issue: Trade

PPI Tackles Tax Disputes in Europe

Posted on by The Progressive Policy Institute

Last week, PPI led a bipartisan delegation of 10 high-ranking Congressional staffers to London and Brussels, which is still grieving in the aftermath of the March 22 terrorist attacks. Our visit there so soon after the atrocity was greeted warmly as an act of transatlantic solidarity.

The Digital Economy Study Group was the third such delegation PPI has taken to Europe in as many years. Our mission is to engage influential government and private leaders in exploring common ways to tackle our mutual dilemma of slow growth and stalled social mobility. We believe more innovation and growth are the best antidotes to the virulent strains of populism that are warping democratic politics on both sides of the Atlantic.

Our trip began last Tuesday in London at 10 Downing Street, where Daniel Korski, deputy head of policy for Prime Minister David Cameron, briefed our delegation on the government’s efforts—including a low-tax patent or innovation box—to encourage greater digital investment in the UK. Then it was on to Westminster, where Tory MP Ian Liddell-Grainger led the group on an entertaining tour of Parliament, which also included a brisk dissection of Britain’s controversial Pay As You Earn (PAYE) tax.

Also at Parliament, Labour MP Meg Hillier, Chair of the Public Accounts Committee, defended the government’s diverted profits tax as a response to public anger over the tax avoidance strategies of international companies. At breakfast the next day, veteran Labour MP John Spellar offered a trenchant analysis of how economic change and slow growth have scrambled British politics and led directly to June’s “Brexit” referendum. At UK Treasury, Financial Secretary David Gauke explained how recent reforms to corporate tax rules have resulted in greater foreign investment and business creation.

On Thursday, we took the Eurostar to Brussels, where the U.S. Mission to the European Union briefed us on difficult aspects of the US-EU economic relationship, including the new “Privacy Shield” agreement, international tax policy, and the TTIP trade pact. At the European Commission’s powerful Competition directorate, the group had a robust exchange of views with officials overseeing “state aid” investigations that have called into question tax agreements negotiated by EU member states and U.S. companies. We expect these issues resurfaced this week when Commissioner Margarethe Vestager visited Washington for talks with Congress and the administration.

Later, officials at DG CONNECT briefed the group on Europe’s efforts to establish a digital single market and plans for “platform regulation” to create space for European tech companies to grow. On Friday, the DG GROW team discussed their wide-ranging efforts to spur entrepreneurship and digital skills building across Europe. The growing gulf between U.S. and European views on tax policy also was the subject of a lunch with Bart Van Humbeeck, economic advisor to Kris Peeters, Vice-Prime Minister of Belgium, hosted by Paul Hofheinz of the Lisbon Council. Our last official meeting was with PPI friend Ann Mettler, Head of the European Strategy Centre, an in-house think tank for EU President Jean-Claude Junker.

These frank and in-depth discussions enabled us and Congressional staff to get a better understanding of the sometimes byzantine workings of the EU, as well as its often different perspectives on issues vital to both sides—privacy and cross-border data flows, digital innovation, trade, tax, copyright and more. The visits also have impressed on our European friends that U.S. policymakers are paying closer attention to such issues. PPI’s hope is to nudge these sometimes contentious conversations to common ground, and strengthen the fraying bonds of transatlantic economic cooperation.

Press Release: PPI Unveils New Blueprint for Shared Prosperity

Posted on by The Progressive Policy Institute

FOR IMMEDIATE RELEASE
March 15, 2016

Contact: Cody Tucker, 202-775-0106
or ctucker@ppionline.org

A Progressive Alternative to Populism

PPI Unveils New Blueprint for Shared Prosperity

WASHINGTON—The Progressive Policy Institute (PPI) today released Unleashing Innovation and Growth: A Progressive Alternative to Populism, a new blueprint for renewing America’s economic dynamism.

The plan offers an array of creative proposals for accelerating the “digitization” of the physical economy; lowering regulatory obstacles to innovation and entrepreneurship; launching a new public works push; adopting pro-growth tax reform; grooming the world’s most talented workers; and enabling working families to escape poverty and build middle class wealth.

The blueprint also takes aim at the populist anger that has figured prominently in campaign 2016:

…[P]opulists do Americans no favors by claiming the economic game is hopelessly rigged against them, that the leaders they elect are incompetents, or that our democracy is rancid with corruption. None of these claims is true, and such demagoguery undermines public confidence in America’s boundless capacity for self-renewal. Populist anger fosters an ‘us versus them’ mentality that, by reinforcing political tribalism and social mistrust, can only make it harder to build consensus around economic initiatives that benefit all Americans.

