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A Winning Trade Policy for the United States

A CFR Discussion Paper

Authors: , Bernard L. Schwartz Senior Fellow, and , Adjunct Senior Fellow

A Winning Trade Policy for  the United States - a-winning-trade-policy-for-the-united-states

Publisher Council on Foreign Relations Press

Release Date September 2016

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Overview

The once-bipartisan consensus favoring agreements that reduce barriers to trade and investment has broken down, largely because of a decades-long failure of policy to facilitate the adjustment of those U.S. workers who have fared poorly in a more competitive global economy and to better tackle trading practices by some nations that have harmed some U.S. workers and firms. The United States needs to tackle these unfair practices while helping Americans who lose their jobs—whether due to trade competition, automation or changing consumer preferences—to find other opportunities. But pulling out of existing trade agreements or slapping across-the-board tariffs on imports—as some are now advocating—would do nothing to address these more fundamental challenges. Protectionism is a backward-looking strategy that will only drive companies and investment away from the United States and encourage other countries to retaliate in kind. Raising trade barriers will hurt Americans as consumers and harm workers in firms that benefit from trade and are among the most innovative and successful in the United States. Protectionism will erode the United States' edge as the world's most innovative economy and will not help workers displaced by technological change and shifting consumer preferences.

The United States needs trade and economic policies that are forward looking, that help competitive industries, firms, and workers by creating new opportunities in fast-growing foreign markets. It needs more prompt and effective enforcement of trade laws to stop some foreign competitors from stealing technology, subsidizing their industries, or deliberately suppressing currency values to gain an unfair advantage in global markets. Most overdue are new, comprehensive, and universal policies that equip workers with the education and skills they need throughout their working lives, and not just in their high school and college years, to secure rising incomes and greater opportunities for themselves and their children. Such a forward-looking agenda would prepare workers and citizens for the future and help rebuild confidence that U.S. trade policies will benefit more Americans and help to cushion the transition for those who are harmed.

Selected Figures From This Report

Republicans and Democrats Diverge on Whether Free Trade Agreements Are Good for the United States

Global Absolute Gains in Income, 1998-2008

Photo: Bob Riha Jr./Reuters

More About This Publication

Edward Alden is the Bernard L. Schwartz senior fellow at the Council on Foreign Relations (CFR) and the author of the forthcoming book Failure to Adjust: How Americans Got Left Behind in the Global Economy. He was the project director for CFR’s Independent Task Force on U.S. Trade and Investment Policy, co-chaired by former White House chief of staff Andrew Card and former Senate majority leader Thomas Daschle. Alden directed the Independent Task Force on U.S. Immigration Policy, was co-chaired by former Florida governor Jeb Bush and former White House chief of staff Thomas "Mack" McLarty, and coauthored the CFR report Managing Illegal Immigration to the United States: How Effective Is Enforcement? Alden is also the author of The Closing of the American Border: Terrorism, Immigration and Security Since 9/11, which was a finalist for the J. Anthony Lukas book prize. He has testified before the Congress numerous times on border security and U.S. visa policy.

Robert E. Litan is an adjunct senior fellow at the Council on Foreign Relations. He is an economist and attorney with nearly four decades of experience in law, economic research, and policy, and as an executive in the private, public, and government sectors. Through his extensive publications and many speeches and testimony, Litan has become a widely recognized national expert in regulation, antitrust, entrepreneurship, innovation and finance, and international trade, among other policy subjects. He is currently a partner with Korein Tillery, a law firm based in St. Louis and Chicago specializing in large case antitrust litigation, and a senior consultant to Economists, Inc.

The authors wish to acknowledge the helpful guidance and comments from participants in a CFR Study Group on this topic and to also acknowledge research support from Shelton E. Fitch, research associate at the Council on Foreign Relations.

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