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America Embraces Trade Discrimination

Authors: Jagdish N. Bhagwati, Senior Fellow for International Economics, and Arvind Panagariya, Professor, Indian Economics, Columbia University
September 29, 2010
Project Syndicate

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Economists generally agree on the advantages of openness in trade. But the case for non-discrimination in trade is also a compelling one. So good trade policy should push for multilateral trade liberalization such as at the Doha Round, rather than preferential trade agreements (PTAs) such as free-trade areas (FTAs), and also ensure that any retreat into protectionism does not degenerate into discriminatory trade practices.

The last G-20 meeting in Canada was a disappointment on the first front. At the insistence of the United States, an earlier reference by the G-20 to a definite date for completing the Doha Round was dropped. Instead, unwittingly rubbing salt into the wound, President Barack Obama announced his administration's willingness to see the US-South Korea FTA through.

On the second front, there are distressing recent reports that the US Commerce Department is exploring ways to strengthen the bite of anti-dumping actions, which are now generally agreed to be a form of discriminatory protectionism aimed selectively at successful exporting nations and firms. Equally distressing is Obama's decision in August 13 to sign a bill, approved in a rare special session of the Senate, that raises visa fees on H1(b) and L-1 temporary work visas in order to pay for higher border-enforcement expenditures.

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