Topic: Trade and Immigration

The World Is Entering a Devastating Chocolate Crisis: The Government Must Act to Save Us

Attention in Washington remains focused on the government shutdown.  But a far more important issue confronts America: rising chocolate prices. When will the government address this terrifying global crisis?

Cocoa trees have been cultivated for thousands of years. The early Mesoamericans, including the Aztecs and Mayans, turned the beans into cocoa solids, liquid, and butter. These peoples offered cocoa beans as gifts for the gods and using cocoa drinks in sacred ceremonies.

The Europeans became acquainted with chocolate after the Spanish conquistadors came and conquered. The Europeans sent cocoa beans and added sugar and milk. 

Hard chocolate finally arrived in the 18th century, apparently first in Italy. But it was the Industrial Revolution that delivered chocolate to the rest of us. A German company created the first chocolate bar in 1839. Is there another invention that benefited mankind so greatly?

But perhaps the most important innovation was yet to come. In 1867 a Swiss chocolatier, recently removed from candle-making added milk. And then America’s Milton Hershey created a mass market with cheap chocolate bars. 

For all of the genius of Thomas Jefferson, he failed to capture this aspect of humanity. What is “life, liberty, and the pursuit of happiness” without chocolate?

Truly access to chocolate is a vital national, even global interest.

Free Trade on the Internet

This is from a recent speech by Senator Ron Wyden (D-OR):

Today, the Internet represents the shipping lane of 21st Century goods and services. It is reshaping global commerce just like social media is reshaping societies. But right now the trade rules don’t neatly apply to the digital economy, despite the growing number of protectionist barriers popping up. The most recent WTO rules were written before the Internet.

It’s time for the digital economy to be within the Winners Circle by keeping data flows open and ensuring that foreign markets aren’t more legally hazardous than the U.S.

This is an important point. With regard to international trade in goods, the impact of the Internet has been significant, but only within certain limits. With the exception of goods for which electronic versions have been developed, you still need to make the goods at a factory and ship them around the world.  

With services, by contrast, the Internet revolution has been greater. A number of services that used to be difficult to trade internationally at all are now tradable with the click of a mouse. To use an example I’ve written about recently, online higher education services are taking off. Someday soon it may be just as convenient for a Washingtonian to get a degree from Melbourne University in Australia as it is to do so from Georgetown.

One problem, though, as Senator Wyden points out, is that many of our international trade rules were written in the pre-Internet era. This became apparent during the WTO dispute over online gambling. The rules could barely fit with this new industry.

Public TV to Air Documentary on Economic Freedom

It’s been more than a quarter century since the Fraser Institute set out to define and measure the concept of economic freedom, a project that culminated in the annual publication of the Economic Freedom of the World index (co-published in the United States by Cato). Since then, we’ve learned a tremendous amount about the contribution of economic freedom to human progress, there’s been an explosion of scholarly literature on the subject, and the term is now commonly used by politicians and international institutions alike.

A new documentary—Economic Freedom in Action: Changing Lives— will air this fall on public television stations and look at how the rise in economic freedom has transformed the lives of hundreds of millions of people around the world. See a trailer of the film below. Join us to see a screening of part of the documentary at a Cato forum on October 16 featuring the Fraser Institute’s founder and former executive director, Michael Walker, and Cato senior fellow Johan Norberg.

Protectionists vs. Patent Trolls

The United States International Trade Commission’s patent enforcement activities are under fire from two camps concerned about the agency’s excessive remedies for patent infringement.  In Tuesday’s Wall Street Journal, former commissioner Charlotte Lane lamented that the agency has become the “International Trolling Commission” where rent-seeking patent trolls can harass innovative U.S. companies. 

On the same day, the U.S. Trade Representative refused to veto an ITC import ban on certain Samsung smart phones, even though the administration recently vetoed a similar ban against Apple. The difference between the cases hinged on the ITC’s excessive enforcement of Samsung’s standard-essential patents. The veto may have looked like favoritism, but it was really about correcting the agency’s bad patent policy.

The good news is that momentum is gaining for significant reform of the ITC’s role in the patent system. Some good ideas for reform include ending ITC patent jurisdiction entirely, limiting the agency to enforcement of district court awards, or most likely, better aligning the ITC’s remedies for patent infringement with federal district courts.   

