Rethinking Trade Policy
The proliferation of cross-border investment, disaggregated production processes, and transnational supply chains have blurred the distinctions between "our" producers and "their" producers. When the definition of an American car defies consensus or when the largest U.S. steel producer is a majority-Indian-owned firm with headquarters in Europe or when "Buy American" provisions punish U.S.-based companies, then the time has come to reexamine our premises.
Does trade policy predicated on 20th-century assumptions make sense in the highly integrated global economy of the 21st century? Should the assumptions that trade is a competition between "us" and "them," and that exports are good and imports are bad continue to inform trade policy? Is trade policy necessary, and if so, what is its proper role?