and two respectively given Garcia’s Game 3 injury and replacement last night by Dominican shortstop Ezequiel Duran. Altogether, they make up 24% of the Series rosters. This figure:

(a) Pretty closely matches the 26.5% international share of MLB’s full Opening Day rosters, and likewise faithfully reflects the roles of the Dominican Republic, Venezuela, and Cuba as the top three contributors;

(b) Is also quite close to the 25% international-player share of the roughly 4200 pro athletes playing this year in the six big North American pro leagues (MLB, NBA, WNBA, NFL, MLS, and NHL); and

(c) Is a bit above the 18% overall international share of the American workforce, but typical of top-tier elite working life. Some context for this last point:

The Bureau of Labor Statistics’ Labor Characteristics of the Foreign-Born Workforce release comes out each May. Its most recent edition reports 158.3 million people working in the U.S. last year, of whom 28.7 million or 18% were born abroad. The foreign-born workforce is growing relatively faster than the native-born on net — the BLS release finds total U.S. employment up 5.7 million from 2021 to 2022, with foreign-born labor up 2.3 million workers and U.S.-born by 3.4 million. This “net growth” figure, though, conceals the fact that most of the 3.6 million workers who retire each year are locally born, so the actual “gross” count of new jobs for native-born Americans was probably more like 6 million.

Looking past these top-line figures to specific industries, the foreign-born labor shares represent a sort of classic “smile curve,” with immigrant contributions highest in the best-paying and lowest-paying sections of the economy, and lower in the middle. At the very top, MLB’s 250 international players join 60% of this year’s 20 Oscar acting nominees and 50% of the six U.S.-based 2023 Nobel Prize laureates in science and economics. At the lower-paying end, USDA’s Economic Research Service reports that about 60% of crop-pickers on American farms as of 2022 are immigrants, and BLS finds foreign-born employment shares between 20% and 30% in construction, groundskeeping, domestic and personal care services, and food preparation. An illustrative table with immigrant labor shares, using 2023 when possible and otherwise picking the most recent year available:

Crop-picking farmworkers	60%
Computer science doctorates	60%
2023 Oscar nominees	60%
All farmworkers	44%
Doctoral-level science & tech workers	40%
Construction workers	34%
Major-league athletes	25%
Food service	23%
Personal care & services	20%
All science & tech workers	19%
All U.S. workers	18%
Management jobs	14%
Education & training	12%
Health care practitioners	10%
Lawyers & paralegals	6%
Security services	6%

Sources: Bureau of Labor Statistics for all workers, National Science Foundation for engineering and science workers; MLB, NBA, WNBA, MLS plus outside writers on hockey and football for athletes.

Turning back to the Series, though, the nationalities of Garcia, Moreno, their MLB teammates and rivals, and by extension, the nationalities of U.S. workers generally, are interesting both as background for fans watching the game and as illustrations of the evolution of the economy and working life. But what they’re actually doing is the main thing. The manager’s perspective: Don’t overthink it. Play ball.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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PPI Statement on U.S. Withdrawal of Core WTO Electronic Commerce Proposals

Posted on October 26, 2023 by Alyssa Brown

Today, Ed Gresser, Vice President & Director for Trade and Global Markets at the Progressive Policy Institute (PPI) released the following statement in response to the Biden administration’s decision yesterday to withdraw support for critical U.S. digital trade policy proposals at the World Trade Organization (WTO):

“It is deeply troubling to hear that the U.S. is removing its support for WTO digital trade policymaking on issues ranging from cross-border data flows to localization requirements, source code protection, and non-discriminatory treatment of digital products. These policies are sound in principle and proven in practice through such agreements as the U.S.-Korea Free Trade Agreement or USMCA. Finance Committee Chairman Ron Wyden is right to term the U.S. decision as “leaving a vacuum” that others — including authoritarian governments interested in surveillance, data-mining, and censorship — will quickly seek to fill. We share his concern over this decision, and that other technology policy leaders such as Reps. Suzan DelBene and Darin LaHood have expressed.

“We see no evidence that the U.S.’ historic advocacy of free flows of digital data subject to non-discriminatory public-interest regulation, or opposition to the financially and environmentally costly forced localization of servers and other technology, has conflicted in any way with public-interest legislation in the U.S. or elsewhere, or with regulation to protect privacy and security. Rather, we are concerned that a new U.S. passivity on these matters will embolden other governments unhappy with America’s centrality to digital technological development and trade commerce, and lead to the spread of regulatory and antitrust policies aimed differentially at American firms, and in others through de facto legitimation of national firewalling, state surveillance, and censorship.

“The administration, before proceeding further, should step back and return to first principles. In very practical terms, an open internet is indispensable to the well-being of consumers everywhere; to U.S. leadership in IT research, innovation, and technology; and to the jobs and growth underpinned by the U.S.’ world-leading $720 billion in exports of ICT and digitally enabled services. And more conceptually, an open internet is essential to a world economy in which liberty and free flows of information support growth and development, while impartial public-interest regulation targets abusive behavior and protects Internet users. We urge the administration to reflect carefully on the risks a U.S. withdrawal from core e-commerce and digital trade policy development poses to these interests and values, and to reconsider.”

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.

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Media Contact: Amelia Fox, afox@ppionline.org

PPI’s Trade Fact of the Week: Americans are buying fewer Chinese-made smartphones, laptops, TVs, and toys this year

Posted on October 25, 2023September 18, 2024 by The Progressive Policy Institute

FACT: Americans are buying fewer Chinese-made smartphones, laptops, TVs, and toys this year.

