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American Trade Politics
In this comprehensive revision of the most influential, widely read analysis of the US trade policymaking system, Destler addresses how globalization has reshaped trade politics, weakening traditional protectionism but intensifying concern about trade's societal impacts. Entirely new chapters treat the deepening of partisan divisions and the rise of "trade and..." issues (especially labor and the environment). The author concludes with a comprehensive economic and political strategy to cope with globalization and maximize its benefits.
The original edition of American Trade Politics won the Gladys Kammerer Award of the American Political Science Association for the best book on US national policy.
The original edition of American Trade Politics won the Gladys Kammerer Award of the American Political Science Association for the best book on US national policy.
390 pages, Paperback
First published January 1, 1986
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Displaying 1 - 2 of 2 reviews
October 14, 2024
"Comparative advantage" is an elegant economic theory that advocates free trade. However, the real world is far more complicated than the generalized version in the theory, as to adopt free trade as a policy is not just a economic issue but mostly a political issue. Thus, despite near unanimity findings
in the empirical study that free trade has broadly benefited the world economically as the "comparative advantage" theory predicted , we are still struggling to deal with conflicts and push-backs.
The book chronicles the evolve of American trade policy and inner working of the political decision-making. What makes it more than a history book is its comprehensive analysis on the fundamental cause of political impediment to free trade: political imbalance between free trade losers and winners. The losses from the free trade are more concentrated and losers are motivated to exert their political powers. Winners, on the other hand, tend to be politically quite as the benefit of the free trade is dispersed and takes time to materialize.
In author's view, America's 1934 trade policy system is a political mechanism to counter such political imbalance and align trade policy with what free trade economic theory would suggest. First half of the book highlights how congress delegates the trade policy to executive branch to protect itself from the protectionist pressures, how different bureaucracies in the executive branches, especially Trade Representatives (USTR), bridge business interests, congress and white house to promote trade, and how semi-judicial process of trade remedies works as pressure relief mechanism.
Another theme of the book is the new challenges America's free trade policy faced in 70s and 80s, and how 1934 system dealt with them. The last part of the book also brings the new development in 90s and early 2000s into the picture, touches on topics such as political polarization and the rise of China and the increasing trade imbalance between US and China.
To draw lessons from the history are absolutely important for today's purpose, as we are a facing a tough trade environment: the doha round is basically dead; TPP and TTIP are buried in the wave of anti-trade populism; Donald Trump became the first American president winning the election with an extreme anti-trade policy platform. Liberal trade order, aka 1934 system that Washington establishment/elites have believed and endorsed since great depression might come to an end soon. Or is the system resilient enough to survive another round of trade protectionism? After all, it survived 80s.
As the author correctly pointing out, the 80s protectionists are mostly business/corporate, who lost out in the competition with foreign imports, while 21st century protectionists are mostly labors, who suffer from lower wage and less job opportunity due to what they perceive, rightly or wrongly, as the consequences of the free trade. The 1934 system was built to deal with 80s' protectionism but not 21st century's. The trade authority delegated to executive branch gives president enough power to implement his/her own anti-trade agenda without much counter-balancing power in congress. Therefore, I fear there will be serious blow-back to free-trade for an extended period of time.
in the empirical study that free trade has broadly benefited the world economically as the "comparative advantage" theory predicted , we are still struggling to deal with conflicts and push-backs.
The book chronicles the evolve of American trade policy and inner working of the political decision-making. What makes it more than a history book is its comprehensive analysis on the fundamental cause of political impediment to free trade: political imbalance between free trade losers and winners. The losses from the free trade are more concentrated and losers are motivated to exert their political powers. Winners, on the other hand, tend to be politically quite as the benefit of the free trade is dispersed and takes time to materialize.
In author's view, America's 1934 trade policy system is a political mechanism to counter such political imbalance and align trade policy with what free trade economic theory would suggest. First half of the book highlights how congress delegates the trade policy to executive branch to protect itself from the protectionist pressures, how different bureaucracies in the executive branches, especially Trade Representatives (USTR), bridge business interests, congress and white house to promote trade, and how semi-judicial process of trade remedies works as pressure relief mechanism.
Another theme of the book is the new challenges America's free trade policy faced in 70s and 80s, and how 1934 system dealt with them. The last part of the book also brings the new development in 90s and early 2000s into the picture, touches on topics such as political polarization and the rise of China and the increasing trade imbalance between US and China.
