issue: Trade

Renew and Modernize the U.S.’ Trade and Development Program for Poor Countries, Argues PPI’s Ed Gresser

Posted on by The Progressive Policy Institute

As Congress debates renewal of “GSP” – the Generalized System of Preferences, the U.S.’ largest trade and development program, which waives tariffs on 3500 products for 119 low- and middle-income countries, and requires periodic reauthorization – it is right to take a new look at an old program and update old eligibility rules; but it should also be careful to avoid adding too many new ones, and balance them with fresh looks at old product restrictions, explains a new paper from Progressive Policy Institute (PPI) Vice President of Trade and Global Markets Ed Gresser.

“It is fair to ask governments of countries whose businesses and workers receive duty-free benefits to meet basic requirements, and some of the proposed new criteria are good ideas,” writes Ed Gresser. “But overly long lists of new criteria are likely to create confusion as U.S. policy priorities clash, and could force wholesale expulsion of poorer countries whose capacity to implement policy is lower than that of middle-income countries. This latter risk is particularly troubling.”

Gresser argues that Congress should be commended for endeavoring to update GSP but adding many new eligibility rules without expanding product coverage (which neither of the two major reauthorization bills achieve) risks leaving the revised program less effective than the current version.
The paper makes the following recommendations, which allow for rebalancing the GSP system while eliminating U.S. policy conflict and the exclusion of poor countries with weak capacity:

  • Set a limited number of priorities, by adding several important new issues (for example, environmental policy) to the current list of 15 eligibility criteria, but restraining the number of new criteria.
  • Make these priorities achievable for countries with good will but limited means and capacity.
  • Simplify, by defining some proposed new criteria as “advisory” issues to consider, rather than requirements countries must meet, and clarify that to the extent possible, enforcement of criteria should not endanger the interests of the people the criteria aim to support.
  • Add balancing new benefits, for example a reform of CNL rules proposed by Representatives Stephanie Murphy (D-Fla.) and Jackie Walorski (R-Ind.), and inclusion of some products currently barred from GSP.

 

Read the paper and expanded policy recommendations here:

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

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Media Contact: Aaron White – awhite@ppionline.org

Trade, The Poor, and “America is Back”: A Friendly Critique of Congress’ GSP Renewal Bills, with Some Ideas on Improving Them

Posted on by The Progressive Policy Institute
INTRODUCTION

Should the United States help the poor abroad?  If so, how much?  Should we ask something of their governments in exchange?  And what if we ask something the governments can’t fully do?  These are the core questions as Congress discusses renewal of the Generalized System of Preferences.

This system, known for short as “GSP,” is the U.S.’ largest trade and development program.  Dating to 1974, it waives tariffs on about 11% of imports from 119 low- and middle-income countries and territories, so as to encourage U.S. buyers to source some products from them rather than larger, wealthier economies.  Balancing these benefits, it imposes some eligibility rules, for example asking “beneficiary countries” to take steps toward enforcement of labor rights, intellectual property, and other matters.

GSP lapsed at the end of 2020, and thus has provided no benefits in over a year.  Both parties in Congress appear in principle to support its renewal.  The Senate has passed a bipartisan reauthorization bill (endorsed as well by House Republicans); and while the House is divided by party on several specific issues, actual opposition seems scarce.  Assuming one believes the U.S. should try to help the poor, this is good news — for countries enrolled in GSP, for the workers and businesses that draw the benefits, and also, in a small but tangible way, for the Biden administration’s effort to show that America “is back” and has not slumped into inward-looking passivity or resentment.

On the other hand, the renewal bills share a weakness: they try to make a small program do too much.  GSP is somewhat old and creaky.  Its product coverage is limited by product exclusions and “Competitive Need Limitation” (CNL) rules dating to the 1970s, and its eligibility criteria have remained unchanged since the late 1990s.  Both could be better.  But most of Congress’ work appears to have gone into adding new eligibility rules, and neither bill proposes adding anything to GSP’s relatively modest list of goods eligible for tariff waivers.  It is fair to ask governments of countries whose businesses and workers receive duty-free benefits to meet basic requirements, and some of the proposed new criteria are good ideas.  But overly long lists of new criteria are likely to create confusion as U.S. policy priorities clash, and could force wholesale expulsion of poorer countries whose capacity to implement policy is lower than that of middle-income countries.  This latter risk is particularly troubling, since some new proposals appear so strict that few if any low-income countries could meet them.

So while Congress deserves applause for an apparent intent to renew the program, and willingness to take a fresh look at old rules, there is reason for concern that the updated program may achieve less than the old.  Congress should therefore think about (a) how much it wants to add, and (b) a balance between new criteria and new export opportunities.  Some relatively simple revisions could help:

 

  1. Set a limited number of priorities, by restraining the number of new criteria in the system.
  2. Make these priorities achievable for countries with good will but limited means and capacity.
  3. Simplify, by defining some proposed new criteria as “advisory” issues to consider, rather than requirements countries must meet, and clarify that to the extent possible, enforcement of criteria should not endanger the interests of the people the criteria aim to support.
  4. Add balancing new benefits, for example through a reform of CNL rules proposed by Representatives Stephanie Murphy (D-Fla.) and Jackie Walorski (R-Ind.), and inclusion of some products currently barred from GSP.

 

READ THE FULL PAPER:

 

Trade Fact of the Week: World GDP will top $100 trillion for the first time in 2022

Posted on by The Progressive Policy Institute

FACT:

World GDP will top $100 trillion for the first time in 2022.

 

THE NUMBERS: 

$102 trillion     World GDP (currency-basis), 2022
$480 trillion     World individually held wealth, 2022

 

WHAT THEY MEAN:

How much is “all the money in the world”?  And where is it?

Guessing at the economic outlook last October, the International Monetary Fund projected global growth of 4.9% for 2022. This would be a jump of about $8 trillion from 2021’s $94 trillion in total world GDP, for the first time bringing this total above $100 trillion.  Of this, $60 trillion reflects the output of “advanced economies” — meaning the U.S., Canada, U.K., EU, Norway, Iceland, Switzerland, Japan, Korea, Australia, New Zealand, Taiwan, Hong Kong, and Singapore — with the rest of the world combining for the other $42 trillion. By country, about two-thirds of this represents the output of 12 countries:

COUNTRY     WEALTH OUTPUT
U.S.                 $24.8 trillion
China               $18.5 trillion
Japan                 $5.4 trillion
Germany            $4.6 trillion
U.K.                    $3.4 trillion
India                   $3.3 trillion
France                $3.1 trillion
Canada               $2.2 trillion
Brazil                   $1.8 trillion
Russia                 $1.7 trillion
Australia              $1.7 trillion
Mexico                 $1.6 trillion
All other            $30.3 trillion

Regionally, the IMF projects Latin America’s “GDP” at $5 trillion, the Middle East’s $4 trillion, and sub-Saharan Africa’s $2 trillion; its guess for the fastest-growing areas are developing Asia at 5.8%, the Middle East at 4.1%, and Africa at 3.8%. Overall, the long-term trend has been for “developing” regions to catch up toward traditionally wealthy ones, though much of this reflects the growth of China specifically. This is even more true with the alternative “purchasing power parities” method of estimating GDP, which tries to standardize the value of locally purchased goods and services; it yields a world GDP at $153 trillion for 2022, with China the largest economy at $29 trillion.

Another approach, less complete but suggesting a somewhat different pattern, comes from Credit Suisse’s annual “Global Wealth Report.”  This tries to calculate the value of individually held assets — houses, bank accounts, cars, property, stock holdings, etc. — and sums them all up to $418 trillion worldwide as of the end of 2020.  This total is rising by about 6% or 7% per year, suggesting that in 2022 the “global wealth” of individuals might be $480 trillion. This report doesn’t include a lot of valuable things, though — say, government assets such as buildings, roads and bridges, and national parks, or corporate assets like the value of entertainment industry intellectual property or the commercial airplane fleet, vehicles — and also leaves out the assets of about 2 billion of the world’s poor.  Were such things included, this version of the “all the money in the world” figure might easily be close to $1 quadrillion.

By country and region, this wealth estimate tilts more toward “advanced economies” than the IMF’s GDP projections.  By Credit Suisse’s count, the largest ones (using their 2020 figures rather than trying to extrapolate the 2022 levels) are:

COUNTRY   WEALTH ESTIMATE
U.S.                 $126.3 trillion
China                 $74.9 trillion
Japan                 $26.9 trillion
Germany            $18.3 trillion
France                $15.0 trillion
U.K.                     $15.3 trillion
India                    $12.8 trillion
Canada                $9.9 trillion
Australia               $9.3 trillion
Korea                    $9.0 trillion

Where the IMF’s GDP projections find a narrowing gap between traditionally rich countries and the rest of the world, Credit Suisse’s wealth estimates suggest an at least temporarily widening one.  It notes a worldwide increase in wealth of about 6.0% in 2020.  What with rising home values and stock indexes, the jumps in North America and Europe were 9.1% and 9.8% specifically, meaning that these regions accounted for three-quarters of the world’s wealth growth that year.