THE NUMBERS: Chinese share of U.S. laptop computers –

Jan. to Aug. 2023 82%
2022: 91.5%
2021: 93%
2017: 93%

WHAT THEY MEAN:

The Census’ monthly trade figures, now complete through August 2023, show imports down by about $136 billion or 6% as compared the first eight months of 2022. (Last year: $2.21 trillion; this year: $2.08 trillion.) Nearly two-thirds of this decline is in specifically Chinese-made goods, so the worldwide 6% drop combines a remarkable 24% fall in imports from China with a modest 2% decline from the rest of the world. The figures are:

Imports: -$136.3 billion = -6%
From China: -$89.6 billion = -24%
From all other countries: -$46.7 billion = -2%

Some thoughts on possible explanations below, but first a set of mini-case studies covering four consumer goods: laptops, smartphones, TV sets, and toys. Together these account for $19.5 billion of the $89.6 billion drop in imports from China, and about a seventh of the worldwide drop.

1. Laptops: Laptop computers accounted for $48 billion of America’s $526 billion in imports from China in 2022. This Chinese-made $48 billion in turn made up about 92% of a worldwide $52 billion. Counting individual devices, Americans bought 111.5 million laptops last year from three main sources: 102.7 million from China, 5.4 million from Vietnam, and 2.5 million from Taiwan. Comparing Census’ Jan.-August figures for 2022 with those for 2023, the total laptop-import count is down from 76.4 million to 65.8 million, with Chinese-assembled laptops specifically off from 71.1 million to 56.4 million. By contrast, Vietnam’s laptop shipments, have more than doubled from 3.3 million in Jan.-Aug. 2022 to 7.2 million so far in 2023. Taiwan’s have stayed the same at 1.4 million. So here, the drop in imports is not worldwide, but wholly Chinese..

2. Smartphones: The phone pattern is similar — overall U.S. buying down; buying from China especially down; one rival (though not the same one) rising fast. Specifically, 2022’s 173 million smartphone arrivals included 134.9 million from China, 30.4 million from Vietnam, 4.0 million from India, and another 4.0 million divided among Hong Kong, Korea, and Japan. So far this year (again comparing Jan.-August. data), phone imports are down from 115.8 million to 94.3 million, with Chinese-assembled phones accounting for 12.2 million of the total 21.5-million drop. In contrast to laptops, next-door Vietnam is even further off its 2022 pace — from 24 million phones to 11.5 million, or more than half. India is the fast-growing rival here, up from 2.5 million phones to 6.8 million.

3. TV sets: TV-set data again repeat the pattern — total imports down, China down especially fast, and a competitor rising. TV imports from China are down by 40.7% in dollars — from $7 billion to $4.4 billion — and 35% in set-count, from 43 million to 27.9 million. Meanwhile, imports of TVs from Vietnam have jumped from 3.8 million in 2022 to 5.7 million in 2023. Imports from Mexico are up too (though not dramatically) from 19.1 million to 19.6 million.

4. Toys: Finally, a less chip-and-solid-state-electronics-heavy example Overall, U.S. toy imports have dropped by about a third, from $13.8 billion in Jan.-Aug. 2022 to $9.1 billion in Jan.-Aug. 2023. Almost all the decline is in Chinese-made toys, down from $11.0 billion in Jan.-August 2022 to $6.9 billion in 2023. Here, though, while China’s “share” of U.S. toy imports has drifted down (from 83% in 2021 to 80% in 2022 and 76% so far in 2023) no single competitor seems to be rising in China’s place. Vietnamese toy shipments are down by 34%, Indonesia’s by 22%, and the non-China world overall by 20%. Mexican toy exports are a modest exception, up 8% in percentage terms, but in dollars, this is only about $40 million.

What to make of this? Four possible explanations:

1. Tapped-out American shoppers: One contributing factor is purely American. After two years of post-Covid shopping, Americans have restocked their wardrobes, replaced their phones, and TVs, and don’t need more just now.

This is plausible at least in part: With China the principal source of these things, any drop will naturally show up mainly in trade with China. But this doesn’t seem like the whole story — the simultaneous jumps in laptop and TV imports from Vietnam, and in phone imports from India, suggest buyers finding alternative if smaller Asian sourcing sites. So analysts while not discounting explanation 1 should also be thinking about explanations 2, 3, and 4.

2. Structural change reflecting geopolitics and trade conflict: After holding up through 2018-2022, despite tariffs, retaliations, spikes in diplomatic tension, and export controls, U.S.-China trade finally began to buckle this year.

3. Structural change reflecting Chinese domestic policies: After three years of chronic zero-COVID factory closures and intensified political pressure on foreign firms, China’s competitiveness has badly eroded and buyers are looking elsewhere.

4. Alternative structural change reflecting intra-Asian integration: Or, finally, China’s competitiveness maybe hasn’t eroded per se, but electronics supply chains are becoming more elaborate and specialized. In this hypothesis, final consumer-goods assembly (having shifted to China in the 2000s) now moves to neighboring countries as China takes up a new role as a components and engineering skills supplier, using the newly implemented Regional Comprehensive Economic Partnership agreement to cut costs.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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PPI’s Trade Fact of the Week: Trade in 2022: $32 trillion in exports, in a $100 trillion world economy

Posted on October 18, 2023September 18, 2024 by Alyssa Brown

FACT: Trade in 2022: $32 trillion in exports, in a $100 trillion world economy.

**THE NUMBERS: U.S. shares of world exports* –**

2022: 7.8% of manufacturing, 12.7% services, 9.6% agriculture, 8.5% fuels & mining
2017: 9.4% of manufacturing, 14.4% services, 9.8% agriculture, 6.7% fuels & mining

* Data from the WTO’s annual World Trade Statistical Review reports, 2023 and 2018.

