Archives: 01/2018

Sessions Reverses Obama Policy on Marijuana Legalization

From the AP:

Attorney General Jeff Sessions is going after legalized marijuana. Sessions is rescinding a policy that had let legalized marijuana flourish without federal intervention across the country.

That’s according to two people with direct knowledge of the decision. They were not allowed to publicly discuss it before an announcement expected Thursday and spoke on condition of anonymity.

The move will leave it to U.S. attorneys where pot is legal to decide whether to aggressively enforce federal marijuana law. The move likely will add to confusion about whether it’s OK to grow, buy or use marijuana in states where it’s legal, since long-standing federal law prohibits it.

The decision comes days after California began selling recreational marijuana.

Sessions compares marijuana to heroin and blames it for spikes in violence.

While not unexpected, this is terrible news.   

Marijuana liberalizations (decriminalization, medicalization, and legalization) have generated none of the negatives asserted by Sessions; in fact, the evidence shows minimal impact on use, health, traffic safety, education, or crime. 

The one consistent impact of legalization has been a modest bump in state tax revenue.  Libertarians might have mixed feelings about this, but it’s a far cry from Sessions’ baseless assertions.

Highlights from Overlawyered — 2017

At my Cato blog Overlawyered I’ve been pulling together month-by-month highlights of stories from last year. I’m currently up to May in the series. Here’s a small sampling of my favorites: 

Read the whole series here.

Counterinsurgency Math Revisited

When does 32,200 – 60,000 = 109,000? That seemingly inaccurate equation represents the estimated number of Islamist-inspired terrorists when the war on terror began, how many the U.S. has killed since 2015, and the number that fight today. And it begs the question of just how can the terror ranks grow so fast when they’re being depleted so rapidly.

As early as 2003, then-Secretary of Defense Donald Rumsfeld hinted at the potential mathematical problem when he asked, “Are we capturing, killing, or deterring and dissuading more terrorists every day than the madrassas and the radical clerics are recruiting, training and deploying against us?” In his memo, Mr. Rumsfeld correctly identified that both sides have a vote: the U.S. can deplete the terror ranks, while the terror groups and their supporters can replenish them.

What Rumsfeld had not yet imagined, however, was the possibility that military force might inadvertently benefit terror recruitment efforts. Specifically, he ignored the blowback a marauding U.S. military might engender among the Muslim world.

In 2009, General Stanley McChrystal pushed the conversation in that direction. He pointed to the counterintuitive aspects of terror recruiting. Calling it “COIN Mathematics,” he laid out his argument. “Let us say that there are 10 [insurgents] in a certain area. Following a military operation, two are killed.  How many insurgents are left?  Traditional mathematics would say that eight would be left, but there may only be two, because six of the living eight may have said, ‘This business of insurgency is becoming dangerous so I am going to do something else.’ There are more likely to be as many as 20, because each one you killed has a brother, father, son and friends, who do not necessarily think that they were killed because they were doing something wrong. It does not matter – you killed them.  Suddenly, then, there may be 20, making the calculus of military operations very different.” 

Though McChrystal did not explicitly connect U.S. military operations to the perceptions of the broader Muslim community, Osama bin Laden and his number two, Ayman al-Zawahiri, certainly did. Five years before 9/11, bin Laden railed against the presence of the U.S. military in Saudi Arabia, home to the two holiest sites of Islam. On other occasions he spoke of the “American crusader forces” and “American occupiers.” His recurring theme of grievance centered on the U.S. waging war with Islam. Later, in 2005, al-Zawahiri put an exclamation point on it. In a letter to the leader of al Qaeda in Iraq, he reminded him, “The Muslim masses…do not rally except against an outside occupying enemy, especially if the enemy is firstly Jewish, and secondly American.”