 

 

FURTHER READING

The IMF’s World Economic Outlook database, released last October; the next update comes in April.

For a quick study on currency-basis vs. PPP-basis GDP, the IMF has an explanation here.

The Credit Suisse Global Wealth Report 2021 can be read here.

More on wealth “per capita”: By Credit Suisse’s measurement, the world’s richest people cluster conveniently around C.S.’ Zurich headquarters. Switzerland tops the world at $679,000 in wealth per person.  The United States ranks second at $505,000, followed by Hong Kong, Australia, and Denmark. (They toss out small tax havens such as Liechtenstein and Luxembourg, as too difficult to estimate.)  On the other hand, Credit Suisse’s figures find the U.S. total warped upward by a relatively few extremely wealthy people.  Using the wealth of the “median” adult rather than the “mean,” America places 23rd in the world with $79,000 per person, and Australia leads the world at $238,000 for the median.  Putting some names to this, a list maintained by Forbes Magazine of the world’s 100 wealthiest people reports that 9 of the top 10 are Americans, together holding $1.6 trillion.

Treasury Secretary Yellen (April 2021) on the Biden administration’s view of the global macroeconomic outlook and next policy steps.

A book recommendation: Diane Coyle’s “GDP: An Affection History” examines the history of the GDP concept, what it tells you, and some of the things it can’t help with.

 

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.

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

 

Trade Fact of the Week: 49 of the world’s 100 tallest buildings have opened in the last 5 years

Posted on by Alyssa Brown

FACT:

49 of the world’s 100 tallest buildings have opened in the last five years. 

 

THE NUMBERS: 

World’s tallest buildings*, 2600 BCE to present

YEAR          BUILDING HEIGHT
2010           2,716 feet (Burj Khalifa, UAE)  
2004          1,666 feet (Taipei 101, Taipei)
1998           1,482 feet (Petronas Towers, Kuala Lumpur)
1974           1,450 feet (Sears Tower, Chicago)
1972           1,368 feet (World Trade Center, New York)
1931            1,250 feet (Empire State Building, New York)
1930           1,046 feet (Chrysler Building, New York)
1913               792 feet (Woolworth Building, New York)
1908              612 feet (Singer Building, New York)
1901               548 feet (City Hall, Philadelphia)
1311                525 feet? (Lincoln Cathedral, UK)
~2550 BCE    481 feet (Great Pyramid, Egypt)

 

WHAT THEY MEAN:

Stone buildings can’t get much above 500 feet, since the weight of the upper tiers will crack and break the load-bearing pillars and walls beneath.  This is why the 481-foot Great Pyramid outside Cairo held the world’s-tallest-building title for 3,800 years, until topped by a few slightly higher Gothic cathedrals in the 13th century. The cathedrals in turn held their lead until the early 20th century — unless you count free-standing towers like the 555-foot Washington Monument (1884) or 986-foot Eiffel Tower (1889) — when Chicago engineers devised the steel-skeleton frame, using curtain walls held in place by steel girders to add another 750 feet of space, metal, and glass.

Computer-aided design and new alloys — for example, twisting facades to minimize wind torque, and lightweight cladding to resist heat — enabled another jump during the 1990s. The results accelerated in the last decade with a bloom, or rash, of ultra-high skyscrapers at 1500 feet and above, mostly in Asia and the Arabian Peninsula. As 2022 begins, 49 of the world’s 100 tallest buildings, and four of the top ten, have opened since 2017. Only 13 20th century buildings remain among the top 100, and only four opened before 1990.  Eleven-year-old Burj Khalifa in Dubai remains largest of all, more than a half-mile tall at 2,717 feet or 828 meters. By location, the top 100-list maintained by the New York-based Council on Tall Buildings and Urban Habitat breaks down as follows:

  • China: 45 of the top 100 and five of the top 10, including second-place Shanghai Tower (2015) at 2,073 feet and fourth-place Ping An Tower in Shenzhen (2017).  Hong Kong adds five more.
  • United Arab Emirates: 17, with Burj Khalifa’s 2,716 feet basically one old skyscraper’s height above the Shanghai Tower. Saudi Arabia’s competing “Kingdom Tower,” aiming for more than 1,000 meters (3,281 feet), stalled out at 1000 feet in 2018 after a contract dispute.
  • United States: 15, including 7 in New York — One World Trade Center, at 1,776 feet, is the world’s sixth-highest — along with 5 in Chicago, and one each in Philadelphia and Los Angeles.
  • The rest: 18, including five in Russia, four in Malaysia, four in Korea, two in Taiwan, and one each in Vietnam, Kuwait, and Saudi Arabia.

Once unrivalled in the count of very high buildings, the U.S. now ranks third. The American intellectual role in skyscraper design and construction, though, remains central.  Specialized U.S. architecture firms in Chicago, New York, New England, and California remain at the core of worldwide tall building design, having designed seven of the current top ten and 24 of the 49 most recent entries to the list.

 

Burj Khalifa in the UAE stands at 2,716 feet.

 

FURTHER READING

 

New York’s Council on Tall Building and Urban Habitat lists the world’s 100 tallest buildings.

Burj Khalifa features 160 floors, a spiral shape to minimize wind torque on the upper levels, specialized glass and heat-resistant glazed aluminum/stainless steel cladding on the outer walls.

San Francisco-based Gensler designed the 2,073-foot Shanghai Tower, with “sky gardens” on the 37th of its 127 floors. BEA unromantically considers this an export of “architectural services”; in this sense, U.S. exports average about $900 million per year, against $135 million in imports. Read more from Gensler on the Shanghai Tower.

One World Trade Center (2014), at 1,776 feet, ranks sixth worldwide (pictured below).

 

 

Is China slowing down? Central government puts a cap on ultra-tall, weird, or “xenocentric” buildings.

A brief survey of three earlier tall-building eras:

1. Pyramids & Ziggurats, Middle East, 2600 BCE to 2000 BCE:  Pyramid-building began with Djoser’s 203-foot Step Pyramid around 2650 BCE and peaked a century later with Khufu’s 481-foot Great Pyramid.  Just outside modern Cairo, this building held the world’s-tallest-building title for 3,800 years, even if nobody was around to measure and compare. Not just a lame pile of rocks, the G.P. is a “smart pyramid” with a complex interior design of chambers, tunnels, and ventilation shafts meant for practical, religious, and perhaps astronomical purposes, all pointing to sophisticated architectural drafting and engineering as well as lots of donkeys and human labor. The slightly younger ziggurats in neighboring Sumer and Akkad were made of brick. The squishier material means they couldn’t be as tall, and topped out at about 170 feet, with small temples on top.

Egypt’s Great Pyramid homepage can be found here.

The Ziggurat of Ur is solid brick all the way through, with a (long-vanished) moon goddess temple on top, built around 2100 BCE per order of Sumerian King Ur-Nammu.  Read more from Iraq Heritage.

Book recommendation: The Babylon ziggurat “Etemanki” supposedly had “hanging gardens”, like the Shanghai Tower but open-air. Herodotus describes the ziggurat — eight tiers also with a temple on top — but doesn’t mention any gardens.  British Assyriologist Stephanie Dalley investigates, and concludes that they probably existed but were somewhere else.

2. Gothic Cathedrals, Europe, 1200 to 1400: “It was as though the world had shaken herself and cast off her old age, and clothed herself everywhere in a white garment of churches…”  Large buildings with enormous glass windows, hundred-foot stone pillars, and flying buttresses to relieve stress on load-bearing walls.  Designed without printing presses, standardized weights and measures, or mathematics beyond flat-plane geometry, cathedrals overtook pyramids in the 14th century and with the exception of Philadelphia’s 548-foot City Hall (1901) remain the world’s tallest stone-on-stone buildings. Lincoln Cathedral, completed in 1311, is said to been the highest Gothic cathedral, with a central spire rising to 525 feet. But the spire fell down in 1549 so we can’t be sure. The largest one still standing is Germany’s 512-foot Ulm Cathedral.

Read about the Ulm Cathedral.

Read about Abbot Sugar and the 12th-century Gothic boom.

3. Skyscrapers, United States, 1908 to 1974: Steel-skeleton buildings surpassed cathedrals with the completion of the Singer Building (referring to the sewing machine company, not the arts) in New York City in 1908. The Otis hydraulic elevator system made sure people could get to the top floors, and architects devoted occasional floors to water tanks and pumps so penthouse suites and executive offices could get toilets that flush and faucets that spout water rather than sucking air. Woolworth quickly overtopped Singer, Chrysler hit 1,000 feet in 1930, then the Empire State Building in 1931.

Read more about the Empire State Building.

Chicago’s William LeBaron Jenney, a Union army engineering corps vet, and Paris-trained architect, designed the first girders-and-curtain wall “skyscraper” — the 180-foot Home Insurance Building on South LaSalle, demolished to make way for the Field Building in 1931.

 

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.