WHAT THEY MEAN:

The International Monetary Fund’s most recent World Economic Outlook, launched last Thursday, reports that in 2022, the world’s GDP topped eleven digits for the first time to reach $100.1 trillion. The WTO’s latest World Trade Statistical Review report, meanwhile, shows exports of goods in 2022 at $24.9 trillion and exports of services at $7.0 trillion. Combining the two, this means $31.9 billion, and a matching 31.9% of world output, crossed borders. This is high in historical terms — possibly the highest export-share-of-GDP ever — reflecting the energy price spike caused by Russia’s war on Ukraine along with post-COVID surge in shopping for consumer goods, reviving travel and transport services, high farm prices, and probably some acceleration of trade integration in Asia. A table of these totals in the recent past and the last two decades:

2022:       31.9%
2021:       29.4%
2020: 26.5%
2019:       28.6%
2017:       28.4%
2012:       29.6%
2002: 22.4%

Tentative conclusion: The high 2022 export-to-GDP ratio probably reflects some temporary factors; in particular, without the energy price spike it would have been somewhere around 29%. But it also suggests that at least so far, the trade conflicts of the past five years haven’t very fundamentally changed trade flows.

Three closer-level looks — at products and “sectors,” countries, and the United States — offer some backup to this general conclusion, but also suggest areas where flows have at least shifted course:

Products: The largest single chunk of world exports is in manufacturing, which in 2022 accounted for $15.3 trillion, or about 48% of all world exports, slightly below the 52% of pre-pandemic 2019. The $15.3 value nearly equals the roughly $17 trillion in world manufacturing output; top exports were $3 trillion in chemicals, $2.5 trillion in IT goods, and $1.5 trillion in autos and auto parts. In second place comes $5.1 trillion in energy and mining, where the supply shock caused by the war nearly doubled trade value from 2017’s $2.63 trillion. Then came $3.3 trillion in digitally deliverable services ranging from entertainment and media to finance, software, gaming, air and hotel reservations, and so on; $2.3 trillion in food and farm goods; $1.5 trillion in miscellaneous goods-trade categories such as scrap metal, small-scale parcel deliveries, and returned purchases; and $1.4 trillion in transport and travel services.

So: Assuming the high energy prices were temporary, little about the world “traded-product” mix changed very much in the last five years.

Countries: The countries at the top of the WTO’s export rankings also remained pretty stable. The largest single block of merchandise trade was either (a) the European Union’s $5.4 trillion in manufacturing exports (which is shaky as it counts $3.25 trillion in trade among the 27 EU members as well as $2.14 trillion from the EU to other countries), or (b) if you take the EU as a lot of individual countries rather than one big economy, China’s $3.3 trillion in manufactures. Counting down from this, the WTO’s rankings of “top exporters” and ‘top importers’ haven’t changed very much in any of the big product divisions. The top six manufacturing exporters in 2022 – China, EU-as-a-single-economy, the U.S., Japan, Korea, Mexico – are identical to the top six of 2017, though Taiwan and Singapore swap 7th and 8th place, and Vietnam replaces Canada in tenth. In agriculture, likewise, the top six exporters are identical, though Thailand jumps over Mexico and Australia to place 7th. Rankings in “fuels and mining” (which in WTO argot includes metal ores) have changed most¸ with the U.S. climbing past Saudi Arabia and Russia to become the top exporter.

Hmm: Despite the “301” tariffs the Trump administration placed on most Chinese goods in 2018 and early 2019, China’s #1 share of world manufacturing exports rose from 17.8% to 21.7%. The U.S. held its #2 manufacturing rank, but the American share of manufacturing exports shrank from 9.4% to 7.8%.

The U.S.: How did the U.S. fare as all this proceeded? From 2017 to 2022, the U.S. held its second-place share as a goods exporter, lengthened its lead as the world’s top goods importer, and remained the top services trader. So to date — despite “301” and “232” tariffs, withdrawal from the Trans-Pacific Partnership Agreement, renegotiation of the North American Free Trade Agreement, sanctions on Russia, and a battery of new export controls — no very revolutionary changes in the actual U.S. world role. A slightly more granular level, though, reveals some shifts:

1. U.S. export economy is a bit smaller and more concentrated in energy: The U.S. export economy shrank a bit (in relative terms), from 12.2% of GDP in 2017 to 11.6% in 2022. Meanwhile, the Census’ count of U.S. exporting businesses fell from 290,600 in 2017 to (a preliminary) 279,000 in 2022. Energy exports however jumped from a historically very high 9.1% of total exports in 2017 – $141 billion of $1547 billion – to an all-time record 18.2% in 2022, or $380 billion of $2086 billion. Mirroring these domestic figures, the WTO finds the U.S. with a lower share of world manufacturing exports and a higher share of energy. Overall, then, not a very inspiring result. One explanation is benign: heavy stimulus spending causing a consumer boom and diverting exports to domestic customers. Another is less encouraging: an unanticipated effect of tariffs, as the “301” and “232” tariffs imposed in 2018 and 2019 fell heavily on industrial inputs, and thus likely raised U.S. factory costs and eroded competitiveness, especially as Asian countries continued to cut tariffs on one another’s goods.

2. Americans import more, especially in manufacturing: Imports, by contrast, rose from 14.9% of U.S. GDP to 15.4%. This is the highest import share since 2014. Most of the jump reflects a post-pandemic surge in import of manufactured goods, which rose in dollar terms by $740 billion from the levels of 2014. Mirroring this rise, the WTO tables show Americans buying 14.1% of world manufactured exports in 2017, and 15.7% in 2022. With exports only up $70 billion, the Trump administration’s pledge to reduce U.S. manufacturing trade deficits ended with a comically perverse doubling of the sectoral deficit from -$648 billion in 2016 to -$1.3 trillion in 2022.

