Topic: Trade and Immigration

Tariffs on Clean Energy

Here is Paul Krugman the other day, touting President Obama’s efforts to promote clean energy:

Some things I’ve been reading lately remind me that there’s another major Obama initiative that is the subject of similar delusions: the promotion of green energy. Everyone on the right knows that the stimulus-linked efforts to promote solar and wind were a bust — Solyndra! Solyndra! Benghazi! — and in general they still seem to regard renewables as hippie-dippy stuff that will never go anywhere.

So it comes as something of a shock when you look at the actual data, and discover that solar and wind energy consumption has tripled under Obama.

True, it started from a low base, but green energy is no longer a marginal factor — and with solar panels experiencing Moore’s Law-type cost declines, we’re looking at a real transformation looking forward.

You can argue about how much this transformation owes to federal policy. …

I don’t know all the reasons why solar and wind energy consumption has tripled in recent years, but yes, you can argue about the role of federal policy here. The federal policy that I follow most closely is trade policy, and what trade policy has been doing is imposing really high import taxes on solar and wind products, thus raising their costs.  Here’s what my colleague Bill Watson and I wrote about this a while ago:

Over the last couple of years, trade remedy actions on clean energy products have intensified. In the wind industry, the Wind Tower Trade Coalition, an association of U.S. producers of wind towers, brought an AD/CVD complaint against imported wind towers in 2011. The U.S. Commerce Department started an investigation, and announced a preliminary decision in December 2012.

This decision found both subsidization and dumping in relation to Chinese imports and imposed an antidumping tariff of between 44.99% and 70.63%, as well as countervailing duties of 21.86%–34.81%. The Commerce Department also established a separate antidumping duty of 51.40%–58.49% on Vietnamese wind tower manufacturers.

In the solar industry, in October 2011, the Coalition for American Solar Manufacturing, a group of seven U.S. solar panel manufacturers led by Solar World Industries America, accused Chinese solar panel companies of dumping products in the United States. The Commerce Department opened an investigation in 2011 and announced the final ruling in 2012. The decision was to impose antidumping tariffs ranging from 24% to 36% on Chinese producers.

If we wanted to promote clean energy, the first thing we could and should do is stop imposing tariffs on these imports! 

ITC Vote Clears Way for New Tire Taxes…and More Frivolous Cases

In a 3-to-3 vote today, the U.S. International Trade Commission determined that the domestic industry producing passenger car and light truck tires was materially injured by reason of dumped and subsidized imports from China. Wait, what?  Yes, that’s right.  Despite the Washington protectionism lobby’s self-portrayal as victims of unfair foreign trade practices who are forced to surmount the highest of hurdles before they can “obtain relief” at everyone else’s expense, tie votes go to the protectionists.  A negative determination would have required four votes. Here’s what I wrote about the case on Friday.

Immigration and Crime – What the Research Says

The alleged murder of Kate Steinle in San Francisco by illegal immigrant Juan Francisco Lopez-Sanchez has reignited the debate over the link between immigration and crime. Such debates often call for change in policy regarding the deportation or apprehension of illegal immigrants. However, if policies should change, it should not be in reaction to a single tragic murder.  It should be in response to careful research on whether immigrants actually boost the U.S. crime rates. 

With few exceptions, immigrants are less crime prone than natives or have no effect on crime rates.  As described below, the research is fairly one-sided.       

There are two broad types of studies that investigate immigrant criminality.  The first type uses Census and American Community Survey (ACS) data from the institutionalized population and broadly concludes that immigrants are less crime prone than the native-born population.  It is important to note that immigrants convicted of crimes serve their sentences before being deported with few exceptions.  However, there are some potential problems with Census-based studies that could lead to inaccurate results.  That’s where the second type of study comes in.  The second type is a macro level analysis to judge the impact of immigration on crime rates, generally finding that increased immigration does not increase crime and sometimes even causes crime rates to fall. 

Chinese Tires Case Latest Abuse of the Trade Remedy Laws

Washington’s protectionism lobby – that conspiracy of interests, which includes certain members of the House and Senate, steel and other import-competing producers, organized labor, and creative trade lawyers existentially determined to broaden the definition of unfair trade both statutorily and in the public’s mind – succeeded in extracting rents from President Obama and congressional Republican leadership in the deal that produced Trade Promotion Authority last month.

In addition to reauthorizing Trade Adjustment Assistance, which after 53 years of failure as economic policy has succeeded only at reinforcing the myth that job loss due to trade is especially problematic, Congress passed and the president enacted the American Trade Enforcement Effectiveness Act, which reduces the burden of proof on domestic industries seeking protection from import competition under the U.S. Antidumping and Countervailing Duty laws.

E-Verify Simply Does Not Work

Nearly twenty years ago, John J. Miller of the Center for Equal Opportunity and Stephen Moore, then the director of fiscal policy studies at the Cato Institute, published a study responding to the rising demand for immigration law enforcement.