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

 

Trade Fact of the Week: Remittances from overseas workers to poor and middle-income countries are double the size of all foreign aid programs

Posted on by Alyssa Brown

FACT:

Remittances from overseas workers to poor and middle-income countries are double the size of all foreign aid programs.

 

THE NUMBERS: 

Central American GDP and international income, 2020

$200 billion       GDP
 $45.6 billion     Exports
 $25.3 billion*    Remittances from migrants
   $1.6 billion      Foreign aid
   $3.4 billion     Foreign Direct Investment

* Assuming about 95% of remittances to Central America came from the U.S. in 2020, as the World Bank has estimated for 2017 (most recent year available).

 

WHAT THEY MEAN:

Who changes the world? Governments, intellectuals, scientists, entrepreneurs, NGOs, and charities? Doubtless they do their part. But do not discount the power and generosity of humbler, less celebrated people. An example:

Small banks and wire services in Central American neighborhoods around the U.S. are busy this week, as Christmas money flows south from places like Maryland’s Wheaton or LA’s Pico Union to Chalatenango, Intipuca, and La Union. World Bank research suggests that these “remittance” flows to the five Central American republics totaled $25 billion in 2021, with about 95% of this total coming from the United States. About $55 million will likewise move from the homes of security guards and drivers in New Zealand to small Pacific island towns in Tonga and Samoa; $11.6 billion will arrive from the Gulf states to places like Medan and Dhaka, sent by Indonesian and Bangladeshi maids, clerks, nurses, and construction workers.

How significant is this? Three ways to answer the question:

(1)    In the economic lives of recipient countries, sometimes very large. Central America joins the Pacific Islands, Central Asia, and the Caribbean among the world’s most remittance-reliant regions, and so provides an illustrative (if somewhat extreme) example. The $25 billion in remittance flows at the north end of the wire make up about 12.5% of a $200 billion regional ‘GDP’ (combining Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica) with peaks of 24% of GDP for El Salvador and Honduras.  Meanwhile, in 2020 the five countries together (a) earned $45 billion from exports; (b) received about $1.6 billion in much-debated but relatively modest flows of foreign aid, and (c) received $3.4 billion in foreign direct investment from international businesses.  Thus at the macro end, remittances from migrant workers and their families rank below (but not far below) trade as a source of income, and are five times the combined value of aid and FDI.

Moving the lens back, the picture shifts but does not fundamentally change.  Twelve countries rely on remittances for more than 20% of GDP, with Tonga at 35% and then Somalia, Lebanon, South Sudan, Kyrgyzstan, Tajikistan, El Salvador, Honduras, Nepal, Haiti, Jamaica, and Lesotho.  If we combine all low- and middle-income countries (using the World Bank definition but excluding China, Russia, and EU members Bulgaria and Romania), trade is easily the largest earner, with remittances a fairly distant second and about equal to FDI and foreign aid combined:

$14,210 billion       GDP
$3,850 billion       Exports
$462 billion       Remittances
$267 billion       Foreign Direct Investment
$175-$250 billion*  Foreign Aid

* The aid total depends upon how one estimates Chinese aid programs.  The OECD reports $175 billion from OECD members, plus Saudi Arabia, the UAE, Taiwan, and several other non-OECD donors. The scale of Chinese aid programs is uncertain, but probably large, with private-sector estimates going up to a maximum of ~$80 billion depending on one’s definition of Belt and Road Initiative loans. 

(2)     From the donor perspective, quite a lot.  A Honduran-American population of about 1 million, for example, likely sent $5 billion in remittances this year.  The median income for adult workers, by a Pew Research estimate, is around $25,000, which suggests that workers spent as much as a fifth of their earnings on remittances.

(3)    From the recipient perspective, often of great value:  Remittances seem most valuable to the poor and lower-middle class.  Central America again provides some interesting examples.  About 20% of families in El Salvador families receive remittances.  A 2016 report for the Inter-American Development Bank reported that 70% of these recipients are women; that 47% live in rural provinces; that 70% have primary education or less, and that 79% are poor or “vulnerable”.

In this holiday season, one need not doubt the potential of thoughtful governments, energetic intellectuals and scientists, or entrepreneurs, NGOs and charities to change the world for the better.  But the populist force of quite humble communities of migrant workers — tens of millions of Salvadoran waitresses and construction workers, Filipina nurses, Indonesian maids, Haitian cooks and security guards, Nigerian taxi drivers and Jordanian accountants — looks to be at least their match.

Closing note:  PPI’s Trade Fact service will be closed next week and return in the New Year. We wish friends and readers a happy and peaceful holiday, grateful for our good fortune and mindful of those who have less.

 

 

FURTHER READING

 

Overview

The World Bank’s remittances page has figures by region and country for 2020; $701 billion in remittance flows, or about 1% of the world’s $75 trillion GDP.  Bank experts trace $471 billion back to the source, with $70 billion of this coming from the United States; by comparison, USAID reports $51 billion in official U.S. foreign aid.

The Inter-American Development Bank has a snapshot of Salvadoran remittance recipients (70% women, 47% rural, 70% with primary education or less, 79% poor or “vulnerable”).

The World Bank’s bilateral remittance tool, including figures for flows to and from all countries.

Pew Research has a statistical snapshot of Salvadoran-Americans and other Hispanic communities.

 

Countries & regions

The White House lays out its “root causes” program for Central American migration.

The Kingdom of Tonga (population 105,000, an hour’s flight southeast of Fiji when service is available) is the country most reliant on remittances, accounting for 48% of GDP, with money coming principally from New Zealand, the U.S., and Australia.

Miami-based Haitian Times on a COVID-era lifeline for Haiti.

$1 billion a year flows out of Hong Kong to recipients, many in the Philippines and Indonesia, read more about The Hong Kong Domestic Helpers Campaign.

 

For comparison: 

Exports: The WTO’s World Trade Statistical Review has export and import figures.

Aid: The OECD’s Development Assistance Council page details $175 billion from OECD members and other sources (though not China) in 2020 aid by recipient.

Aid: The U.S. Agency for International Development’s data dashboard has U.S. foreign assistance figures by country, project, and topic.

Investment: UNCTAD’s 2021 World Investment Report

 

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.

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

 

Trade Fact of the Week: 1,400 satellites will go into orbit this year

Posted on by Alyssa Brown

FACT:

1,400 satellites will go into orbit this year.

 

THE NUMBERS: 

Satellites launched into orbit per year

1,400   2021

    115    2000-2010 average

 

WHAT THEY MEAN:

This month’s glamor rocket, rising next Wednesday from the Arianespace launch site in French Guiana, is an “Ariane 5”: a 170-foot tower weighing 780 tons and carrying 180 tons of liquid hydrogen/liquid oxygen fuel. Operated by the European Space Agency, its task is to lift the 44-foot, 7-ton, $9.7 billion James Webb Space Telescope off the Earth (pictured below), and direct it to “Lagrange 2,” a stable orbital a million miles from the Earth and well beyond the Moon. Successor to the Hubble, the Webb carries a 360-kilo, 21-foot-in-diameter mirror faced with ultra-polished beryllium, along with a set of four detection instruments designed at NASA’s Goddard Space Center in Maryland. For the next decade, these will analyze infrared radiation in hopes of understanding exoplanet atmospheres, observing star and galaxy formation, investigating “dark matter,” and examine the very early universe.

The Webb is very much in the Gemini, Apollo, Skylab, Voyager, and Mars Rover tradition: a government-led, big-science. international (NASA: the Webb is an “international collaboration among NASA, the European Space Agency (ESA), and the Canadian Space Agency (CSA) abstract-knowledge-and-benefit-of-humanity project. Around this newest example of a familiar tradition, however, are hundreds of illustrations of a quite different and much newer space concept — about 1,400 more satellite launches, the large majority by private-sector rocket companies carrying small satellites meant for very prosaic commercial use rather than scientific exploration or public policy. Examples from this month’s launch schedule include:

> RocketLab Electron, from Mahia in New Zealand, carrying two communications satellites for BlackSky’s earth observation satellite network. This provides imaging services via a network of two dozen small satellites — about 135 pounds, smaller than the 184-pound Sputnik satellite of 1957 — orbiting about 270 miles above the Earth.

> Virgin LauncherOne, launched not from a pad on the ground but from a converted Boeing 747 flown from California, carrying two “nano-satellites” weighing about 5 pounds for Polish firm SatRevolution (along with eight for the U.S military). SatRevolution eventually hopes for a network of 1,024 low-orbit nanosats providing imaging to agricultural, business, and government clients.

> Space Falcon 9 from Cape Canaveral, with 51 small satellites for SpaceX’s “Starlink” system, meant as part of a future network of 42,000 small satellites at 350 miles providing “video calls, online gaming, streaming, and other high data rate activities” to areas the global fiber-optic cable system that carries most Internet traffic does not reach, at a projected cost of $10 billion or so — that is, about the same as the Webb.

Wednesday’s launch, then, underlines the continuing strength and romantic appeal of the 65-year-old tradition of government-led, science-first space exploration. This year’s parallel launches of its hundreds of small private-sector cousins suggest that, for the first time, civilian commercial space industry now operates on the same scale.