3. Less from China, more from Vietnam and Mexico: Within the totals, though, U.S. sourcing has shifted noticeably. China’s share of U.S. imports, at 21.6% in 2017, fell to 16.3% in 2022; Vietnam and Mexico, and secondarily India and other ASEAN countries, picked up most of the roughly $150 billion in diverted imports. In 2023 (based on the Census figures complete through last August) this drop accelerated, with China falling behind both Mexico and Canada as U.S. import sources. This noted, China’s higher share of worldwide manufacturing exports suggests that (a) Chinese firms were able to replace lost U.S. customers with sales elsewhere, and/or (b) some of China’s diminishing share of American imports reflects shifts of final assembly to other middle-income countries, in which case China would be exporting components and parts to factories abroad and the U.S. still the final buyer. See below, though, for a third possibility — the early stages of vaguely geopolitical “trade blocs” — suggested by WTO economists this month.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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PPI’s Trade Fact of the Week: Florida green turtle nesting counts up 80-fold since the 1970s

Posted on October 11, 2023September 18, 2024 by Alyssa Brown

FACT: Florida green turtle nesting counts up 80-fold since the 1970s.

THE NUMBERS: Green turtle nest counts at 27 Florida “core index beaches” –

2022-2023 ~40,000 nests?
2020-2021 ~23,000 nests
2010-2011 ~10,000 nests
2000-2001 ~4,000 nests
1990-1991 ~1,000 nests
1980s ~500 nests

* Florida Wildlife Commission, using two-year averages as green turtle nesting totals appear to vary in a two-year cycle. These are not total statewide (or U.S.) nesting estimates, but counts of nesting at 27 long-studied beaches, making up a representative sample of known Florida nesting beaches. Total nest counts in 2022 were 37,000

WHAT THEY MEAN:

Here’s 17th-century British navigator/pirate/early naturalist William Dampier, on the Caribbean’s vast green turtle flotillas and the swarms of fish traveling in their wake:

“I heard of a monstrous green turtle once taken at Port Royal in the Bay of Campeachy [ed. note: then the capital of Jamaica] that was four foot deep from the back to the belly, and the belly six foot broad. … [M]ultitudes of Turtles go from their common places of feeding and abode, to those laying eggs: and at the time the Turtle resort to these places to lay their Eggs, they are accompanied by abundance of Fish, especially Sharks; the places that the Turtle then leave being at that time destitute of Fish, which follow the Turtle.”

By the mid-20th century the “multitudes of turtles” were nearly gone. When Florida wildlife staff began counting green turtle nests in the 1970s, they found only about 500 each year and sometimes fewer. NOAA’s unhappy summary reports a “catastrophic global decline of the species” with six causes: (a) “by-catch,” as turtles drown in nets towed by shrimp boats; (2) direct hunting, taking green turtles “in extraordinarily high numbers for their fat, meat, and eggs”; (3) loss of nesting grounds, through beach erosion, seawall construction, and bright hotel lighting that deter night-time nesting; (4) collisions with boats close to shore; (5) ocean pollution, in particular plastics and balloons; and most recently (6) climate change and warming ocean temperatures. The green turtles’ decline is typical: the International Union for the Conservation of Nature lists all seven sea turtle species — greens, loggerheads, leatherbacks, Kemp’s Ridleys, olive Ridleys, flatbacks, hawksbills — as either “threatened,” “endangered,” or “critically endangered.”

Some of these threats — floating plastics, warming water — are daunting, global-scale issues. Others seem cheap and simple to fix. Most countries, including the U.S., have banned turtle hunting for food and jewelry, and excluded turtle products from international trade in 1977 through the Convention on International Trade in Endangered Species. Congress in 1987 adopted a law requiring shrimp boats serving the U.S. — whether local or foreign — to equip their nets with “Turtle Exclusion Devices,” which are metal grilles with holes allowing unintentionally trapped turtles to swim out of the nets, costing $325-$550 each. (See below for the WTO’s record of a celebrated U.S.-Mexico trade dispute over the application of this regulation to foreign boats, which the panels eventually decided in favor of the U.S.) And the Florida government under Gov. Lawton Chiles in 1991, meanwhile, imposed beach protection rules and night-time blackouts during nesting months.

A generation later, these cheap and simple fixes look like they’ve worked. Florida’s green turtle nesting counts, measured in two-year cycles, show very strong recovery. The Florida Wildlife Commission’s most recent report, out early this year, shows an 80-fold increase in nesting counts since the early 1980s: a few hundred a year then, about 40,000 per year in 2021 and 2022. The official count for the 2023 nesting season won’t come out until early 2024, but individual beach counts suggest a boom year with as many as 70,000 nests. Nor again are green turtles unique; populations of the smaller and rarer Kemp’s Ridley turtle in Mexico has also rebounded, and the U.S Fish and Wildlife Service has successfully started a new Texas nesting ground.

Not yet anything on the scale of Dampier’s “multitudes”, of course. And looking ahead, the challenges of floating plastics and warming water aren’t simply and probably won’t be cheap. But nonetheless, after many bad decades. the turtles have had a few good ones.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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PPI’s Trade Fact of the Week: The U.S. does 28% of the world’s scientific research and development spending

Posted on October 4, 2023September 18, 2024 by Alyssa Brown

FACT: The U.S. does 28% of the world’s scientific research and development spending.

**THE NUMBERS: R&D spending, 2020* –**

World (known)	$2.4 trillion
United States	$668 billion
China**	$526 billion (?)
European Union	$440 billion
Japan	$173 billion
South Korea	$105 billion

* National Science Foundation estimates, 2022
** Estimate from 2022; 2023 likely will revise this downward.

WHAT THEY MEAN:

The National Science Foundation’s most recent tally of research spending around the world, published early in 2022, calculated in “purchasing-power parities,”* estimated about $2.4 trillion worth of science in 2019. The IMF’s guess at the 2019 world economy meanwhile (also using the PPP-basis option so as to match NSF’s R&D figure) was $138 trillion. So that year, $1.70 of each $100 of world income went back to labs to design quantum computers and write up artificial intelligence programs, give the last touches to the Webb telescope and open the first analyses of the COVID-19 virus, design new biotech crops, finance robot-sub dives to deep-sea black smokers, and work up ancient-DNA investigations of Neanderthal origins.