“We believe progressives owe U.S. voters a hope-inspiring alternative to populist outrage and the false remedies of nativism, protectionism and democratic socialism,” writes Will Marshall, PPI President.

“I encourage anyone looking for optimistic ideas to create more jobs, wealth, and prosperity for hard working Americans to read PPI’s new report using innovation to spur growth,” said Congressman Ron Kind (D-Wis.), Chairman of the New Democrat Coalition. “This report is full of forward thinking policy initiatives that help grow the American economy.”

“In the midst of today’s populist uprising, it’s up to our leaders to recognize the real reasons why our economy isn’t working for everyone and to fight for effective solutions,” said Governor Jack Markell (D-Del.). “PPI’s blueprint gives policymakers a roadmap to create opportunity for all Americans by harnessing the unstoppable forces of globalization and technological innovation, while opposing the impractical, and sometimes dangerous, proposals offered by the political extremes.”

The anger on which populists feed is rooted in a real economic problem: America has been stuck in a slow growth trap since 2000. This long spell of economic stagnation has held down wages and living standards and shrunk the middle class. What the nation needs is a forward-looking plan for moving the U.S. economy into high gear. Instead, as the PPI blueprint notes, today’s populists peddle nostalgia for our country’s past industrial glory but offer few practical ideas for building new American prosperity in today’s global knowledge economy.

Unleashing Innovation and Growth seeks to fill this vacuum in the presidential campaign, offering bold ideas for unleashing the collective ingenuity of the American people—harnessing disruptive change, raising skills, lowering tax and regulatory barriers to individual initiative and creativity, and experimenting with innovative ways to rebuild middle class wealth and enable more Americans to exit poverty.

Summary of Key Proposals

Unleash Innovation
• Spread innovation across the economy: Adopt a new “Innovation Platform” aimed at stimulating public and private investment in new ideas and enterprises, and at diffusing innovation across the entire economy.
• Improve the regulatory climate for innovation: Tackle the mounting costs of regulatory accumulation, the constant layering of new rules atop old ones; Make systemic changes to regulatory agencies to make promoting investment, innovation and new enterprises part of their core mission; Rein in occupational licensing requirements that screen out many low-income entrepreneurs; Lift outdated restrictions on lending to small business; give businesses incentives to offer more flexible work, including paid leave.
• Innovate our way to clean growth: Implement a more innovative energy strategy that simultaneously advances two vital interests: powering economic growth and assuring a healthy environment; Recognize that, for the foreseeable future, the U.S. and the world will have to tap all fuels—renewable, nuclear, and fossil—to meet growing energy demand and sustain global economic growth; Institute a nationwide carbon tax to curb greenhouse emissions while driving investment to clean and efficient energy.
• Democratize trade: Sell more of America’s highly competitive exports to a growing global middle class; promote the free flow of data across global borders; support innovative trade agreements, like the Trans-Pacific Partnership (TPP), that lift labor, environment and human rights standards in developing countries and enable more Americans to benefit from trade; Seize new opportunities for U.S. small businesses and entrepreneurs to use low-cost digital platforms to tap into global growth.

Align Fiscal Policy with Innovation and Growth
• Embrace pro-growth tax reform: Advocate for a dramatic shift from income to consumption taxes to stimulate investment in productive economic activities rather than those favored by the current tax code; Close loopholes that benefit special interests and dramatically simplify taxes for most Americans; Raise enough money to cut corporate income taxes down to globally competitive levels, and reduce taxes that penalize innovation and hiring.
• Modernize public works: Accurately measure the true economic impact of infrastructure spending; open infrastructure markets to private capital; define a strategic role for Washington through a national infrastructure bank; impose firm deadlines on project approvals and licensing process.

Groom the World’s Most Talented Workers
• Reinvent public school: Champion new models of school governance that enable more school autonomy and innovation, more customized learning, rigorous standards, and genuine accountability and results.
• Create new pathways into middle class jobs: Create a more promising approach to “career pathways” by combining classroom training and work experience through a sequence of jobs, within or across firms in an industry, and a sequence of credentials that signal their growing skill levels.
• Cut college costs for everyone: Rein in costs and decrease debt by encouraging colleges to offer three-year degrees rather than the traditional four-year program and focus policies on competency, rather than credit hours.