* Official counts of satellites are surprisingly inconsistent. The UN’s count reports 8,089 man-made objects in orbit at the moment; the Union of Concerned Scientists says “more than 4,550.” Either way, adding 1,400 more in a single year is a lot.

 

 

FURTHER READING

 

NASA’s guide to the James Webb Space Telescope.

The EU’s Arianespace reports on progress toward launch.

The Canadian Space Agency’s guidance system and spectrographic instrument.

 

Private enterprise and civilian industry 

 

Calendar and count

Online journal Spaceflight Now tracks launches and payloads.

A United Nations index of 8,089 objects launched into space since 1957.

 

And last … 

As the Webb heads for its million-mile orbit and commercial satellite networks multiply, a burning question: Which generation-old sci-fi show saw the future best?  Two nominees:
  • “Boldly go”:  Deep space exploration, international cooperation, frontiers of knowledge, and the common good
  • “20 Minutes into the Future”:  Ubiquitous disposable low-orbit satellites, ruthless media competition, vast streams of addictive low-quality information, and social fracture

 

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.

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

 

Johnson for The Hill: To tame inflation, Biden should cut tariffs

Posted on by The Progressive Policy Institute

By Jeremiah Johnson

Despite a strong economy with unemployment falling and GDP rapidly growing, and despite steady progress on his ambitious agenda, President Biden’s popularity has fallen. Inflation is at a multi-decade high, and worries about the cost of food, gas and overall inflation are likely at the center of that dissatisfaction. Americans are concerned about the rising prices of the everyday things they need.

Biden is in a tough spot with regards to inflation. It’s not a realistic option to simply ignore it or tell voters not to worry about it. Blaming it on corporate greed, as Sen. Elizabeth Warren (D-Mass.) does, is self-evidently ridiculous (Did corporate greed disappear during all the years that inflation was low?) and doesn’t do anything to address the issue.

And while there are policies that can fight inflation, those often come with serious drawbacks. Fiscal and monetary policy responses are something Biden can’t do alone — those powers lie with Congress and with an independent Federal Reserve. And even if Biden could successfully pressure Congress and the Fed into anti-inflation policy, those policies often come with the side effect of slowing economic growth, something that no president wants to do. Luckily, there is a policy change that can be made without Congress and without harming growth — reducing tariffs.

Read the full piece in The Hill.

PPI’s Trade Fact of the Week: Women head 25 trade and commerce ministries.

Posted on by The Progressive Policy Institute

FACT:

Women head 25 trade and commerce ministries.

 

THE NUMBERS: 

Women serving as Trade or Commerce Minister:

196   Countries and territories in CIA World Leaders Directory

25     Countries with Women as Trade/Commerce Ministers, December 2021

25     Countries with Women as Trade/Commerce Ministers, March 2010

 

WHAT THEY MEAN:

At some future date — perhaps next spring — the World Trade Organization’s 12th Ministerial Conference will convene after two COVID-forced postponements. Known for short as “MC-12,” the event will join the Trade Ministers of the 164 WTO members (in principle; in practice some don’t show, and some members don’t have trade or commerce ministries) in hopes to agree on fishery subsidy reform, trade and health, and institutional reform. Whenever it meets, and whatever the outcomes, two things are for certain:

(1)    Dr. Ngozi Okonjo-Iweala (pictured below), appointed Director-General this past January, will be the first woman to convene a WTO Ministerial Conference. A former Nigerian Finance Minister, academic, and World Bank official, she is the first female Director-General among the 10 “DG’s” in the 73-year history of the WTO and its predecessor, the GATT (General Agreement on Tariffs and Trade).

(2)    Dr. Okonjo-Iweala won’t have a ton of female company among the assembled Ministers.  Using the CIA’s online “Directory of World Leaders” (a useful but somewhat shaky source; see below), PPI Trade & Global Markets staff count 19 women serving as Trade Minister around the world this month, plus at least six more with broader jobs — Ministers of Economy, Foreign Affairs, etc. — which also cover trade.  The 25-Minister total, representing about 12% of the world’s Cabinet-level trade positions, is identical to the count in a Trade Fact dating to 2010.

Why do so few women get these jobs? Posing the question this way is probably an error: Trade ministries are not an odd exception, but pretty typical. The CIA’s Directory finds women holding about 11% of the world’s defense ministries, 6% of finance ministries, 12% of health ministries, 15% of education ministries, and so on. Looking back, the last decade looks like one of stasis or even regression — women’s share of economic and law positions seems roughly stable; the share in health, culture, and education jobs fell from about 25% to 15%; and appointments in defense, police, and finance appointments remain particularly rare.

Overall, a pretty static and glum environment — but three bright spots. At the very top, publics appear at least a bit more open to choosing women as national leaders, with 25 serving as heads of government.  At home, the United States looks unusually good in economic diplomacy just now, with U.S. Trade Representative Katharine Tai representing the U.S. whenever MC-12 does convene; the Treasury Department run by Janet Yellen (also a former Federal Reserve chief and lead White House economist); and the Commerce Department by Gina Raimondo. And top-tier international organizations also show progress, if from a truly dismal base. As of 2010, no female had ever appeared among the lists of UN Secretaries-General, International Monetary Fund Managing Directors, World Bank Presidents, WTO and GATT Directors-General, or International Labor Organization Directors-General. The past decade has brought three such appointments (among eight total): those of Christine Lagarde in 2011 and Kristalina Georgieva in 2019 at the IMF, and most recently that of Dr. Okonjo-Iweala at the WTO.  She gets the last word: “Gender equality is a fundamental human rights issue and also an economic empowerment issue. We should all work harder.”

 

 

FURTHER READING

 

Dr. Ngozi Okonjo-Iweala in remarks for International Women’s Day (March 21), on the WTO, trade in the COVID-19 pandemic, the positive role trade integration appears to have on women workers, and pandemic lessons on women as national leaders.

Read about the UN on women’s leadership and political participation.

 

Three working women
 
U.S. Trade Representative Katharine Tai outlines the Biden Administration’s gender equity policy and trade contributions, and reflects on early life lessons, at the Summit of Democracies this morning.

Treasury Secretary Janet Yellen discusses opportunities and challenges for women in the economics profession with IMF Managing Director Georgieva (“many obstacles,” and “a cultural problem in the profession”).

And remarks from Commerce Secretary Gina Raimondo on competitiveness, workforce development, innovation, and equity.

 

 

From PPI, the Mosaic Economic Project

Mosaic provides training in media and publishing, network-building, and other services for two classes of 8-12 women in economics each year. Program Director Jasmine Stoughton explains on the Neoliberal Project podcast.

… Applications open for the February 2022 Mosaic cohort can be found here.… and 2021 Mosaic cohort member Aditi Mohapatra, Managing Director of Business for Social Responsibility, on next-decade agenda for private-sector hiring equity.

 

Around the world 

The inaugural “USMCA” Ministerial meeting joins Amb. Tai with Canadian Trade Minister Mary Ng and Mexican Economy Minister Tatiana Clouthier.

Khadija bint M’barek Fall on her work as Mauritania’s Commerce Minister.

Lithuania’s Ausrine Armonaite encourages girls to choose science careers.

Read about Colombia’s Maria Ximena Lombana Villalba.

Taiwan’s Economics Minister Wang Mei-hua pitches a bilateral trade agreement with the U.S. as potential solution to semiconductor shortages.

Kenya’s Cabinet Secretary for Commerce Betty Maina on Kenyan industry’s response to COVID.

 

A source note

The CIA’s online Directory of the world’s presidents, Cabinet ministers, Central Bank chiefs, and other great and wise is a valuable and possibly unique on-line public resource.  The Agency’s claim that it is “updated weekly”, however, is a bold overstatement.  As of today (Dec. 8) it still cites Benjamin Netanyahu as Israeli Prime Minister, though Naftali Bennett has had the job for 25 weeks.  The Directory likewise notes the dissolution of the Malaysian government in March 2021 but lists no Ministers at all.  It also skips some Ministers, such as Canadian Trade Minister Mary Ng and Mexican Economy Secretary Tania Clouthier.  Hopefully the IC knows the identity of Israel’s PM, is aware that Malaysia has a government, is familiar with the top trade negotiators for Mexico and Canada, and has just been busy with other important matters.  The percentages above rest on this Directory, though we’ve rechecked in general and updated our count of 25 Trade Ministers by examining national websites.  Nonetheless, apologies if we missed anyone. The CIA’s Directory of World Leaders and Cabinet Officers can be found here.