Chinese Intellectual Property Policies Demand a Smart U.S. Trade Policy Response – One President Trump Doesn’t Appear to be Considering

Rumors abound that the Trump administration will soon pursue “significant” retaliatory actions in response to alleged Chinese intellectual property rights (IPR) violations, pursuant to “Section 301” of U.S. trade law. While Chinese government IPR policies are indeed cause for concern and while Section 301 does permit the U.S. executive branch to act unilaterally in response to certain foreign trade actions, there is a smart and a not-so-smart approach to these issues, with the latter likely to be unintended by Congress, inconsistent with U.S. trade agreement obligations, ineffective, harmful for U.S. consumers and exporters, and met with a legitimate rebuke from not only China but also other U.S. trading partners. The alternative, on the other hand, would present the President with a golden opportunity to pursue a smart U.S. trade policy response to a serious issue that could achieve the same objectives as the other option, but in a more strategic and effective manner.

If reports are to be believed, the President is unfortunately not inclined to take the smart approach.

Section 301 of the Trade Act of 1974 provides the U.S. executive branch with the authority to enforce U.S. rights under international trade agreements and to respond to certain foreign “unfair” practices not covered by trade agreements. Section 301 is the principal statutory mechanism under which the President may unilaterally (1) determine that a foreign country has violated existing trade agreements or has engaged in acts that are “unjustifiable” or “unreasonable” and burden U.S. commerce; and (2) take retaliatory action to enforce U.S. rights under a trade agreement or to obtain the elimination of the foreign country act in question. The United States Trade Representative (USTR) makes determinations, initiates and conducts investigations, and implements any retaliatory action under Section 301.

Prior to the advent of the World Trade Organization (WTO) dispute settlement system in 1995, USTR frequently invoked Section 301 to seek to eliminate “unfair” foreign government trade practices. The mechanism’s frequent use was in large part due to the fact that the WTO’s predecessor – the General Agreement on Tariffs and Trade (GATT) – provided for less coverage and less accountability than the new WTO system. With the WTO now online and with new WTO rules against Members’ unilateral retaliation (more on this below), Section 301 fell into disuse, with only a few actions since the late 1990s.

In August of last year, however, USTR initiated an investigation of China under Section 301, which sought “to determine whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.” USTR’s notice of initiation lists four types of conduct that were to be examined in the investigation (emphasis mine):

  1. The Chinese government reportedly uses a variety of tools, including opaque and discretionary administrative approval processes, joint venture requirements, foreign equity limitations, procurements, and other mechanisms to regulate or intervene in U.S. companies’ operations in China, in order to require or pressure the transfer of technologies and intellectual property to Chinese companies;
  2. The Chinese government’s acts, policies and practices reportedly deprive U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations with Chinese companies and undermine U.S. companies’ control over their technology in China;
  3. The Chinese government reportedly directs and/or unfairly facilitates the systematic investment in, and/or acquisition of, U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and generate large-scale technology transfer in strategic industries; and
  4. The investigation will consider whether the Chinese government is conducting or supporting unauthorized intrusions into U.S. commercial computer networks or cyber-enabled theft of intellectual property, trade secrets, or confidential business information.

USTR’s findings are officially due by August 2018, but various media outlets report that the Trump administration’s USTR has already completed the Section 301 investigation and is now considering whether to impose steep tariffs on a large swath of Chinese imports. Inside U.S. Trade[$] says that “the 301 remedies against China would include what some called ‘significant’ tariffs covering retaliatory action in the trillion-dollar range,” with USTR arriving “at such a high number by calculating the cumulative damage the U.S. believes China’s IP and tech transfer policies have caused over the past 10 years.” Private groups are expecting tariffs because, as one source put it, “[Trump] seems to like tariffs, not because they’ll do much good.” Axios generally agrees, noting that it’s likely Trump in January will “put tariffs on Chinese consumer electronics as retaliation against the country’s widespread theft of American companies’ intellectual property.”

A massive unilateral tariff response by the United States would be a big mistake rife with legal and economic problems. This is unfortunate because there is widespread, bipartisan agreement in the United States that Chinese IPR practices are a problem – a concern shared by many U.S. trading partners – and because, as noted below, there’s a far smarter approach to this problem under Section 301.

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