Build Middle Class Wealth
• Narrow the wealth gap with universal pensions: Champion “universal pension” accounts that would enable all workers to save for retirement, navigate the maze of tax-favored retirement plans, and take their pensions with them when changing jobs.
• Help families save for homeownership: Tackle the twin problems of declining homeownership and souring housing costs for both owners and renters by creating a new, tax-preferred mechanism for down payment savings—“Home K”—to lower obstacles to homeownership, like tight credit and down payment requirements, for first-time homebuyers and to promote savings.

Fight Poverty with Empowerment
• Empower people with smart phones: Use modern technology to cut through bureaucratic barriers to government safety net programs, consolidate benefit streams, enable people living in poverty more access to the information they need, and apply online for social supports; Encourage federal, state, and local governments to create online H.O.P.E. (Health, Opportunity, and Personal Empowerment) accounts and action plans.
• Expand housing choices for low-income Americans: Convert some federal rent subsidies into incentives for homeownership to relieve the burden on low-income families of high housing costs and reduce the waiting list for subsidized housing, without raising taxes or adding to the federal deficit.

Download Unleashing Innovation and Growth: A Progressive Alternative to Populism.

Unleashing Innovation and Growth: A Progressive Alternative to Populism

Posted on by The Progressive Policy Institute

As Americans choose a new president in 2016, populist anger dominates the campaign. To hear Donald Trump or Senator Bernie Sanders tell it, America is either a global doormat or a sham democracy controlled by the “one percent.” These dark narratives are caricatures, but they do stem from a real dilemma: America is stuck in a slow- growth trap that holds down wages and living standards. How to break this long spell of economic stagnation is the central question in this election.

Today’s populists peddle nostalgia for our country’s past industrial glory but offer few practical ideas for building a new American prosperity in today’s global knowledge economy. Progressives owe U.S. voters a hopeful alternative to populist outrage and the false panaceas of nativism, protectionism, and democratic socialism. What America needs is a forward-looking plan to unleash innovation, stimulate productive investment, groom the world’s most talented workers, and put our economy back on a high-growth path. It’s time to banish fear and pessimism and trust instead in the liberal and individualist values and enterprising culture that have always made America great.

Download Unleashing Innovation and Growth: A Progressive Alternative to Populism

Washington Post: The new Democratic Party proposal to rival Bernie Sanders’ socialism

Posted on by The Progressive Policy Institute

Simplicity is one of Bernie Sanders’ great strengths: Corporations and the rich have rigged the economy. His solutions sound simple, even when the plans behind them are complicated: college for all, health care for all, tax the rich, break up big banks. He trails Hillary Clinton in presidential delegates to this point, and he remains an underdog for the Democratic nomination, but Sanders has already pulled Clinton, and the party, toward a more populist, more socialist policy agenda, thanks in part to that clarity of message.

The centrist Democrats who oppose that leftward lurch have struggled to match his simplicity. They tend to view the economy through a lens of skills and adaptation, not power and treachery. Many of them pushed in the 1990s, under President Bill Clinton, to expand global trade and deregulate the financial sector. They now concede those efforts did not go according to script, particularly for middle-class workers, but they are not calling for a full rewrite in response.

Their risk, in this election and moving forward, is to define themselves solely as anti-Democratic-socialist – the folks who don’t like the stuff that a lot of Democrats like about Sanders.

The Progressive Policy Institute is the latest centrist Democratic institution to try to counter that image. Today it will release what its president, Will Marshall, calls a “radical” agenda to get America working for the working class again. The report is called “Unleashing Innovation and Growth: a Progressive Alternative to Populism,” and it is organized around a straightforward, if not perfectly simple, principle.

Read more at The Washington Post

Politico: Presidential Politics Loom over TPP Signing

Posted on by The Progressive Policy Institute

Ed Gerwin, PPI’s senior fellow for trade and global opportunity is quoted in Politico talking about how U.S. elections are effecting TPP negotiations:

As the agreement was inked Wednesday, contrarians argue the tough campaign talk on TPP may actually encourage congressional Republicans to embrace it, fearing a historic missed opportunity to anchor the United States strategically and economically in China’s backyard if they fail to act, Pro Trade’s Doug Palmer reports.

“I think the negative views of many presidential candidates create tremendous pressure to get it done this year,” said Ed Gerwin, a senior fellow at the Progressive Policy Institute, a moderate Democratic think tank.