 

And last, returning to Geneva and the WTO for some (very) long-term perspective 

In 1558, two miles south down Quai Wilson and over the Rhone from Dr. Okonjo-Iweala’s office, Presbyterian Church father John Knox used a temporary Geneva base to write up his First Blast of the Trumpet Against the Monstrous Regiment of Women.  Mr. Knox’s 22,000-word bid for “worst book anywhere, ever” makes three arguments against government appointments, and especially against national leadership roles, for women:

   Selective Citation of Authority: The Bible does not place women in authority-roles; ergo, modern society also shouldn’t.  Except, Knox admits, for prophetess Deborah, queens Athaliah and Jezebel, and lots of others. He argues that, for various hand-waving reasons, they shouldn’t really count.
   Analogy:  Men are like the “head” of a family, and a country is like a family. If women are in charge, a country is metaphorically walking on its hands, with its “head” down and its “feet” on top.
   Verbal Abuse: A country ruled by women is “monstriferous,” and “contumely to God.”
   Knox’s rant can be read here.
   …and back in the 21st century, Dr. Okonjo-Iweala and former Australian PM Julia Gillard, joint authors of a February book on women in national leadership, discuss the topic at Brookings.
Special note: Research and drafting for this Fact by Lisa Ly, Social Policy Intern for the Progressive Policy Institute. Lisa is currently a Master of Public Policy candidate at The George Washington University.

 

 

 

ICYMI:
Clogged ports, empty truck cabs:
Good problems to have

by Ed Gresser, PPI Vice President
and Director for Trade and Global Markets
for New York Daily News

Looking out at the Pacific this year, worried farmers see giant cargo ships turning around empty, leaving their wine, butter and almond cargoes on the docks and at least $1.5 billion in exports lost. Meanwhile, 80-ship pileups off the coast of Southern California mean weeks or even months of delays unloading industrial inputs and consumer goods; and with truckers and warehouse workers quitting their jobs at record rates, full containers are piling up in fields and parking lots.

The port problems are complicated and serious enough to worry even President Biden, who has given speeches and put out policies to head off complaints about everything from empty shelves during Christmas shopping weeks to lost farm exports and inflationary bottlenecks.

READ MORE

 

TOP TRADE RETWEET:

 

Follow the World Trade Organization

 

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.

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

  

Gresser for NYDN: Clogged ports, empty truck cabs: Good problems to have

Posted on by The Progressive Policy Institute

By Ed Gresser

 

Looking out at the Pacific this year, worried farmers see giant cargo ships turning around empty, leaving their wine, butter and almond cargoes on the docks and at least $1.5 billion in exports lost. Meanwhile, 80-ship pileups off the coast of Southern California mean weeks or even months of delays unloading industrial inputs and consumer goods; and with truckers and warehouse workers quitting their jobs at record rates, full containers are piling up in fields and parking lots.

The port problems are complicated and serious enough to worry even President Biden, who has given speeches and put out policies to head off complaints about everything from empty shelves during Christmas shopping weeks to lost farm exports and inflationary bottlenecks.

But they’re also the sort of problems administrations are happy to have. This is because they’re evidence of confident consumers, workers finding new opportunities, and a successful effort, at least so far, by the Biden administration’s work to create a strong economy that grows from the middle out.

 

Read the full piece in New York Daily News.

PPI’s Trade Fact of the Week: Trump tariff increases contribution to inflation: ~0.5%?

Posted on by The Progressive Policy Institute

FACT:

Trump tariff increases contribution to inflation: ~0.5%?

THE NUMBERS: 

U.S. tariff collection

2021:        $85.5 billion?*
2016:        $32.2 billion

* Estimated, based on available tariff data for January-September 2021

WHAT THEY MEAN:

The Bureau of Labor Statistics’ startling October 2021 Consumer Price Index report found “the largest 12-month increase [in consumer prices] since the period ending November 1990” — specifically, price inflation of 6.2% from October 2020 through October 2021. The report’s finer detail shows inflation at different rates in different parts of the economy: 30% for energy, 3.2% for services, 5.3% for food, 8.4% for goods excluding food and energy, 9.2% for automobiles, and so on. What sort of role (if any) did tariffs play in this?

Some data first: In 2016, the U.S. “trade-weighted average” tariff was 1.4%. (Taking that year’s $32 billion in tariff revenue, and dividing it by the U.S.’ $2.21 trillion in goods imports.)  In January 2017, the Congressional Budget Office projected that at the same rates, tariff revenue in 2021 would be $42 billion, with income rising slowly along with economic growth. Then, from late 2018 through mid-2020, the Trump administration imposed a series of tariffs: “Section 301” tariffs from 7.5% to 25% on about $350 billion in Chinese imports and “Section 232” tariffs of 25% on steel and 10% on aluminum, along with unusual “safeguard” and “countervailing duty” tariffs on washing machines, solar panels, and Canadian lumber, which are more typical trade policy steps. By 2019, the U.S.’ average tariff had doubled to 2.8%, bringing in a likely $86 billion on about $2.9 trillion in goods imports this year.  Of the extra $54 billion, $46 billion comes from tariffs on Chinese goods, and $1.9 billion from tariffs on steel and aluminum (excluding Chinese-produced metals.)

The “232” and “301” tariffs (so-called for the sections of U.S. trade law used to impose them) differ from the U.S.’ permanent “MFN” tariff system in an important way. The permanent U.S. tariff system mainly taxes retailers and shoppers, since its high tariffs are dominated by clothes, shoes, and a few other home goods.  On the other hand, it imposes relatively few taxes on industrial inputs and raw materials, and almost none of those it does charge are very high. The Trump tariffs, while they also cover many consumer products, hit many more industrial inputs and capital goods.  A few examples, again annualizing 2021 revenue figures from the available 9 months of data, illustrate the sources of the extra $54 billion in some detail:

These sorts of things, obviously, are bought more by industrial customers making various other products — machinery manufacturers, automakers, construction firms, air conditioner factories (and repair shops) — than by families.  Economists typically find that import prices of products subject to tariffs did not fall, so the buyers absorbed pretty much the full cost of the tariffs, meaning in turn that they will eventually raise prices of the things they make. A study of the tariff increases on Chinese goods in by San Francisco Federal Reserve staff economists in March 2019 – about halfway through the cycle of tariffs and retaliations — predicted as much, finding a likely consumer price increase of 0.1% economy-wide, and a business investment goods price increase of 0.4%. It also noted that more tariffs would mean more inflation, up to 0.4% in consumer prices and 1.4% in business investment goods were the administration to impose an across-the-board tariff of 25% on all Chinese goods.

More China tariffs did follow over the course of 2019, but not to that hypothetical level; on the other hand, the S.F. Fed study didn’t cover the metals tariffs. Taking this as a guide, the actual tariff contribution to inflation would be likely lie somewhere between the study’s initial 0.1% economy-wide estimate and its hypothetical 0.4%. Adding in the metals might reasonably bring it to 0.5%. Essentially, a secondary but noticeable contribution, presumably with a somewhat higher contribution to the BLS’ actual 8.4% inflation in goods-excluding energy and food.

 

 

FURTHER READING

  • The Bureau of Labor Statistics on the Consumer Price Index for October 2020 to October 2021 can be read here.
  • San Francisco Federal Reserve staff study potential inflationary impacts of tariffs, March 2019. Read more here.
  • The Congressional Budget Office looks at broader economic impacts, August 2019. (Conclusion: “On balance, in CBO’s projections, the trade barriers imposed since January 2018 reduce both real output and real household income. By 2020, they reduce the level of real U.S. GDP by roughly 0.3 percent and reduce average real household income by $580 (in 2019 dollars. Beyond 2020, CBO expects those effects to wane as businesses adjust their supply chains.  By 2029, in CBO’s projections, the tariffs lower the level of real U.S. GDP by 0.1 percent and the level of real household income by 0.2 percent.”) Read the CBO’s take.
  • Academics Pablo Fajgenbaum, Pinelopi Goldberg, Patrick Kennedy, and Amit Khandelwal examine the tariffs and their impact, finding (among much else) that U.S. buyers pay it all.
  • Peterson Institute’s Chad Bown in depth on the China tariffs can be read here.

 

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.

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

PPI’s Trade Fact of the Week: U.S. farm export losses as shipping companies decline cargoes, as of mid-year 2021: $1.5 billion?

Posted on by Alyssa Brown

FACT:

U.S. farm export losses as shipping companies decline cargoes, as of mid-year 2021: $1.5 billion?

THE NUMBERS: 

Containers* arriving at Port of Los Angeles:

4.72 million:      January-October 2021
3.48 million:      January-October 2020
3.97 million:      January-October 2019

* Counted in TEUs (“twenty-foot equivalent units”, for the standard 20’ x 8’ x 8.5’ shipping container)

WHAT THEY MEAN:

D.C.’s taxi cabs and their dispatchers obey a public-interest rule:  If you wish to serve the lucrative routes — say, Dulles-to-Mayflower Hotel and back — you must also agree to pick up fares from the neighborhoods. Representatives John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.), in their proposed Ocean Shipping Reform Act, pose a question: Shouldn’t the world’s container ships live by a similar rule, requiring them to carry American export cargoes as well as inbound containers?