Mexican Violence and Unauthorized Immigration

The murder rate in Mexico is a serious and troubling issue that I’m frequently asked about in relation to immigration. Although far lower than in other Central American countries, the Mexican murder rate is almost three times as high as it was in 2007 – and potentially much higher. But, do unauthorized Mexican immigrants come to the United States to avoid the violence in their home country?

I decided to plot the number of Mexican nationals apprehended by Customs and Border Protection (CBP) on the left axis, an admittedly imperfect measurement of the intensity of unauthorized immigration, and the murder rate in Mexico per 100,000 people on the right axis.

Sources: Sources: Customs and Border Protection U.S. Border Patrol Statistics and Trans-Border Institute.

Copyright: The Gift that Keeps on Giving (for a long time)

Did you know that the song “Happy Birthday” was under copyright? If you read my colleague Walter Olson’s Overlawyered blog, you did. Back in June, he reported on a lawsuit to put an end to the claim of copyright:

Warner/Chappell Music continues to demand and collect royalties for public performance of the ditty, although its melody was first published more than 120 years ago and the familiar celebratory words have been sung to it for more than a century. A new lawsuit seeks a judicial ruling that the song is in the public domain and asks a return of wrongfully collected royalties.

I used this lawsuit as a hook for a piece in the National Interest that expands on an earlier blog post I wrote on the subject. The basic point is this: The Happy Birthday copyright claim may sound absurd, but given the current length of U.S. copyright terms, it’s actually not implausible for such an old song to be under copyright. For individual authors, life of the author plus 70 years is now the standard. That’s a long time!

And through trade negotiations, the United States is pushing these terms on other countries. In my view, this is bad for copyright and also bad for trade policy:

The appropriate focus of copyright policy right now should not be on using international trade agreements to extend copyright terms abroad. Rather, there needs to be a debate that focuses on how long copyright terms should be. Including provisions on copyright terms in trade agreements without first having that debate, and with ever-longer terms, is pushing intellectual property policy in the wrong direction and at the same time undermining the goal of free trade by bringing in unnecessary controversies.

Trade agreements are much broader than they used to be, and they cover a lot of different issues. Much of the mainstream coverage of trade agreements takes a simple “pro” or “con” view. But it’s more complicated than that; it’s worth picking them apart, seeing what all they do, and having a debate on each particular aspect. Copyright terms would be a great place to start.

Focus on Employment, Not Citizenship, to Reform Immigration

Immigration reform, once the top priority in Washington coming out of the 2012 presidential election, has stalled. This is unfortunate because the current system is a shambles. Some 11 million people live in the U.S. illegally. But attempting to fence off the country is no answer. 

Immigration benefits the United States. Many immigrants are natural entrepreneurs. Well-educated foreign workers are inventive and productive. Expanded work forces increase economic specialization and business flexibility. 

Immigration may depress some wages in the short-term; however, the work force is not fixed. Immigration makes a more innovative and productive economy, with new and better jobs. 

Nevertheless, the public is skeptical of immigration. To move forward, Congress should separate employment from citizenship. Legislators should expand work visas for individuals. Immigration auctions or tariffs would be innovative alternatives. Congress also should regularize the status of those currently in America illegally by granting residence and employment permits. However, Congress should set aside debate over turning illegal aliens into citizens. In fact, Rep. Bob Goodlatte (R-Va.), chairman of the House Judiciary Committee, asked: “Are there options that we should consider between the extremes of mass deportation and a pathway to citizenship?”

Some immigration opponents complain that this approach would reward illegal behavior. However, the undocumented broke the law to improve their lives and the lives of their families, not to hurt others. Their presence also benefits the rest of us. Moreover, most Americans won’t support rounding up millions of people who have become part of U.S. society. Additional employment controls and sanctions would undermine domestic liberties. 

Immigration supporters are also critical of this approach. A blogger harkened back to the slave era, writing that the immigrants’ “status would be akin to the freedmen who were denied citizenship under the notorious Supreme Court decision in Dred Scott.”  Cristina Jimenez of the organization United We Dream called the idea “un-American.” 

However, in Dred Scott the court ruled that people who had been kidnapped and brought to America were not citizens. In contrast, today’s undocumented came voluntarily without any expectation of becoming citizens. Moreover, there is nothing “un-American” about not allowing those who entered the country illegally to jump the citizenship queue.