Otherwise, the agreement could remain on the back burner as a new president assembles his or her administration and decides whether to reopen negotiations, Gerwin said. There’s also the risk the deal could never become law at all.

To read more, go to Politico.

The Hill: In TPP review, focus on small business and digital trade

Posted on by The Progressive Policy Institute

With the release of the full text of the Trans-Pacific Partnership (TPP) trade agreement last November, the American people and their representatives now have an extensive opportunity to analyze the specific provisions of the proposed deal. In addition, as required by recent trade legislation, the U.S. International Trade Commission (USITC) is conducting a detailed, independent review of the likely economic impact of the TPP on specific industry sectors and the overall U.S. economy.

In recent comments filed in the USITC investigation, the Progressive Policy Institute (PPI) urged the Commission to pay particular attention to the beneficial economic effects of the TPP’s groundbreaking provisions on small business trade, international e-commerce, and the digital economy.

PPI has highlighted in recent reports the transformative role that digital tools—including Internet platforms like eBay—are playing in “democratizing” trade. Increasingly, smaller, digitally enabled American exporters can often sell products and services to customers around the world as easily as their large, established competitors.

But, for the digital economy to continue to transform trade, countries must resist a growing trend toward “digital protectionism.” As PPI’s submission explains, the TPP would support the continued growth of digital trade through groundbreaking rules that would require countries to allow commercial data flows; restrict “data localization” requirements that mandate where data or facilities must be located; and require privacy, consumer protection, and other rules to promote more secure and robust international e-commerce.

PPI’s comments also underscore the importance of the TPP’s many pioneering provisions to help small and medium-sized enterprises (SMEs) to export. These include the creation of a special committee to assure that the agreement works for SME traders; a requirement that countries create user-friendly digital information portals to assist SME traders; and eliminating or significantly reducing high duties, regulatory barriers, and customs delays that the studies by the Commission and others show can place disproportionate burdens on smaller traders.

PPI’s submission emphasizes that these and other TPP provisions have significant potential to support substantial expansion of American SME exports and economic growth that is shared more widely by more Americans. Studies by the Commission and others have found that smaller firms that export are more productive, hire more employees, and pay higher wages than non-exporting SMEs. And PPI’s own analysis shows that woman- and minority-owned firms that export employ three to five times more workers—and pay salaries some 60 percent higher—than their non-exporting counterparts.

In short, TPP points toward the next frontier in international trade—new opportunities to promote digital trade and engage more small firms and entrepreneurs in global commerce. The International Trade Commission should assess the potential of such new forms of trade to reinvigorate U.S. economic growth and competitiveness.

This is cross-posted from The Hill‘s Congress Blog.

The Hill: Gerwin On the TPP and Small-Business

Posted on by The Progressive Policy Institute

PPI Senior Fellow for Trade and Global Opportunity Ed Gerwin was quoted by The Hill‘s Vicki Needham commenting on the positive effect Obama’s proposed Trans-Pacific Partnership would have on American small-businesses:

“Ed Gerwin, a senior fellow for trade and global opportunity at the Progressive Policy Institute (PPI), said that the business groups must help to convince lawmakers that the deal will benefit their home states and districts.

Gerwin, who argues that small business will gain a significant benefit from the TPP, said that ‘this trade agreement is really more about what’s going to happen in Washington state than what’s going to happen in Washington, D.C.'”

Read the article in its entirety at The Hill.

WSJ: Small Businesses With a Big Stake in the Pacific Trade Deal

Posted on by The Progressive Policy Institute

During the seven years that the Trans-Pacific Partnership was being negotiated, critics repeatedly claimed that the trade agreement wouldn’t be about trade or cutting tariffs but, instead, would primarily advance the special interests of large multinationals. Economist Joseph Stiglitz, for example, warned that the TPP could “benefit the wealthiest sliver of the American and global elite at the expense of everyone else.”

The negotiations are now over, and the full text of the agreement, released on Nov. 5, tells a different story. Notably, the agreement includes groundbreaking provisions that better enable smaller businesses to prosper by exporting to the 12 countries that are in the partnership. The growing markets in these countries account for some 40% of the global economy.

Ninety-eight percent of America’s 300,000 exporters are small or medium-size enterprises (SMEs)—firms with fewer than 500 employees. Together they account for about a third of the $1.6 trillion in annual goods exports. And because only 5% of SMEs currently export, there’s a significant potential for growth.