Statistics put out monthly by American container ports suggest why they ask this question.  From January through October, the Port of Los Angeles — the busiest U.S. container port — took in 4.72 million containers (again in TEUs). This is a bigger total than all but one of LA’s full-year incoming container counts, and based on a daily average of about 15,500 arriving containers, the 4.87 million-TEU record set in 2018 probably fell two weeks ago.  Statistics are much the same at the second-busiest port — Long Beach, ten minutes’ drive east on the Seaside Freeway — which likely broke its own annual record last weekend.  Meanwhile, truckers and warehouse workers have been leaving their jobs all year for better options: 1.4 million workers in the Bureau of Labor Statistics’ transport/warehousing/utility sector have quit through September, easily breaking the 1.1 million full-year record set in 2002.  So with record arrivals on one hand and bottlenecks on the other, the ports have clogged up. The resulting worries about Christmas inventories and intra-U.S. supply bottlenecks are intense enough to worry even the President of the United States.

A less publicized consequence of the incoming-container surge is a perverse incentive for shipping companies:  they’re tempted to ignore U.S. exporters. Fees to ferry a container from Asia to the West Coast, normally between $2,000 and $3,000, have run at $15,000 for much of this year and at times hit $20,000.  With import income so high, a ship can often earn more money by turning around empty to refill in Asia than by loading a waiting U.S. export cargo for $3,000 or so.  September’s Port of Los Angeles container report provides a vivid illustration: it counted 434,294 outbound containers, of which 358,351 traveled empty, and only 75,713 carrying U.S. cargo — the Port’s lowest count of full export containers since the autumn of 2002.

This hits farm exporters who use containers especially hard, as producers of meats, dairy, wines, tree nuts, and specialty crops often require quick pickup of perishable goods.  As of mid-year they reported losing $1.5 billion in exports. To put this in perspective, calculations by the Department of Agriculture’s Economic Research Service done for 2019 suggest that each $1.5 billion in agricultural exports meant about $1.7 billion in economic activity for the U.S., including about 12,000 jobs and $500 million in farm income.

Hence, the bill Reps. Garamendi and Johnson propose.  Returning to the taxicab analogy, a D.C. taxi company fielding a request for dispatch must accept the fare (unless the customer is belligerent, intoxicated, etc.) or face a $250 civil penalty.  Maritime shipping operates on an obviously different scale — a single medium-sized container ship could carry all 7,151 D.C. cabs if it wanted to**, and there are 6,293 such ships on the water — but also has some similarities.  Like taxicabs, the mighty vessels run by Maersk, Evergreen, COSCO, MSC et al. are “common carriers” given a right to serve U.S. ports. Under the bill, this right would come with a complementary responsibility to serve American exporters and could not “unreasonably decline export cargo bookings if such cargo can be loaded safety and timely and carried on a vessel scheduled for such cargo’s immediate destination” without becoming liable to penalties by the Federal Maritime Commission.

** Yes, we know, not a likely real-world scenario.  Cars aren’t easy to squish into containers (though it can be done if necessary), and usually travel on roll-on/roll-off ships. Just meant as a visual.

 

 

FURTHER READING

Legislation

From Reps. Garamendi and Johnson, read the Ocean Shipping Reform Act.

A supportive White House post can be read here.

The Federal Maritime Commission, tasked with regulating ocean carriers and (should the Garamendi/Johnson bill pass) enforcing new rules.

Agriculture and the export economy

Farm Bureau economist Daniel Munch on the West Coast port challenges and their impact on American agriculture, read the piece here.

The New York Times’ Ana Swanson (subs. req.) has the view from the California dairy farm, read the piece here.

And the USDA’s most recent investigation of ag exports and their economic impact at home can be read here.

Ports and ships

Container statistics from the Port of Los Angeles can be found here.

UNCTAD’s 2021 Review of Maritime Transport, with examinations of the impact of COVID-19 on 2020 shipping and cargo, the 2021 rebound, and some glum detail on U.S. ports.  The three busiest U.S. container ports – Los Angeles, Long Beach, and New York – handle 25 million containers per year, about as many as China’s 4th-busiest port (Shenzhen) does all by itself.  The world’s top two — Shanghai and Singapore — manage 44 million TEU and 37 million TEU, respectively.

Help on the way — The White House summarizes the maritime investment sections of the bipartisan Infrastructure Investment & Jobs Act.

And last …

What are container ships really like?  Horatio Clare’s Down to the Sea in Ships (2015) recounts a trip on the Gerd Maersk, a 6,600-TEU ship built in 2006, on a UK-through-Suez-to-Malaysia-Vietnam-China-to-Los Angeles rout. Detail on crew life (Filipino ratings, European and Indian officers; no alcohol at any time), cargo loading, rules for avoiding piracy, the approach to the Port of L.A., etc. The average (mean) capacity of a container ship this year is about 4,000 TEU, placing Gerd Maersk in the larger-than-average class able in theory to carry *nearly* all of D.C.’s taxicabs. The biggest current ships are the three Japanese-built 23,992-TEU Ace series delivered to Taiwan’s Evergreen line this year; 1,312 feet long, 212 feet wide, and 108 feet deep, they could carry the whole D.C. cab fleet and still be two-thirds empty.

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: ‘Squid Game’ outdrew the World Series this year – Nov. 17, 2021

Posted on by The Progressive Policy Institute

FACT:

“Squid Game” outdrew the World Series this year.

THE NUMBERS: 

111 million:  Squid Game viewers, September/October 2021
70 million:    World Series viewers, October/November 2021

WHAT THEY MEAN:

Korea-made drama Squid Game, which premiered Sept. 17 on Netflix, centers on a contest in which 456 impoverished and debt-ridden players compete for a ₩45.6 billion prize (~$38 million) in a series of children’s games. The losing players are ruthlessly executed. (Shot, stabbed, thrown off a bridge, etc.; more variety presumably in Season 2.) The show’s 9-episode Season 1 run logged over 111 million views, a count not only well above Netflix’s earlier 82-million-viewer record (the 2020 scheming-18th century-Brit-aristocrat series Bridgerton), but outpacing the Atlanta-v.-Houston World Series.  Americans weren’t alone in their enthusiasm: Squid Game was also Netflix’s top show in Denmark, Bolivia, Kuwait and Bahrain, India, Bulgaria, and 44 other countries.

Not a unique triumph for Korean arts, Squid Game is an especially visible example of the much larger “Hallyu Wave” phenomenon. Hallyu, translated as “Korean Wave,” is shorthand for the international appeal of South Korean pop culture, first in Japan, China, Taiwan, and Southeast Asia and more recently in the U.S., Europe, Latin America, and the Middle East.  At the cultural high end, last year’s Parasite — a satire on class disparity and wealth inequality, pitting scheming low-income moochers against a greedy and clueless rich family — was the first Asian and first non-English-language film to win a Best Picture Oscar.  At the somewhat less-high end, five of Billboard’s 10 non-English No. 1 albums since 1958 have come since 2018 from K-Pop boy-band groups BTS and SuperM. In between are clothing styles, video games, cosmetics, band and artist merchandise, and other cultural and lifestyle products.

Korean government economists calculate the value of Hallyu exports at $12 billion in 2020.  This would still be well below the $36 billion in exports from Korea’s mighty auto factories, but within sight and growing by 22 percent per year. More is presumably ahead; as one 2021 indicator, Netflix invested nearly $500 million in the Korean entertainment industry and opened two studio facilities in South Korea.

What explains Hallyu’s success?  Some analysis credits Korean government support and organization.  The Korea Herald, reporting on the creation of a “Hallyu Department” in the Ministry of Culture, Sports, and Tourism last year scoffs at this idea: “it is not the first time that the government is attempting to play a role in the promotion of the Korean wave, each time against resistance from the industry who feared government meddling in what is essentially a private sector initiative may have the opposite effect”.  Rather, the success of Korean culture looks organic, matching (a) appealing plotting, cliffhanger endings, and striking visuals with (b) new forms of access as widespread Internet use, secure financial services, and open data flow enable online streaming services such as Netflix and Hulu to compete to offer their subscribers an array of films, music, and TV, and (c) devoted and highly organized international fan bases using social media to evangelize and market to one another.

 

 

FURTHER READING

 

Read Squid Game ratings and rankings by country from Netflix, here.Read more background about Hallyu Wave, here.

Policy or not?

The Carnegie Endowment looks at Korean government support for cultural industry and Hallyu as soft-power policy, read more here.

The Korea Herald is skeptical, read more here.

The Korea Economic Institute sides with the Herald, viewing government promotion Hallyu as largely “mistargeted,” “ineffectual,” and annoying to fans, read more here.

Fans and artists

Time on U.S. K-pop fans as a 2020 political force, read here.

Navigating through K-pop fandom with fan clubs and fan cafes, read here.

For insight on Korean filmmaking and its international appeal, read here.

And for the Korean Cultural Center/DC’s October Hallyu & K-Pop demo, click here.

 

Special note: Research and drafting for this Trade Fact by Lisa Ly, Social Policy Intern for the Progressive Policy Institute. Lisa is currently a Master of Public Policy candidate at The George Washington University. 

 

 

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: Pirate attacks are at their lowest rate in 30 years – Nov. 10, 2021

Posted on by Alyssa Brown

FACT:

Pirate attacks are at their lowest rate in 30 years.