A National ID System: Big Brother’s Solution to Illegal Immigration” was the name of their Cato Institute policy analysis. They highlighted costs to the liberty of native-born Americans from systems that seek to root out illegal immigrants with identity cards and tracking. I reprised their study in a way and expanded on it seven years ago in “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration.”

When I saw Alex Nowrasteh’s research into the results of mandates to use the Department of Homeland Security’s E-Verify program, I was delighted to see what experience makes available to backers of “internal enforcement” who don’t have our nation’s freedoms in mind. E-Verify simply does not work. That’s the upshot of our new study, “Checking E-Verify: The Costs and Consequences of a National Worker Screening Mandate.”

Do Tariffs Promote Human Rights?

A number of Republican Senators have written a letter to President Obama raising the issue of human rights abuses in Vietnam.  They have a laundry list of good reforms they want to see in Vietnam before that country is included in the Trans-Pacific Partnership trade agreement currently under negotiation.

The letter includes this broad claim about the purpose of the TPP:

The Trans-Pacific Partnership should not serve as simply another trade agreement. As the collective name suggests, TPP should send a message to the international community that its member nations consider one another as trusted partners. As such, all nations in the TPP agreement should have a common commitment to religious freedoms and human values.

The Republican senators’ concerns match up well with those expressed by John Sifton of Human Rights Watch, who worries that the TPP will not do enough to improve human rights in Vietnam or other TPP countries.

The Obama administration needs to be more realistic in describing what can be accomplished by the TPP. It’s already bad enough to forego human rights protections for the sake of free trade. It’s even worse to attempt to sell the agreement by invoking supposed rights protections when they don’t exist.

The Obama administration needs to press harder on TPP members to improve their rights records—for real. The United States shouldn’t move ahead with the TPP until it can demonstrate more serious commitments to creating truly enforceable provisions on labor rights protections and better addressing human rights concerns generally.

If the purpose of the TPP were indeed to send a message about the members’ human rights records, then the senators would have a point.  If the purpose of the TPP were to impose new human rights obligations on TPP members, then Human Rights Watch would have a point.  But the purpose of the TPP is to reduce tariffs and other barriers that restrict trade.  At least, it should be, because that’s what it will actually do.

In a way, the Obama administration has invited the criticism it’s getting over human rights in the TPP.  The President has sold the TPP to Congress and the public as a way to spread “American values.”  It’s only natural then that people would debate what those values are and whether the TPP is spreading them effectively. 

And the critics are right.  Trade agreements are not a very direct way to reform oppressive regimes or enforce human rights norms.  They are, however, the most politically viable mechanism for reducing protectionism. 

Protectionism makes people’s lives worse by diverting economic gains toward politically favored interests at the expense of growth and quality of life, especially for the poor who are stuck paying higher prices for basic necessities like food and clothing.

So rather than linking the TPP with human rights, let’s ask about the impact of tariffs on human rights.  Does it help people in Vietnam that their own government imposes trade barriers to keep prices high and insulate state-owned businesses from competitive markets?  Does it help them when the United States imposes tariffs on the products they make? 

I challenge anyone who opposes the TPP due to Vietnam’s human rights record to explain the value of tariffs in fighting human rights abuses.

Oh, the Hyperbole!

I’m generally a fan of the efforts by WikiLeaks to publish secret government documents.  There may be times where particular documents are too sensitive to put out there, but for the most part I think the government is being unnecessarily secretive.

However, in terms of commentary on the documents it publishes, WikiLeaks doesn’t always know what it is talking about.  Here is what it said recently about a draft text of an international negotation on freeing up trade in services (the Trade in Services Agreement, or TiSA):

Today, 1500 CEST Wednesday, 1 July 2015, WikiLeaks releases a modern journalistic holy grail: the secret Core Text for the largest ‘trade deal’ in history, the TiSA (Trade In Services Agreement), whose 52 nations together comprise two-thirds of global GDP. The negotiating parties are the United States, the 28 members of the European Union and 23 other countries, including Turkey, Mexico, Canada, Australia, Pakistan, Taiwan and Israel.

While the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Pact (TTIP) have become well known in recent months, the TiSA is the largest component of the United States’ strategic neoliberal ‘trade’ treaty triumvirate. Together, the three treaties form not only a new legal order shaped for transnational corporations, but a new economic “grand enclosure”, which excludes China and all other BRICS countries.

Wow, “a new legal order shaped for transnational corporations”! That sounds scary! We better avoid that!

It also sounds like a massive exaggeration of what’s in the legal text. WikiLeaks seems to be taking the view of one trade critic as fact. There are certainly arguments that, in their efforts to promote free international trade in services, the governments working on this treaty haven’t gotten the balance between economic efficiency and national autonomy exactly right. But I think the right approach for WikiLeaks, instead of assuming a massive corporate conspiracy, is to publish the documents it finds and then offer to host a discussion among various experts about what the text actually says and what its impact will be.