Dividing the $2.4 trillion global figure into country-by-country totals requires some social science best-guesses and adjustments to later revisions. For example, NSF put China’s R&D spending at $526 billion in 2019. The OECD, though, has China at $465 billion in 2018 and hasn’t yet guessed at 2019. Meanwhile, if Chinese science is getting revised a bit down, the Brits have been scaled up. The NSF’s first guess for the U.K. in 2019 was a deflating $57 billion, putting the land of Darwin & Newton, Berners-Lee & Hawking, etc. at par with India and well below the $74 billion for France. They’ve now recalculated and gotten something closer to $90 billion. But understanding there’s some blurriness around the edges, here are three big-picture perspectives as of 2019:

Largest R&D Centers: Five countries put more than $100 billion a year into science. The U.S. was top at $668 billion (and per NSF, ratcheted up to $717 billion in 2021 and a likely $792 billion in 2022). American science accordingly made up 28%, or somewhat more than a quarter, of all world research spending – nearly twice the U.S.’ 15.8% share of world PPP-basis GDP, and seven times its 4% share of world population. China was second at $526 billion and 22% of world R&D, followed by Japan at $173 billion, Germany at $148 billion, and South Korea at $102 billion. Together these five countries accounted for two-thirds of all world R&D spending. Adding France and the UK brings the total near three-quarters of the world total.

West & Rest: Traditional ‘western’, ‘developed’ countries account for over three-fifths of world science. Combining the NSF’s estimate for the U.S. with those for Japan, Korea, the 27 EU members, the UK, Switzerland, Norway, Israel, Taiwan, Canada, Australia, and New Zealand, yields a total of $1.5 trillion, exactly five-eighths of the $2.4 trillion worldwide total. China, whether at $526 billion or somewhere in the $500 billion range, is the secondary pole at 22%. The remaining 150 countries — all of Latin America, the Middle East, Southeast Asia, and Africa — together put about $400 billion into science each year. A Korea-like $135 billion comes from the nine non-Chinese big-population BRICS members and invitees (Brazil, Russia, India, South Africa, Egypt, Iran, United Arab Emirates, Saudi Arabia, and Ethiopia). The remaining 120 provide $240 billion and 10% of the world total.

Most “Research-Intensive”: Dropping total-dollar figures and instead looking at research spending relative to national economies, the R&D shares of GDP in the world’s most research-intensive economies, and in nine of the world’s ten largest countries by population,** look like this:

Israel	4.9%
South Korea	4.6%
Taiwan	3.5%
Sweden	3.4%
Germany	3.2%
Japan	3.2%
U.S.	3.1%
China	2.3%
Brazil	1.2%
Russia	1.0%
South Africa	0.8%
India	0.7%
Mexico	0.3%
Indonesia	0.2%
Pakistan	0.2%
Nigeria	0.1%

And a Bit More: Brazil is the top Latin American research power, with $36 billion and 1.2% of GDP. India has a very large dollar-value R&D program at $59 billion, eighth in the world after the U.K. and France. Indian science, though, remains modest as a 0.65% share of GDP. This is somewhat below the 1.6% average for middle-income countries. Russia had about the same total-dollar investment as Taiwan at $44.5 billion in 2019 (though it’s presumably lower now); relative to GDP, its 1.04% was about the same as Turkey’s R&D intensity. Thailand is ASEAN’s top researcher in dollar terms at $12 billion or 1.0% of GDP; relative to GDP, though, Singapore leads at 1.8%.

* The two common calculations of GDP are “exchange-rate basis,” and “purchasing-power parities.” The PPP-basis gives larger figures for developing countries, as it attempts to equalize prices paid for services. Both have advantages and disadvantages; we’re using PPP here as that’s how NSF estimated science spending.
** Unfortunately missing #8 by population, not because we forgot Bangladesh, but as NSF hasn’t done an R&D estimate for them.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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PPI’s Trade Fact of the Week: Worldwide HIV/AIDS mortality has dropped by two-thirds since 2003

Posted on September 27, 2023September 18, 2024 by Alyssa Brown

FACT: Worldwide HIV/AIDS mortality has dropped by two-thirds since 2003.

THE NUMBERS: Eswatini life expectancy at birth –

20219 61
2005: 42
1990: 63

WHAT THEY MEAN:

In this last week for Congress to reauthorize the expiring “PEPFAR,” the President’s Emergency Plan for AIDS Relief –

PEPFAR provides nearly $7 billion this year around the world for AIDS education, testing, treatment, and social supports. Since its 2003 launch during the second Bush administration, the program has earned a plausible claim to the mantle of the postwar Marshall Plan in its blend of ambitious concept, global scale, commitment to the common good, and successful implementation in practice. Its reauthorization this year has very unfortunately been linked to unrelated and longstanding debates on abortion, though PEPFAR (like other U.S. foreign aid programs) is, in fact, banned from funding abortions abroad. Some background:

Eswatini, a small inland country of 3 million bordering South Africa and Mozambique, has the world’s highest HIV-positive rate, at 27.9% of adults. In the early 2000s, Eswatini counted 10,000 AIDS deaths per year, and from 1990 to 2005, Swazi life expectancy at birth fell from 63 years to 42. To put this 21-year drop in context, life expectancy in China seems to have fallen by 1.5 years during World War II, and by half a year during the Great Leap Forward/Cultural Revolution decade.

