America's Maligned and Misunderstood Trade Deficit


Free Trade and Human Rights: The Moral Case for Engagement


U.S. Sanctions Against Burma: A Failure on All Fronts


Immigration: The Demographic and Economic Facts



Market Opening or Corporate Welfare?: ‘Results Oriented’ Trade Policy Toward Japan



The Fallacy of Economic Security



A National ID System: Big Brother’s Solution to Illegal Immigration



Washington's Iron Curtain against East European Exports

Scholars at the Cato Trade Center recognize that open markets mean wider choices and lower prices for businesses and consumers, as well as more vigorous competition that encourages greater productivity. These benefits are available to any country that adopts free trade policies; they are not contingent upon reciprocal policies in other countries. It is a mistake to regard liberalization as a "concession" whose main purpose is to open up export markets abroad; such thinking is simply a variant of the mercantilist outlook that gives rise to protectionism in the first place. Studies by Trade Center scholars have found benefits in the elimination of U.S. trade barriers regardless of what other countries choose to do.

The case for free trade goes beyond economic efficiency. The freedom to trade is a basic human liberty, and its exercise across political borders unites people in peaceful cooperation and mutual prosperity. Accordingly, scholars at the Cato Trade Center closely examine the politicization of trade, whether due to simple protectionism or in furtherance of other policy goals. In particular, they question whether foreign policy trade sanctions lead to the desired changes in other countries' policies, or more often injure the very people we most want to help.

The Cato Trade Center focuses not only on U.S. protectionism, but also on trade barriers around the world. Cato scholars examine how the negotiation of multilateral, regional, and bilateral trade agreements can reduce trade barriers and provide institutional support for open markets. Not all trade agreements, however, lead to genuine liberalization. In this regard, Trade Center studies scrutinize whether purportedly market-opening accords actually seek to dictate marketplace results, or increase bureaucratic interference in the economy as a condition of market access. In addition, Cato scholars investigate whether threats of unilateral trade sanctions, even when they occasionally succeed in reducing trade barriers, may foster a political culture hostile to open markets and therefore should be avoided.

Studies by Cato Trade Center scholars show that the United States is most effective in encouraging open markets abroad when it leads by example. The relative openness and consequent strength of the U.S. economy already lend powerful support to the worldwide trend toward embracing open markets. Consistent adherence by the United States to free trade principles would give this trend even greater momentum. Thus, Cato scholars have found that unilateral liberalization supports rather than undermines productive trade negotiations.

The Cato Trade Center seeks to advance its mission by participating aggressively in the trade policy debate. We publish briefing papers, policy analyses, and books; we hold policy forums and conferences; we actively engage policymakers and opinion leaders. Scholars at the Cato Trade Center aim at nothing less than changing the terms of the trade policy debate: away from the current mercantilist preoccupation with trade balances, and toward a recognition that open markets are their own reward.

Recent Highlights

 Books:

• Freedom to Trade: Refuting the New Protectionism, edited by Cato’s director of regulatory studies, Edward Hudgins. This Cato Institute monograph dissects and disproves the main arguments of trade protectionists, including those who advocate sanctions as a tool of foreign policy. Contributors include Claude Barfield, coordinator of trade policy studies at the American Enterprise Institute, Joel Kotkin, senior fellow at the Pepperdine Institute for Public Policy, and James Dorn, Cato’s vice president for academic affairs. [1997]

• The Cato Handbook for Congress featured a chapter by Cato senior scholar James Powell. Powell argues that the U.S. Congress should repeal trade barriers including the anti-dumping and counterveiling duty laws. On recent episodes of the CBS news magazine "60 Minutes," the Handbook was observed on the desks of both House Majority Leader Dick Armey (R-Tex.) and Budget Committee Chairman John Kasich (R-Ohio). [1997]

Policy Studies:

America's Maligned and Misunderstood Trade Deficit
Contrary to popular conception, the trade deficit is not caused by unfair trade practices abroad or declining industrial competitiveness at home. Trade deficits reflect the flow of capital across international borders, flows that are determined by national rates of savings and investment. This renders trade policy an ineffective tool for reducing a nation's trade deficit. By Daniel T. Griswold.

Free Trade and Human Rights: The Moral Case for Engagement
In this paper, the Rev. Robert A. Sirico argues that trade barriers usually do nothing to improve human rights. Instead, sanctions isolate victims while strengthening their persecutors. Sanctions imposed in the name of human rights also serve the interest of domestic protectionists by limiting competition. The best policy to promote freedom and human rights remains economic and moral engagement.

U.S. Sanctions Against Burma: A Failure on All Fronts
The U.S. policy of imposing unilateral trade and investment sanctions against Burma has proven to be a failure on all fronts. By forcing U.S. firms to disengage from Burma, that policy has harmed American economic interests and done nothing to improve the living conditions or human rights of the people of Burma. By Leon T. Hadar.

The Fast Track to Freer Trade
This briefing paper by the Center’s Dan Griswold made the principled case for granting fast-track trade authority to the U.S. president. The paper’s opening section argued that free trade benefits Americans as both consumers and producers. The paper explained the historical and constitutional justification for fast-track as well as its importance for upcoming trade negotiations and warned Congress not to entangle free trade with new environmental and labor laws.