THE NUMBERS: 

Pirate attacks worldwide

2021: 125?
2020: 195
2019: 162
2012: 297
2010: 445

WHAT THEY MEAN:

A terse description of a high-seas pirate attack off Nigeria three weeks ago, from the International Maritime Bureau’s Piracy Reporting Centre:

Oct. 25, 2021: While underway, a container ship was boarded by an unknown number of pirate and the crew retreated into the citadel.  On being notified of the incident, the IMB Piracy Reporting Centre immediately alerted and liaised with the Regional Authorities and international warships to request for assistance.  A Russian Navy warship and its helicopter responded and proceeded to render assistance resulting in the crew and ship being safe.  The pirates escaped with stolen ship’s properties.  

Background: A decade of naval cooperation, even among distrustful big powers, appears to have made high-seas pirate work more difficult and less rewarding.

In 2010, international waters off Somalia — the Red Sea, the Gulf of Aden, and the ‘Bab-el-Mandeb’ strait, the principal commercial and energy link between Asia and Europe, with 50 ship transits and 3.4 million barrels of oil moving daily — were the center of the pirate industry.  The collapse of Somalia’s central state in 1991 left country prey to sequential waves of violent clan-based militias, radical fundamentalists and crime gangs.  One product of this was a notorious high-seas pirate industry; at its peak from 2005 to 2010, gangs using small speedboats and automatic weapons were attacking three or more ships a week on the high seas — in total, 181 attacks in 2009 — and in 2010 they were holding 30 vessels and 600 sailors for ransoms ranging up to $95 million.

Since then, the 29-country naval patrol known as CTF-151 (“Combined Task Force 151”) with rotating commands led this year by Pakistan and now Brazil, appears to have essentially eliminated the Somali pirate industry.  The last two successful attacks on high-seas vessels in this region were in 2017, and the most recent failed attempt was in 2019; none at all are reported for 2020 and 2021.

On a worldwide scale, pirate attacks have fallen by over half in the past decade, from 445 known attacks in 2010 to 195 in 2020.  The running tally kept by the International Maritime Bureau in Kuala Lumpur suggests that this year’s count may fall below 150, which would be the fewest attacks since 1994.  Piracy is now most frequent in Indonesia and in the Singapore Strait, the sites of 47 of last year’s 161 attacks and 25 of the 97 attacks reported through September 2021.  Only two of these, though, were actual attacks on high-seas shipping; the others were attempted robberies of ships in port or at anchor. Attacks off West Africa are somewhat less frequent — 24 in 2020, or two each month — but appear to feature especially well-armed and violent pirates, responsible for all three 2020 high-seas hijackings of ships, along with 128 of the 135 crew kidnappings, and nine of the 11 incidents of firing on shipping.  In West Africa too though, frequency and severity have diminished this year, with the open-water event off Brass last month the only high-seas attack recorded so far.  Its quick interruption by a Russian naval patrol, even though the pirates got away with some stolen equipment, suggests some success for international naval cooperation here as well.

FURTHER READING

Facts and data

The International Maritime Bureau’s piracy reports for 2020 find:

Totals: 195 pirate attacks of all kinds worldwide, down from a peak of 445 attacks in 2010, and down again by 30% (from 132 to 97) through the first nine months of 2021.

Hijackings: 11 hijackings of high-seas shipping, down from 53 in 2010; only two so far in 2021.

The International Maritime Bureau on recent pirate attacks, with the full-year 2020 and partial-year 2021 reports available at no cost via e-mail:

Navy perspectives 

Command Task Force 151, led last year by Pakistan and this year by Brazil, patrols Somali waters.

The Marinha do Brasil takes over CTF-151.

And the U.S. Navy reports on joint anti-piracy training with the Ghanaian navy this spring, and Ghanaian-American sailors Samuel Ellis and Prince Boateng visiting home.

The Singapore-based Information Sharing Center for the Regional Cooperation Agreement on Combating Piracy (RECAAP) oversees anti-piracy operations in maritime Southeast Asia.

Two views on Somali piracy

Brookings Institution scholars speculate on a link between illegal/unreported/unregulated fisheries and piracy rates, can be read here.

And a personal account from journalist Michael Scott Moore in The Guardian, on his 977 days as a pirate kidnap victim can be read here.

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: U.S. trade deficit up ~60% since 2016 – OCT. 27, 2021

Posted on by The Progressive Policy Institute

FACT:

The U.S. trade deficit is up ~60% since 2016.

THE NUMBERS: 

$1.05 trillion*: U.S. manufacturing trade deficit, 2021
$0.90 trillion: U.S. manufacturing trade deficit, 2020
$0.65 billion: U.S. manufacturing trade deficit, 2016

* Educated guesswork for a volatile post-COVID closure period, based on 8 months of available data for 2021

WHAT THEY MEAN:

Each February, the Office of the U.S. Trade Representative puts out a report entitled “The President’s Trade Agenda,” meant to set out administration goals for the coming year.  The 2017 edition, the first of the Trump administration, cited U.S. trade balance statistics as proof that early administrations got things wrong: “In 2000, the U.S. trade deficit in manufactured goods was $317 billion.  Last year it was $648 billion — an increase of 100%.”  The next one, in 2018, used “bilateral” trade balance to (a) claim failure for the North American Free Trade Agreement (“our goods trade balance with Mexico, until 1994 characterized by reciprocal trade flows, almost immediately soured after NAFTA implementation, with a deficit of over $15 billion in 1995, and over $71 billion by 2017”) and (b) define a goal for a renegotiated “USMCA”: “USTR has set as its primary objective for these renegotiations to improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries.”

Few economists see trade balance as a useful way to judge trade policy, whether in terms of the content of agreements, or the nature of permanent systems like tariff schedules and antidumping laws.  In the standard Econ 101 equations, a country’s trade balance will always match the difference between its savings and its investment; since the mid-1970s, Americans have been investing more than we save; ergo, deficits result. In this view, very high deficits can cause alarm as indicators of unsustainable booms and potential financial shocks, but the appropriate response is long-term measures to raise savings rates.  Trade policy, meanwhile, should be judged against hopes for growth, job quality, control of inflation, raising living standards for low-income families, business competitiveness and innovation, and so on.

But shoving such high-minded quibbling aside, how do the Trump legacy policies — tariffs on metals and Chinese goods, withdrawal from the World Trade Organization’s Dispute Settlement Body, the new USMCA, etc. — look when judged by the standards the 2017 and 2018 reports set?

1. By 2020, the U.S. deficit in manufactured goods had hit $900 billion.  This is a four-year jump of $252 billion, not much below the $331 billion 16-year increase cited in the 2017 report.  Barring some unexpected economic shock this November, the 2021 figure will easily top $1 trillion.

  1. With respect to Mexico specifically, the bilateral goods deficit in 2020 was $114 billion. The 2021 figure looks about the same.  Adding Canada gets a total north of $150 billion.So by these standards, not too good.  Not what the policies’ authors predicted. And some grounds for high-minded quibblers to smirk.

 

FURTHER READING

Data:

Compare this data against the Census Bureau’s U.S. monthly trade data, through August 2021.
… and for the U.S. with Canada and Mexico, specifically.

… and for the big picture, U.S. exports, imports, and balances from 1960-2020 on one convenient page.

What happened?  

Trumpism leaves a larger deficit overall, and more concentrated in manufacturing than the 2016 figures.  The basic figures are, pulling the lens steadily back:

(a) The U.S. “goods” deficit — exports of manufacturing, energy, agriculture, scrap and waste and uncategorized small-scale shipments minus the equivalent imports — was $749 billion in 2016 and $922 billion in 2020.  The manufacturing deficit was equivalent to 86% of the 2016 total, and by 2020 had risen to 98% of the total.  A 2021 annualization suggests a total goods deficit around $1.05 trillion in 2021, with manufacturing more than 100% of the total and other goods in small net surplus.

(b) A broader measure, counting services trade (generally in surplus for the United States) as well as goods, finds a goods/services trade deficit up from $481 billion in 2016 to $677 billion in 2020.  The 2021 figure is likely to be around $900 billion.

(c) Relative to GDP (more meaningful), a deficit of 2.7% of GDP in 2016 rose to 3.1% in 2020, and a likely 4% in 2021.  This would be the highest since the modern-era peaks of 5.7% in 2005 and 2006.

Why the jump?  Tax policy is the obvious suspect.  Three of the four upward ratchets in U.S. trade deficits since the 1970s followed tax-cut bills — one in the first Reagan term, another in the second Bush administration, and the third in 2017.  Bills of this sort bring higher government deficits.  Unless a rise in family or business savings offsets this public dis-savings, overall U.S. savings will fall, and all else equal, by virtue of the “savings – investment = trade balance” identity, trade deficits rise.  So the higher 2020 and 2021 deficits likely emerge from the 2017 tax bill.