Small businesses account for almost two-thirds of America’s net new jobs and—according to economists—are essential building blocks for economic mobility. Smaller firms that export are especially prolific creators of good jobs for diverse groups. Census Bureau data show that the average American women-owned exporter, for example, employs five times more workers and pays an average salary almost $17,000 more than women-owned non-exporters. Similarly, minority-owned exporters employ three times more workers and pay nearly $16,000 more.

Continue reading at the Wall Street Journal.

The Trans-Pacific Partnership and Small Business: Boosting Exports and Inclusive Growth

Posted on by The Progressive Policy Institute

With the release of the full text of the Trans-Pacific Partnership (TPP), America now has an important—and extensive—opportunity to review the agreement’s actual terms. Critics are certain to reprise old arguments, including those that blame trade for economic disruptions whose origins often lie elsewhere. And they’ll offer newer criticisms, including the claim that TPP isn’t really about trade or cutting tariffs but, rather, is a scheme to advance the agenda of large multinational corporations.

This latest charge will likely be news to the hundreds of thousands of small and mid-sized American firms that currently export—and the growing numbers of small entrepreneurs who are seeking greater opportunity through trade. America’s smaller exporters will note that the TPP has made small business trade a key point of emphasis, and that it includes groundbreaking provisions to boost their ability to export to key TPP markets.

Increasing exports by U.S. small business can also be a vital opportunity to promote stronger—and more inclusive—economic growth. Small and medium-sized enterprises (SMEs) that export have higher sales, hire more employees, and pay higher wages than non-exporting SMEs. And because exporters account for only about one percent of all U.S. SMEs, America has significant untapped potential to support growth, good jobs, and economic mobility through increased small business trade.

But to meet this potential, it’s vital for the United States to reduce the extensive and often onerous foreign trade barriers that often keep SME traders on the sidelines. High duties and costs, customs red tape, unnecessarily complex regulations, and other barriers negatively impact American exporters of all sizes, but they can loom particularly large for small entrepreneurs that lack the resources, personnel, contacts, and extensive support networks of bigger competitors.

In this policy brief, we first review the TPP agreement and explain how it would eliminate significant trade barriers to U.S. small business and enable more American SMEs to prosper by exporting to fast-growing Asia-Pacific markets. We then highlight how the TPP’s support for small business trade can play a vital, broader role, helping to boost the overall economy and “democratizing” trade by assuring that trade’s significant benefits are shared more widely by more Americans.

Download “2015.11-Gerwin_The-Trans-Pacific-Partnership-and-Small-Business_Boosting-Exports-and-Inclusive-Growth”

 

Agenda 2016: Reviving U.S. Economic Growth

Posted on by The Progressive Policy Institute

The Progressive Policy Institute (PPI) teamed up with Columbia University’s Richard Paul Richman Center for Business, Law, and Public Policy to co-host a compelling symposium Nov. 6-7 in New York on revitalizing the U.S. economy. The event featured a distinguished roster of Richman Center economists and scholars, as well as PPI analysts and special guests, and more than two-dozen top policy aides to Members of Congress, Governors, and Mayors.

Held on Columbia’s Manhattan campus, the symposium examined the U.S. economy’s recent performance, as well as the causes of the long-term decline of productivity and economic growth. Against the backdrop of the 2016 election debate, the participants grappled with specific ideas for unleashing more economic innovation, modernizing infrastructure, reforming taxes, improving regulation, expanding trade and reducing inequality by ensuring that all children have access to high-quality public schools.

The discussions, which were off-the-record to encourage maximum candor, featured the following speakers and topics:

  • An overview of the U.S. economy’s recent performance by Abby Joseph Cohen, President of the Global Markets Institute and Senior Investment Strategist at Goldman Sachs.
  • A roundtable on key elements of a high-growth strategy, led by Michael Mandel, Chief Economic Strategist at PPI, Andrew Stern, former head of the Service Employees International Union and now Ronald O. Perelman Senior Fellow at the Richman Center, and
Philip K. Howard, Founder of Common Good, a nonpartisan reform coalition. The conversation touched on ways to improve the regulatory environment for innovation, including reducing regulatory accumulation and requiring faster permitting for big infrastructure projects, as well as a lively debate on the future of work in a tech-driven knowledge economy.
  • An insightful macroeconomic analysis of why productivity and economic growth have slowed, by Pierre Yared, Associate Professor at the Columbia Business School and Co-director of the Richman Center. Yared highlighted three potential contributors to the slowdown: labor demographics and participation; “capital intensity” or business investment; and the “production efficiency” of U.S. companies.
  • A detailed examination of the impact of energy innovation—from the shale boom to renewables and the construction of a new, “smart” grid—on jobs and economic growth. Leading this segment were Jason Bordoff, formerly energy advisor to President Obama and Director of Columbia’s Center on Global Energy Policy, and Derrick Freeman, Director of PPI’s Energy Innovation Project.
  • A dinner conversation at the Columbia Club with Edmund Phelps, the 2006 Nobel Laureate in Economics and Director of Columbia’s Center on Capitalism and Society at Columbia University. Drawing on his recent book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change, he stressed the importance of indigenous innovation in creating the conditions for broad upward mobility. He also emphasized the crucial role of “modern” or individualistic cultural values in sustaining the mass innovation and entrepreneurship America needs to flourish again.
  • A detailed look at business taxation and reform as a potential driver of economic growth. It featured Michael Graetz, Alumni Professor of Tax Law at Columbia Law School, David Schizer, Dean Emeritus and the Harvey R. Miller Professor of Law and Economics at the Columbia Law School and Co-director at the Richman Center, as well as PPI’s Michael Mandel. The discussion ranged widely over global tax frictions, including the OECD’s new “BEPS” project; the need for corporate tax reform; “patent boxes” and mounting U.S. interest in consumption taxes.
  • A roundtable on trade and productivity growth with Ed Gerwin, PPI Senior Fellow for Trade and Global Opportunity and the versatile Michael Mandel. Noting President Obama’s controversial call for a Trans-Pacific Partnership, Gerwin stressed the agreement’s potential for “democratizing” trade by making it easier for U.S. small businesses to connect with customers abroad. Mandel underscored another PPI priority: raising awareness among policymakers of the growing contribution of cross-border data flows to growth here and abroad, and the need to push back against proposals that would impede “digital trade”
  • A luncheon presentation on “financial regulation after the crisis” by Jeffrey Gordon, Richard Paul Richman Professor of Law at Columbia Law School and Co-director of the Richman Center. Gordon described the new regime put in place by Dodd-Frank and other rules to guard against “systemic risk” of another financial meltdown, and suggested its “perimeter” may been to be expanded beyond banks.
  • The symposium’s final panel featured a vigorous discussion on K-12 education reform and the economy. The discussants were Jonah Rockoff, Associate Professor at the Columbia Business School and David Osborne, who directs PPI’s Reinventing America’s Schools Project, and is a co-author of the seminal “Reinventing Government.” Rockoff highlighted research showing that the returns to school improvement are enormous, and recommended reforms that could increase school quality. Osborne traced the evolution of school governance in America, and offered detailed looks at new models emerging in cities like New Orleans and Washington, D.C., both of which are leaders in the public charter school movement.

The symposium gave the policy professionals who participated a rare opportunity to delve deeply into complicated economic realities, guided by presenters of extraordinarily high caliber. The conversations were highly illuminating and will inform PPI’s work on Agenda 2016—a new blueprint for reviving U.S. economic dynamism and opportunity.

Quartz: The TPP could help tiny companies become global exporters

Posted on by The Progressive Policy Institute

Ed Gerwin, PPI Senior Fellow for Trade and Global Opportunity, was quoted by Ana Campoy of Quartz talking about the importance and influence of Obama’s proposed Trans-Pacific Partnership:

Aside from the lower tariffs that are part of any run-of-the-mill trade agreement, TPP has a whole chapter on international e-commerce, and another on small- and medium-sized companies. The specific provisions of the pact have not been released yet, but a public summary of its contents shows that the TPP ‘could be potentially transformative,’ Ed Gerwin, a trade expert at the Progressive Policy Institute, tells Quartz.

For example, the treaty promises to speed up the process of getting merchandise across borders by making import rules more easily accessible and transparent. If the agreement is approved, express packages would be expedited and customs officials would be encouraged to adopt time-saving measures such as electronic forms and signatures.

‘That stuff is a big deal,’ says Gerwin. ‘Having uniform rules is really important.’”

Read the article in its entirety at Quartz.

How the Ex-Im Bank Serves Main Street

Posted on by The Progressive Policy Institute

On real Main Streets across America, from Idaho to California to Maine, the Ex-Im Bank supports U.S. jobs.