Antidumping Laws Trash Supercomputer Competition
This briefing paper exposed the economic weakness and unfairness of the U.S. antidumping law as demonstrated in the recent ruling against the Japanese supercomputer industry. The paper argued that the law is arbitrary and undermines competition and therefore ought to be repealed. [October 1997]

Events:

"Deregulation in the Global Marketplace: Challenges for Japan and the United States in the 21st Century." The Cato Institute and Keidanren co-sponsored this full-day conference, held in Tokyo, Japan. Speakers examined a broad range of policy challenges facing the United States and Japan, including tax policy, trade policy, financial markets liberalization, and pension reform. In each policy area the emphasis was on how policies in the two countries interrelate and how each country can serve as both a good and bad example for the other. [April 1998]

"Collateral Damage: The Economic Cost of U.S. Foreign Policy." This full-day conference examined four points of conflict between economic liberty and U.S. foreign policy. The opening panel considered the economic costs of U.S. foreign policy ambitions, including the cost to Americans and to innocent civilians in developing countries. Other panels critiqued U.S. export control laws, many of which no longer serve any legitimate security need; international financial controls, which restrict the freedom of Americans to mange their own financial affairs; and unilateral economic sanctions, which sacrifice the welfare of American consumers and producers without achieving real gains in foreign policy. [June 1998]

"The True Benefits of Free Trade," a luncheon conference on Capitol Hill cosponsored by the Cato Institute and the Ripon Society. The purpose of this conference was to educate legislative staffers on how open markets promote wealth creation and increased productivity and living standards. Specifically, the benefits of free trade go beyond increased export opportunities, and are not contingent on a "favorable" trade balance.

"GATT after 50 Years: The Future of Free Trade," a half-day conference featuring economist Robert Lawrence of Harvard University. This conference featured debates and discussions on three important issues that will shape the future of the global trading system: regionalism, trade and harmonization of regulations, and the use and abuse of antidumping laws. Speakers included Claude Barfield of the American Enterprise Institute, Arvind Panagariya of the University of Maryland; Cato Trade Center director Brink Lindsey, and Terry Fortune, an attorney who represented the Japanese supercomputer industry in the recent antidumping case against Japanese supercomputers. [October 1997]

"Freedom to Trade: Refuting the New Protectionism," a policy forum to officially release Cato’s book, Freedom to Trade: Refuting the New Protectionism. Opening remarks were delivered by Rep. Philip Crane (R-Ill.), chairman of the House Ways and Means Subcommittee on Trade. Edward Hudgins, Cato’s director of regulatory studies, and Claude Barfield, coordinator of trade policy studies at the American Enterprise Institute, discussed the benefits of making unilateral moves toward free trade. Kevin Kearns of the US Business and Industrial Council argued that free trade diverts American jobs to other countries. [July 1997]

"China As a Global Economic Power: Market Reforms in the New Millennium." This international conference was held in Shanghai, China, two weeks before the return of Hong Kong to Chinese control. Scholars from around the world gathered to discuss the prospects for property rights and the rule of law in China, and their relevance to China’s economic future. [June 1997]

"Trade and Human Rights," a policy forum on Capitol Hill featured a debate on the question: Do trade restrictions improve human rights conditions in oppressive nations? Participants included Marino Marcich of the National Association of Manufactures and Mike Jendrzejczwk of Human Rights Watch. [March 1997]

Regulation Magazine

"Freedom to Trade," a regular column by Cato Trade Director Brink Lindsey. Topics have included a review of the WTO’s first two years, an analysis of fears of a global glut, a critique of how NAFTA was "sold" to the public, and a call for unilateral liberalization in light of the fast track failure.

Staffing

William Niskanen, Chairman of the Cato Institute, oversees the Center for Trade Policy Studies. Dr. Niskanen has written and lectured extensively on international trade and served as acting chairman of the President’s Council of Economic Advisers under the Reagan administration. Dr. Niskanen received his B.A. from Harvard and his Ph.D. from the University of Chicago. He served two years as assistant director of the Office of Management and Budget, was a professor of economics at UC Berkeley and UCLA, and worked as chief economist for Ford Motor Company. His published books include: Bureaucracy and Representative Government and Reaganomics: An Insiders Account of the Policies and the People.

Brink Lindsey, Cato Institute senior fellow, is director of the Center for Trade Policy Studies. Prior to becoming director, Mr. Lindsey worked for seven years as an attorney with Willkie Farr & Gallagher specializing in international trade regulation. Mr. Lindsey was formerly Cato’s director of regulatory studies and senior editor of Regulation magazine. Mr. Lindsey received his undergraduate degree from Princeton and his law degree from Harvard.

Dan Griswold is associate director of the Center. Griswold was the editorial page editor for the Colorado Springs Gazette for 12 years, and was formerly press secretary for Congressman Vin Weber. He has degrees in economics and the politics of the world economy from the London School of Economics.

Aaron Lukas is a policy analyst with the Center. Lukas previously worked as Cato's manager for information services. Prior to that, he spent several years in Eastern Europe promoting free-market education. He received his B.A. in political science from Texas A&M University and his M.A. in international economics from The George Washington University.