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Thursday, July 25, 2013

'A Better Way to Think About Trade'

Simon Johnson:

A Better Way to Think About Trade, by Simon Johnson, Commentary, NY Times: Representative Sander Levin of Michigan, the senior Democrat on the Ways and Means Committee, which has jurisdiction over many trade issues, proposed this week that the United States make a significant change in its approach to international trade. ...
Mr. Levin made three main proposals... The first point is that enforceable labor and environmental standards need to be given more emphasis in American trade agreements... Recent horrendous events in Bangladesh have driven home the unfortunate truth that if matters are left purely “to the market,” there will be ... dangerous working conditions. ...
When I discuss these matters with global business executives, almost without exception they are of the opinion that health and safety should be subject to minimum acceptable ... standards everywhere. Mr. Levin is pushing on an open door.
Mr. Levin’s second point is just as compelling. ... Many countries claim to engage in free trade. But some governments ... have become adept at ... engaging in unfair trade practices.
Mr. Levin is talking about removing government distortions, and this is why I expect he may receive a great deal of Republican support.
And this is also where Mr. Levin’s third proposal will really hit a nerve. There are countries that manipulate their exchange rate ... in order to gain a competitive advantage... Again, the issue is ... governments’ getting away with actions that distort markets on a grand scale. Here, too, I don’t know many Republicans who would feel good about this. ...
This is a targeted and responsible proposal. It should get support from both sides of the aisle on Capitol Hill. ...

Short on time and it's late, so I'm going to turn this over to you. Here's a counterargument to one of the points:

Safety laws do workers more harm than good, by Jagdish Bhagwati and Amrita Narlikar

But I don't expect it will find a very receptive audience. Comments?

    Posted by on Thursday, July 25, 2013 at 01:59 AM in Economics, International Trade | Permalink  Comments (29)


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