On Main Streets across America, small businesses are a critical source of economic growth and good jobs. Over the past two decades, entrepreneurs and small firms have generated an astounding 65 percent of America’s net new jobs. Small businesses that export drive even greater growth.

According to shipping firm UPS, small firms engaged in global trade are 20 percent more productive and produce 20 percent greater job growth when compared to non-exporters. And because only about 4 percent of U.S. small businesses export, boosting small business trade can pay huge dividends for local communities and the overall American economy.

U.S. Export-Import Bank plays a key role in helping American small businesses seize export opportunities in foreign markets. Over the past four years, it has completed over 12,000 financing transactions for small firms—supporting nearly $50 billion in small business exports and well over 100,000 small business jobs—and has hosted over 75 small business export forums in communities nationwide. In 2014, 90 percent of the Ex-Im Bank’s transactions benefitted small businesses.

Despite this, critics like House Financial Services Chairman Jeb Hensarling (R-TX) have suggested that gutting the Ex-Im Bank would somehow be a victory for the “Main Street competitive economy.”

In real “Main Street” communities across America, however, small businesses and workers that have benefitted from Ex-Im Bank financing support would certainly disagree. Indeed, more than a few of the small firms that the Ex-Im Bank has supported in recent years are actually located on “Main Streets” across America. Here are just a few examples:

The Ex-Im Bank provides these and many other local companies with the real-world help they need to grow, support their communities, and create good jobs by selling globally. For instance, Ex-Im Bank loan guarantees enable NOW International, a small producer of dietary supplements in Bloomingdale, Illinois and Sparks, Nevada, to gain financial backing from local lenders for exports that directly support 35 jobs at the company.

And the benefits of Ex-Im support for larger companies like Boeing also flow to the thousands of U.S. suppliers and workers that participate in large company supply chains, including businesses that line the “Main Streets” of communities throughout America.

There are, no doubt, scores of government programs that need to be replaced or reformed. But the Ex-Im Bank isn’t one of them. Rather, the Ex-Im Bank is an efficient and prudent institution that drives exports and economic growth and supports good American jobs, all while actually making a $2 billion profit for the U.S. Treasury over the past five years. If that’s not a model for good governance, what is?

Main Street America is already increasingly frustrated with Washington. Let’s not fuel the fire by eliminating worthwhile programs that directly address Main Street’s real needs.

This piece was originally published in Republic 3.0.

The Daily Beast: Hillary’s Trade Flip-Flop

Posted on by The Progressive Policy Institute

Hillary Clinton’s decision to oppose President Obama’s top trade priority is beyond disappointing. It devalues two of her real assets – foreign policy expertise and political loyalty – while aligning her with the most economically retrograde voices on the “populist” left.

Political reporters naturally played up Clinton’s “break” with Obama, who has just wrapped up the Trans-Pacific Partnership (TPP) after five years of arduous negotiations with 11 other Pacific Rim countries. Her untimely defection to the anti-trade camp will compound the president’s already difficult task of rallying Democratic support in Congress for TPP.

More troubling, though, is Clinton’s break with herself.  As Obama’s first Secretary of State, she was a key architect of the administration’s strategy of “rebalancing” America toward the Asia Pacific.  Integral to that strategy is TPP, which would create an economic counterweight to China – a vast free trade zone encompassing 40 percent of global GDP that includes advanced economies like Japan and Australia, and emerging markets like Malaysia and Vietnam.

At issue is whether the burgeoning Pacific economy will play by China’s mercantilist rules, or merge into the liberal, rules-based trading system championed by the United States and Europe. The stakes for U.S. workers and companies are enormous. In 2011, Clinton called TPP a model for future trade agreements, and indeed other Asian economies, such as South Korea, Taiwan, the Philippines and Thailand, have expressed interest in joining.

So TPP isn’t just another trade deal; it’s an impressive feat of U.S. economic diplomacy and leadership. Its rejection by Congress would deal a heavy blow to America’s influence in the region.

It would also damage America’s growth prospects. The U.S. economy is stuck in low gear, averaging a paltry two percent growth per year since 2000. Over the last decade, productivity growth also has slowed, which economists say goes a long way toward explaining why wage gains for most U.S. workers have been so meager. Our economy needs a lift – and TPP’s market-opening provisions will stimulate foreign demand for U.S. products.

Continue reading at The Daily Beast.