On a larger scale, in the early 2000s AIDS deaths were running at two million per year, among 40 million HIV-positive people around the world. About 5% of HIV-positive people lived in the United States and other developed countries. Estimates elsewhere included 25 million in Africa, 7 million in South and Southeast Asia, and 2.1 million in Latin America and the Caribbean. Governments and charities attempting at the time to respond in these regions found multiple large obstacles, each making all the others seem insoluble:

Low patient awareness, with most HIV-positive adults in developing countries unaware of their status;
Medicine scarcity, with antiretroviral triple-drug therapy developed only in the late 1990s, availability limited, and administration cumbersome;
Difficulty delivering care, with millions of potential patients in rural areas and large city slums with few clinics and fewer trained nurses and doctors; and
Finance, with developing-country health ministries small and lacking the money to meet any of these practical challenges let alone all of them at once.

PEPFAR has been the U.S.’ big response. Sustained for 20 years, the nearly $7 billion in its various bilateral accounts — prevention and education, testing, medicine, orphan and dependent care, and others — and contributions to the Global Fund and UNAIDS now combine to make up about a third of the worldwide $22 billion in HIV/AIDS support. Run by seven agencies headed by the Global AIDS Coordinator at the State Department, PEPFAR programs operate in 120 countries and most recently helped keep HIV treatment going during the COVID-19 pandemic by such measures as support for telemedicine development and decentralized distribution of HIV testing kits.

A few statistics suggest the scale of its activity: PEPFAR this year will provide anti-retrovirals to 20.1 million people, care and shelter for 7 million orphans, and “PrEP” preventative treatment for 1.5 million people. Since its launch, treatment has risen to nearly 30 million of the 39 million people now believed HIV-positive worldwide. Estimates of annual new infections have fallen to 1.3 million in 2022, the lowest annual total since the 1980s. And world AIDS mortality has fallen by two-thirds, from the 2 million annual deaths of the early 2000s to about 600,000 per year now, with accompanying declines in maternal and child mortality, and rising childhood immunization rates.

Returning to Eswatini, hardest hit of all: The pandemic is far from over, but Eswatini is now meeting its main challenges. A 2021 national survey shows that 94% of adults with HIV are aware of their status; 97% of these people use antiretroviral medicines; and virus suppression is achieved in 96% of antiretroviral patients. In more tangible terms, some trend-markers: (a) HIV-positivity rates have dropped about 10% from their peak; (b) 200,000 Swazi are taking antiretrovirals, as against 500 in 2005; (c) AIDS mortality has dropped faster than the world rate, from the 10,000 deaths per year of the early 2000s to 2,600 last year; (d) life expectancy has recovered not quite to pre-pandemic rates, but just before the COVID pandemic had returned to 61.

Turning back to Congress: The PEPFAR authorization expires when the “fiscal year” ends this Sunday, September 30. It has accomplished a lot. Its work isn’t finished. It shouldn’t be stopped before it’s done.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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“Bidenomics” as Politics and Policy: Creditable Start, But Gaps to Fill

Posted on September 21, 2023 by Alyssa Brown

INTRODUCTION

“Bidenomics is Working: The President’s Plan Grows the Economy from the Middle Out and Bottom Up — Not the Top Down” is the lengthy title of a concise mid-June paper summarizing the White House view of the mid-2023 American economy, the role of policies to date in creating it, and the ways to build on success. The document — BiW for short — is a mix of political “messaging,” data points, and policy advocacy organized as follows:

1. Our successes so far: The strong 2023 economy, with its post-COVID recovery, its low unemployment rate and new manufacturing jobs, and its strong wage growth, emerged not by accident, but as the intended consequence of “Bidenomics.”

2. Their gloomy alternative, summarized as “the failed trickle-down policies of the past” — BiW uses the phrase “trickle-down” five times to make sure you’ve noticed — and specifically dates this “past” in President Biden’s accompanying July 6 speech to a point forty years ago, somewhere in the first Reagan term, at which Americans “walked away from how this country was built.”

3. The next phase: A “three-pillar” program to seal the achievement: (a) revival of large-scale public investment, (b) worker empowerment, particularly through encouraging labor union organization, and (c) promoting “competition” in the domestic economy.

3a. A fourth policy point, not labeled a “pillar” or highlighted at the top of the document, and so looking a bit sad and alone: deficit reduction and inflation-fighting.

Taken together with the July speech, BiW represents the first draft of the administration’s economic case for re-election — and a lot of it is very good. BiW effectively describes the role of the Biden administration’s policies in reviving the COVID-stricken economy of 2020. It selects the right audience in America’s large and somewhat disaffected working class. And its policy “pillars” are an interesting start with some useful new mid-tier ideas.

But BiW also has gaps. Its vision of the “working class” focuses so intently on manufacturing and construction workers that it mostly misses the much larger non-industrial working class. Its take on the 2024 Republican alternative is off — the opposition’s program is much more likely to be a Trumpist “big-government right” program than Reagan-era budget cutting and market fundamentalism — and its description of the past 40 years as an unbroken period of “trickledown” is intellectually lazy and carries some political risk. Finally, BiW’s policy “pillars” are only a start; while they do showcase some good mid-tier ideas, they’re a bit thin, overly skewed toward government solutions, and unfortunate in the second-class status they implicitly assign to fiscal responsibility and inflation-fighting. What follows are unsolicited but friendly thoughts on ways to fill the gaps, as the administration’s economic wonks and messaging experts develop the second draft.

Read the full report.

PPI’s Ed Gresser Testifies in Congressional Hearing on Reforming the Generalized System of Preferences

Posted on September 20, 2023 by Alyssa Brown

Today, Ed Gresser, Vice President and Director for Trade and Global Markets at the Progressive Policy Institute (PPI), testified during the U.S. House Committee on Ways and Means Subcommittee on Trade hearing on reforming the Generalized System of Preferences (GSP). Gresser oversaw this program from 2015 to 2021, as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR).