The Trump-era tariffs likely had relatively little trade-balance impact, but do seem to have had two outcomes.  One is a shift in import patterns: imports from China, though slightly above 2016 levels in dollar terms, have dropped from 21.6% of goods imports to 18.1% in 2020 and 2021, as clothes, consumer electronics, etc. from Vietnam, India, Taiwan, and so forth replace some Chinese-origin goods.  Second, some shift in composition, with relatively more manufacturing deficits and relatively less energy.  Where the permanent U.S. tariff system is mostly a way to tax clothing and shoes and so falls mainly on retailers and families, Trump-era tariffs on steel, aluminum, and Chinese goods were more concentrated in industrial inputs such as metals, auto parts, electrical converters, etc. As an example, tariff revenue on insulated electric conductors rose from $56 million in 2017 to $322 million in 2020.  As U.S. manufacturers absorb these costs, the likely result is marginal loss of competitiveness both for exporters trying to sell to foreign buyers and for firms competing against imports at home (and of course exporters facing retaliation by foreign countries responding to tariffs), pushing more of the U.S deficit into manufacturing.

The two reports:

Read the 2017 “President’s Trade Agenda” report.

… and also read the 2018 follow-up (with a wildly wrong claim that the 2017 tax bill “has the potential to reduce the U.S. trade deficit by reducing artificial profit shifting”).

And so … “House on fire! Bring more kerosene!” In the Economist last month, Trump-era lead trade negotiator Robert Lighthizer again laments high trade deficit, skates around the 2017-2021 rise, and suggests more of the 2018-2020 approach will bring it down this time. Read the Economist piece here.

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PPI’s Trade Fact of the Week: Liberalism is worth defending – Oct. 20, 2021

Posted on by The Progressive Policy Institute

FACT:

Liberalism is Worth Defending

THE NUMBERS: 

COVID vaccinations per week, worldwide: 150 million
Workers escaping deep poverty, 2000-2019: 440 million
International students in the U.S., 2020: 1.07 million

WHAT THEY MEAN:

PPI re-launches this Trade Fact series under the political equivalent of storm warnings and lowering clouds, in the U.S and worldwide.  Looking abroad, publics abroad appear more tempted than at any time in decades to believe that their country’s gain must entail another’s loss.  Looking inward, they seem increasingly at risk from authoritarian populists and illiberal political parties.  And on a different level of analysis, trust among big-power governments has eroded; and the institutions and agreements built up since the Second World War to safeguard security and promote shared growth – whether NATO, the World Trade Organization, the European Union – accordingly seem ever more fragile.

Against this ominous backdrop, in concert with like-minded policymakers and intellectuals in the U.S. and elsewhere, PPI aspires to help – by (a) offering new ideas and projects for a liberalism besieged and in need of revitalization; (b) rebutting unfounded cynicism and pessimism, which often are more the cause than the reflection of deteriorating ideals and institutions; and (c) highlighting the successes of active government joined with open exchange of goods, services, and ideas.  In this spirit, the first in this new Trade Fact series notes three successes of liberalism-writ-large:

Half the World’s People Have Received COVID-19 Vaccinations This Year:  22 months after the discovery of a previously unknown coronavirus in Wuhan, government, non-profit, and private-sector investment in medicine development, production technologies, and distribution has provided vaccination shots to 47.8% of the world’s public – that is, 3.7 billion people – with 150 million more shots going into arms each week.

Low-Income Work Has Contracted by Two Thirds Since 2000:  The International Labor Organization finds that in 2020, about 8% of the world’s 3.5 billion workers earned ‘extreme poverty’ wages.  That is, for 280 million workers, a day’s labor brought $1.90 or less in constant 2011 dollars.  In 2000, the ILO’s figure was 26% of 2.76 billion workers, or 720 million.  The difference – 440 million people – implies that, on average, every day since the turn of the millennium, 68,000 workers (and along with them, tens of thousands of their children and relatives), have escaped deep poverty.

1.07 Million International Students Are Enrolled in American Universities: Despite Trump-era efforts to close borders, America remains the world’s top choice for study abroad, home to 1.07 million of the world’s 5.8 million international students.  Their tuition and expenses count as an “export of services” in trade accounts; in 2020, this came to $39 billion.  (For context, this is 2% of the $2.13 trillion in total U.S. exports; alternatively, by comparison, U.S. farm exports totaled $150 billion in 2020 and auto exports $59 billion.)  Over the long term, the effects are likely larger.  Surveys from the mid-2010s suggest that about half of foreign grad students take U.S. jobs after their degree, contributing to consumer demand, business creation, and perhaps especially – given that half of them are in engineering, math, and science – to American science and technology.   Despite neo-Maoism and U.S.-China tension, 372,000 Chinese students make up the largest single cohort of the 1.07 million.  After classes and commencements, some will stay on to work, while others return to join China’s next-generation elites in business, civil service, arts and media, and so to help shape these institutions’ role in Chinese domestic policy, daily life, and international affairs.

To ignore storm warnings and lowering clouds is reckless.  The proper response to them is to identify those parts of a roof or a wall that may leak or give way in heavy weather, shore up their weaknesses or replace them with something better.  It is equally important, however, to identify areas of strength, build upon them, and draw on the lessons they offer.  Metaphorical examples appear, in the response of government, non-profit, and private-sector science to a unique medical emergency; in the road out of poverty a still largely open global economy offers the world’s poor; and in the short- and long-term good that can come from education and exchange of ideas.  In such things one can see breaks in the clouds, patches of sunlight ahead, and foundation for PPI’s belief that the liberal project remains vital, successful, and worth defending.

 

FURTHER READING

COVID resources –

Oxford University’s “Our World in Data” project summarizes the state of COVID vaccination, worldwide and by country.  Top performers are Portugal, with 86% of the public fully vaccinated, the United Arab Emirates at 84%, Iceland at 81%, and Spain at 79%.  The U.S. is at 56%, tied with Ecuador and just ahead of El Salvador’s 55%.  The chief challenge in the United States is the galling one of foolish ‘vaccine hesitancy’ and perverse policymaking (e.g. attempts by some state governments to stigmatize or even ban ‘vaccine mandates’, including those of private businesses). The chief challenge worldwide, by contrast, remains lack of access:  in very poor countries, on average, only 2.8% of people are vaccinated.  Our World in Data on COVID-19 vaccinations by country: https://ourworldindata.org/covid-vaccinations

The State Department outlines U.S. donations of vaccines to developing countries:  https://www.state.gov/covid-19-recovery/vaccine-deliveries/

Peterson Institute scholar Chad Bown and CFR analyst Thomas Bollyky examine the multinational supply chains – U.S., France, Switzerland, U.K., Spain, India, South Africa, Korea, etc. – that created the vaccines, production centers, and delivery systems:  https://www.piie.com/publications/working-papers/how-covid-19-vaccine-supply-chains-emerged-midst-pandemic

The working poor –

The International Labour Organization’s Employment and Social Outlook 2021 examines the world labor market and the impact of Covid, with working-poor figures through 2020.  From 2019 to 2020, the estimate of men and women in extreme low-income work rose from 6.6% to 7.8% of all workers, implying that the Covid pandemic pushed about 35 million workers back into deep poverty last year:  https://www.ilo.org/global/research/global-reports/weso/trends2021/WCMS_795453/lang–en/index.htm

Also from the ILO, a closer look from 2019 at the state of extreme-low-income work, comparing slightly dated with figures up to 2000-2018: https://ilo.org/wcmsp5/groups/public/—dgreports/—stat/documents/publication/wcms_696387.pdf

 Students –

For international students, education is a long-term investment; in trade statistics, it is a form of “exports of services” and a source of revenue.  The annual “Open Doors” statistical review looks at international students in the U.S. (and American students abroad) by state and university of study, country of origin, and more: https://opendoorsdata.org/annual-release/

 Principles –

PPI’s Trade and Global Markets Project supports American leadership to build a fairer, more stable, more prosperous world economy.  To this end, through publications, events, and commentary, and in concert with likeminded intellectuals and policymakers at home and worldwide, we will advocate open markets, support for scientific and technological innovation, and individual choice; environmental sustainability; and special concern for the poor at home and abroad.  Complementing this future agenda, we will oppose and critique isolationist populism and nativism; call for reform of regressive, antiquated, and ill-conceived elements of the U.S. trade regime; and offer positive approaches to the social stresses of globalization.

 

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 Announces Hire of Edward Gresser to Lead PPI’s Trade and Global Markets Policy

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute (PPI) announced that Edward “Ed” Gresser will join PPI as the Vice President of Trade and Global Markets policy. 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.

“PPI is thrilled to welcome our erstwhile colleague Ed Gresser back after his years of distinguished service with the United States Trade Representative,” said Will Marshall, President of PPI. “Ed is one of America’s most trenchant analysts and writers on trade and global markets. Ed’s expertise and understanding of the vital role trade plays in ensuring a dynamic and competitive U.S. economy can help President Biden and pragmatic progressives in the administration undo the damage done by his predecessor’s detour into protectionism.”

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: The Global Economy and American Liberalism (2007), and has been published in a variety of publications including the Wall Street Journal, Foreign Affairs, and U.S. News and World Report. 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.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Media Contact: Aaron White – awhite@ppionline.org