To draw lessons from the history are absolutely important for today's purpose, as we are a facing a tough trade environment: the doha round is basically dead; TPP and TTIP are buried in the wave of anti-trade populism; Donald Trump became the first American president winning the election with an extreme anti-trade policy platform. Liberal trade order, aka 1934 system that Washington establishment/elites have believed and endorsed since great depression might come to an end soon. Or is the system resilient enough to survive another round of trade protectionism? After all, it survived 80s.
As the author correctly pointing out, the 80s protectionists are mostly business/corporate, who lost out in the competition with foreign imports, while 21st century protectionists are mostly labors, who suffer from lower wage and less job opportunity due to what they perceive, rightly or wrongly, as the consequences of the free trade. The 1934 system was built to deal with 80s' protectionism but not 21st century's. The trade authority delegated to executive branch gives president enough power to implement his/her own anti-trade agenda without much counter-balancing power in congress. Therefore, I fear there will be serious blow-back to free-trade for an extended period of time.
June 3, 2018
I read this book many years ago. It very relevant now in terms of understanding Trump and the MAGA crowd. Essentially, (and this is my summary mixed with 10 or 15 years of my own thoughts) this book points out that the efficiency gains from trade are apparent to virtually all people who are educated enough to have read Adam Smith. But, politicians find it difficult to support free trade because the loudest voices tend to be the small groups that stand to loose (coal miners are a very small part of the American population), while the general population doesn’t care enough or notice general price decreases to make trade their single most important election criteria. In other words, coal miners go on strike, but the general population doesn’t vote someone out of office because TV prices go up 25%. So, Congress has put in place structures, mechanisms, and institutions that allow them to reduce political pressure on them. For example, the US Trade Representative has a lot of autonomy, which allows members of Congress and the president to say that they are not negotiating a trade deal. The USTR is not elected and therefor shielded from political pressure. The USTR then negotiates with each special interest group and gets, for example, agricultural interests to back the deal that hurts the coal industry or intellectual property interests to back a deal that hurts manufacturing interests. And society as a whole benefits.
What I realize now is that unemployed coal miners don’t have the Capitol to buy a farm and assembly plant works will temperamentally never be suited to learning how to market iPhones to the Chinese market. Just as importantly, while tariffs on TVs are easily quantified and enforced, it’s much harder to quantify and enforce stolen IP rights. So, the benefits of free trade have accrued to everyone as a whole, but with greater incremental benefits to the Chinese in relation to the United States and greater incremental benefits to American white collar workers with significant costs to American blue collar workers.
In the long term, this is shifting wealth from the lower middle class to a much smaller group of wealthy individuals. A significant increase in the GINI coefficient contributes to the political instability and class polarization. In other words, a significant percentage of the market capitalization of Google needs to go toward somehow supporting the coal miners of West Virginia who will never—no matter how much money is spent on job retraining—be able to learn java script.
It also strengthens a militarily confrontational power at the expense of Western democratic values like political and social freedoms. This means that a significant percentage of Chinese military hardware was paid for with intellectual property stolen from Google.
And yet, simply raising tariff barriers and engaging in trade wars will decrease the overall wealth of all countries that engaged in free trade. Understanding the Byzantine ways in which American Trade Politics was designed to work will increase the chances that we will preserve the benefits of free trade while reducing the social impact of free trade agreements.
What I realize now is that unemployed coal miners don’t have the Capitol to buy a farm and assembly plant works will temperamentally never be suited to learning how to market iPhones to the Chinese market. Just as importantly, while tariffs on TVs are easily quantified and enforced, it’s much harder to quantify and enforce stolen IP rights. So, the benefits of free trade have accrued to everyone as a whole, but with greater incremental benefits to the Chinese in relation to the United States and greater incremental benefits to American white collar workers with significant costs to American blue collar workers.
In the long term, this is shifting wealth from the lower middle class to a much smaller group of wealthy individuals. A significant increase in the GINI coefficient contributes to the political instability and class polarization. In other words, a significant percentage of the market capitalization of Google needs to go toward somehow supporting the coal miners of West Virginia who will never—no matter how much money is spent on job retraining—be able to learn java script.
It also strengthens a militarily confrontational power at the expense of Western democratic values like political and social freedoms. This means that a significant percentage of Chinese military hardware was paid for with intellectual property stolen from Google.
And yet, simply raising tariff barriers and engaging in trade wars will decrease the overall wealth of all countries that engaged in free trade. Understanding the Byzantine ways in which American Trade Politics was designed to work will increase the chances that we will preserve the benefits of free trade while reducing the social impact of free trade agreements.
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