GSP is a 50-year-old set of tariff waivers for 119 low- and middle-income countries, from small Pacific and Caribbean islands to larger countries, such as Brazil and Pakistan. In exchange for waiving tariffs on about 3,600 goods, GSP imposes a list of 15 eligibility criteria ranging from market access to labor standards, resource cartels, and intellectual property rights.

In his testimony, Gresser argues that Congress should reauthorize the program, which lapsed in 2020, and proposes updated improvements to better serve Congress’ top policy goals.

“GSP plays an important role in development and poverty alleviation as countries across the world diversify their economies and create new job opportunities. GSP also helps the U.S. government achieve policy goals in a number of important areas and provides options for American buyers hoping to diversify sourcing beyond China,” said Ed Gresser. “I hope Congress will quickly reauthorize GSP, as it works to improve and update the program.”

You can watch Gresser’s testimony here.

Follow the Progressive Policy Institute.

Find an expert at PPI.

###

Media Contact: Amelia Fox, afox@ppionline.org

PPI’s Trade Fact of the Week: The U.S. Generalized System of Preferences program has been expired for nearly three years

Posted on September 20, 2023September 18, 2024 by Alyssa Brown

FACT: The U.S. Generalized System of Preferences program has been expired for nearly three years.

THE NUMBERS: Random sample of GSP imports, 2020 –

Armenia	486 tons of jam & $9.5 million in golden jewelry
Belize	$6.5 million of cane molasses
Bolivia	32,700 wooden doors
Cambodia	49 million handbags
Georgia	11,900 liters of wine
Haiti	567 tons of fresh mangoes, 870,000 woven flags
Liberia	5.7 tons of spices
Namibia	$5 million in stonework
Pakistan	$25 million in sports equipment
Solomon Islands	500 tons of canned tuna
South Africa	217 tons of essential oils
Thailand	27.3 million orchids, 10.6 million rulers & tape-measures
Timor-Leste	15 tons of vegetable oil from Timor-Leste
Tonga	411 tons yams, 182 tons taro root
Ukraine	8 tons of pickles, 316 tons of titanium-based paint
Uzbekistan	430 tons dried peppers, 19 tons dried apricot

WHAT THEY MEAN:

Live now at 2 p.m. EST: PPI’s Ed Gresser is testifying at the House Ways and Means Trade Subcommittee. Watch the live stream.

Background: The Subcommittee’s hearing is on the revival of Generalized System of Preferences, or GSP, a program Gresser oversaw as a civil servant from 2015 to 2021. This is a 50-year-old set of tariff waivers for 119 low- and middle-income countries, from small Pacific and Caribbean islands to big Brazil and Pakistan, for which Congress’ authorization lapsed at the end of 2020. The U.S. for the moment is the only developed country without such a system.

Some specifics: GSP tariff waivers apply to 3,616 of the U.S.’ 11,414 tariff “lines”* for all the countries on the list, and 5,138 “lines” for the 42 least-developed countries in the group. Real-world cases, noted above, range from Ukrainian paint and Armenian jewelry, to Haitian mangoes, Thai orchids and mirrors, Fijian ginger candy, Mongolian pine nuts, South African citrus, Cambodian backpacks, and South Pacific yams and taro root. The tariff rates on these lines average about 4.8%, and peak at above 20% for backpacks and luggage. Balancing the additional bit of opportunity are 15 eligibility criteria — providing “reasonable assurance of access to markets” and “adequate and effective protection of intellectual property,” “taking steps to afford internationally recognized labor rights” — which Congress asks participating countries to meet.

During its last year in effect, depending on one’s point of view GSP trade made up (a) an impressive $17 billion in imports, or (b) a modest 11% of imports from the relevant countries (given some exclusions of products, the permanently duty-free status of most energy and resources, and some other factors ) or (c) a modest-almost-to-the-point-of-chastity 0.8% of that year’s $2.35 trillion in U.S. imports. Two policy points for the Committee as Congress considers re-upping and revising it this fall:

1. Set clear priorities: If Congress’ main goals are encouraging supply-chain diversification and alternatives to Chinese sourcing, the GSP program’s benefits probably should be more significant and need to be pretty stable. So: long new authorization; consider upgrading benefits either by adding products, revising the arcane ‘Competitive Need Limit’ system, or other options; and make sure removals of benefits on eligibility grounds are last resorts for severe non-compliance. Alternatively, if the top goals are encouraging countries to work on particular policies through the eligibility criteria, think also about adding some value, and about limiting the number of new eligibility criteria and keeping them specific so that administration officials and GSP country governments can focus on the relevant topics.

2. Act with some urgency: GSP’s Congressional ‘authorization’ lapsed at the end of December 2020, and so the program has not provided benefits for three years. As we noted a couple of weeks ago with respect to the Solomon Islands and canned tuna, this means countries in the program, especially smaller and poorer ones, risk losing exports and employment as trade shifts back to larger and often non-GSP sources. At the same time, U.S. government hopes to use the program for particular policy goals, or to encourage diversification of sourcing and reduce China-reliance, remain on hold. So, act expeditiously.

* See the tweet below for an especially kooky real-life example of these “lines,” with a screenshot of the Borges-like list of wild animal tariffs on HTS pg. 12.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

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PPI’s Trade Fact of the Week: Humanity is ‘aging’ three months each year

Posted on September 13, 2023September 18, 2024 by Alyssa Brown

FACT: Humanity is “aging” three months each year.

**THE NUMBERS: Median age* –**

Japan	49.0 years
Europe	42.0 years
U.S.	37.9 years
World	30.5 years
Africa	19.0 years
Niger	14.5 years

* Our World in Data

WHAT THEY MEAN:

Writing in retirement at Saladin’s court in 1185, the 90-year-old aristocrat ibn Munqidh goes in for some moping. In his youth, ibn M. recalls, he cheerfully rode off on weekends to spear Crusaders, political rivals, and charismatic megafauna. Now he’s worn out by a bit of calligraphy:

When I wake up I feel like a mountain is on top of me
When I walk, it’s like wearing chains
I creep around with a cane in my hand …
My hand struggles to hold up a pen, when it once
Broke spears in the hearts of lions.