PRESS RELEASE: PPI Statement On Secretary Clinton’s Opposition to TPP

Posted on by The Progressive Policy Institute

WASHINGTON— The Progressive Policy Institute issued the following statement in response to Secretary Clinton’s announced opposition to the Trans-Pacific Partnership trade agreement:

“Progressives—and all Americans—seek an economic future with good jobs and more inclusive economic growth. The Trans-Pacific Partnership can help achieve both of these important goals. The TPP would expand U.S. trade to growing Asia-Pacific markets in innovative and important sectors where America is strong, supporting higher-paying jobs. At the same time, the TPP’s groundbreaking provisions on the digital economy and small business trade could boost export opportunities for American entrepreneurs and smaller exporters which, in turn, can help spread gains from trade more broadly throughout the American economy.

“The TPP would also help assure that this growing trade would happen under enforceable, high-standard commitments to protect labor rights, preserve the environment, ensure an open Internet, reduce corruption, and increase transparency. These and other TPP commitments would help level the international playing field for American exporters and their workers, while providing tangible help to workers and people in all TPP countries.

“In light of these and other anticipated benefits from TPP, PPI is disappointed that Secretary Clinton has expressed her opposition to the agreement—and we hope that she’ll reconsider this initial view once the TPP’s full text is released. Like any negotiated agreement, the TPP is certainly far from perfect. But it has significant potential to support smarter and more inclusive growth and to orient U.S. trade towards new markets, new opportunities and a rapidly changing global economy—and to do so in a way that advances key American values. And, as Secretary Clinton well knows, the TPP could also deliver critical geopolitical benefits for the United States and our key allies in the Pacific region.

“Many who routinely oppose new trade agreements—like those who repeatedly vow to “repeal and replace” the Affordable Care Act—are often long on rhetoric and short on practical and achievable solutions. It would be unfortunate for a thoughtful leader like Secretary Clinton to make common cause with reflexive anti-traders—in both parties—whose zero-sum views on the global economy are rooted in the failed policies of the past. We hope, instead, that Secretary Clinton will work to support agreements to expand trade and other policies—including investments in education, training and infrastructure—that will help orient the American economy towards the future and bring trade’s undeniable benefits to more Americans.”

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The End of Safe Harbor and the Rise of Digital Protectionism

Posted on by The Progressive Policy Institute

Today the European Court of Justice invalidated the “Safe Harbor” agreement that allowed thousands of  US companies to transfer personal data from Europe to the US, including personal data of employees at their European subsidiaries. As the WSJ wrote:

In a victory for privacy advocates, the European Court of Justice ruled that national regulators in the EU can override the 15-year-old “Safe Harbor” pact used by about 4,500 companies, including Apple Inc. and Alphabet Inc.’s Google, because it violates the privacy rights of Europeans by exposing them to allegedly indiscriminate surveillance by the U.S. government.

Leaving aside the legalities, this ruling indicates a rising mood of digital protectionism which is likely to hurt Europe far more than the US. Data traffic flows both ways, after all, and efforts to keep personal data inside the EU is likely to end up keeping useful data  out as well. The future belongs to those countries who participate fully in the global digital economy.

PRESS RELEASE: PPI Statement on Announcement of TPP Deal

Posted on by The Progressive Policy Institute

WASHINGTON— Ed Gerwin, Senior Fellow for Trade and Global Opportunity at the Progressive Policy Institute (PPI), today released the following statement in response to Monday’s announcement that top trade officials from the 12 Trans-Pacific Partnership countries have successfully completed their negotiations:

“PPI welcomes Monday’s announcement that the United States and its 11 negotiating partners have successfully concluded negotiations on the Trans Pacific Partnership (TPP) trade agreement.

“If done right, modern trade agreements like TPP have significant potential to increase American exports to key foreign markets; to forge international consensus on high standards for open rulemaking, environmental protection, and labor rights; and to support digital commerce and other tools for broader and more inclusive trade.

“We appreciate the tireless efforts of Ambassador Froman, the Obama Administration’s trade team, and trade supporters in Congress in seeking a TPP agreement that will achieve these and other key priorities for the United States.

“We look forward to reviewing the text of the completed agreement. And we are particularly grateful to Congressional trade leaders—particularly Senator Ron Wyden (D-Ore.), Congressman Ron Kind (D-Wisc.), and other pro-trade Democrats—for writing strong, new rules that will assure an extensive, informed and transparent debate on the detailed provisions of the TPP.”