Yes, well, happens to us all these days. In that era, and for most of human history, not so much. Until the 19th century life expectancy at birth was about 30 — that is, only half the public got to 30 — and a 25-year-old expected (on average) to live to 50. Ibn M. was an extreme outlier, having avoided first the pre-1800 40% child mortality rate and then the high chance of getting carried off later on by plagues, accidents, predators, or competent enemies, and making it to his 10th decade.

Today, by contrast, the elderly demographic — already with 150 million people over 80 — is the world’s fastest-growing. This, plus the fact that birth rates have fallen by nearly half since the 1970s, means that humanity is aging. Our World in Data’s tabulation finds this year’s global “median age to be 30 1/2, meaning that (a) more than half of us are over 30, and (b) the person exactly in the middle was born in 1992. Our World’s figure is about ten years older than the 20-year median of 1970 and five years older than the 25-year median of 2000, and is projected to creep up by three months per year for the next half-century. The worldwide medians over the last 50 years, with a tentative estimate for 2050, look like this:

2050 36?
2022 30
2010 27
2000 25
1970 20

Worldwide averages, of course, conceal lots of variation. Details by region below; but in general, East Asia and Europe are “old,” with median ages over 40; Japan is currently the “oldest” country* at 49. Africa is “youngest” with a median age of 19 (and turbulent Niger is the world’s single “youngest” country at 14 and a half), with the Pacific islands second-youngest. The other regions are in the middle, with Latin America and the Caribbean exactly at the world’s 30-and-a-half-year average (but aging fastest of all), and South Asia, Southeast Asia, and the Middle East a bit below. The U.S. is above the world average at 39, but aging only about 2 and a half months per year, while Europe adds about 3 and a half months, Asia 4 months, and Latin America 5 months.

So: In Europe and East Asia especially, the next decades’ experience will probably be one in which people (whether or not they start wistfully putting down their spears) start getting tired as they push around the modern equivalents of calligraphy pens. Economists accordingly predict rising demand for health equipment and telemedicine services; labor shortages in western countries and East Asia, combined with lower GDP growth rates with which to pay the new workers; production and consumer booms in India, Africa, and parts of the Middle East; and politics increasingly dominated by arguments over how to pay for health and pensions. Still, as ibn Munqidh might reluctantly agree, better than any realistic alternative.

* Counting countries with populations above 100,000. The Vatican, with about 800 people, is technically the oldest country, with its various Cardinals, secretaries, and Swiss Guards at a median age of about 58.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

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.

Read the full email and sign up for the Trade Fact of the Week

Saudi Arabia	7.4%
Qatar	7.0%
Oman	5.2%
Israel	4.5%
Russia	4.1%
U.S.	3.5%
Cuba	2.9%
Singapore	2.8%
South Korea	2.7%
Pakistan	2.6%
Lithuania	2.5%
WORLD	2.3%
Vietnam	2.3%
United Kingdom	2.2%
France	1.9%
China*	1.6%
Norway	1.6%
Spain	1.5%
New Zealand	1.2%
Thailand	1.2%
Brazil	1.1%
Switzerland	0.8%
Indonesia	0.7%
South Africa	0.7%
Argentina	0.4%
Ireland	0.2%
Haiti	0.1%

PPI’s Trade Fact of the Week: U.S. clothing tariffs are unfair to women

FACT: U.S. clothing tariffs are unfair to women.

THE NUMBERS: Average U.S. tariff rates* for clothing by gender, 2022 –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Working-class Americans on trade policy – no clear consensus on past agreements, little support for new tariffs, strong hope for training and apprenticeships.

THE NUMBERS: “Effects of agreements to lower tariffs and other barriers on me and people like me,” among Americans with less than college education* –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: ‘American’ foods are the base of som tam, goulash, vindaloo, Swiss chocolate, and French fries.

THE NUMBERS: Sample agricultural commodities –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: U.S. Internet policy is suddenly uncertain.

THE NUMBERS: U.S. export growth, 2012-2022*-

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Military spending was 2.3% of world GDP last year.

THE NUMBERS: World exports, 2022*-

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: 13 of the 54 World Series players this year are “international.”

THE NUMBERS:

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Americans are buying fewer Chinese-made smartphones, laptops, TVs, and toys this year.

THE NUMBERS: Chinese share of U.S. laptop computers –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Trade in 2022: $32 trillion in exports, in a $100 trillion world economy.

THE NUMBERS: U.S. shares of world exports* –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Florida green turtle nesting counts up 80-fold since the 1970s.

THE NUMBERS: Green turtle nest counts at 27 Florida “core index beaches” –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: The U.S. does 28% of the world’s scientific research and development spending.

THE NUMBERS: R&D spending, 2020* –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Worldwide HIV/AIDS mortality has dropped by two-thirds since 2003.

THE NUMBERS: Eswatini life expectancy at birth –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

INTRODUCTION

FACT: The U.S. Generalized System of Preferences program has been expired for nearly three years.

THE NUMBERS: Random sample of GSP imports, 2020 –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Humanity is “aging” three months each year.

THE NUMBERS: Median age* –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

**THE NUMBERS: Average U.S. tariff rates* for clothing by gender, 2022** –

**THE NUMBERS: “Effects of agreements to lower tariffs and other barriers on me and people like me,” among Americans with less than college education* –**

**THE NUMBERS: U.S. export growth, 2012-2022*-**

**THE NUMBERS: World exports, 2022*-**

**THE NUMBERS: U.S. shares of world exports* –**

**THE NUMBERS: R&D spending, 2020* –**

**THE NUMBERS: Median age* –**