The Future of International Trade Elliot J. Feldman Partner, Baker

1
The Future of International Trade Elliot J.
FeldmanPartner, Baker Hostetler LLP

• The International Bar Association
• Asia Pacific Regional Forum
• Hong Kong SAR
• September 19, 2008

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The Pew Global Attitudes Project World Publics
Welcome Global Trade -- But Not Immigration
October 4, 2007
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• The Pew Global Attitudes Project World Publics
  Welcome Global Trade -- But Not Immigration
  October 4, 2007

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• Trade And World Peace
• Without commerce, without freedom of
  communication either by land or sea, cultivating
  no more of their territory than the exigencies of
  life required, destitute of capital, never
  planting their land (for they could not tell when
  an invader might not come and take it all away,
  and when he did come they had no walls to stop
  him), thinking that the necessities of daily
  sustenance could be supplied at one place as well
  as another, they cared little for shifting their
  habitation, and consequently neither built large
  cities nor attained to any other form of
  greatness.
• Thucydides, The Peloponnesian War, History Of
  Early Times
• It is commerce which is rapidly rendering war
  obsolete . . . international trade is the
  principal guarantee of the peace of the world.
• John Stuart Mill, Principles of Political
  Economy
• . . .unhampered trade dovetailed with peace
  high tariffs, trade barriers, and unfair economic
  competition with war.
• Cordell Hull, United States Secretary of State
• Because each of us has something someone else
  lacks, and we each lack something someone else
  has, we gain by interaction. That is what makes
  trade the most compelling counterforce to war.
• Jonathan Sacks, The Dignity of Difference

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• World Trade Events And Partisanship
• 1922 Fordney-McCumber Tariff (Warren G.
  Harding -- Republican) RESTRICT (R)
• 1930 Smoot-Hawley Tariff (Herbert Hoover --
  Republican) RESTRICT (R)
• 1934 Reciprocal Trade Agreements Act (FDR --
  Democrat) EXPAND (D)
• 1945 1946
• Congress Denies Trade Negotiation
  Authority (Republican) RESTRICT (R)
• Congress Opposes GATT
  
  RESTRICT (R)
• 1947 GATT Approval (Truman Democrat)
  EXPAND (D)
• Reduce Tariff On Wool
  
  EXPAND (D)
• 1955 GATT Waiver For Agriculture (Eisenhower
  Republican) RESTRICT (R)
• 1962 Beginning Of Kennedy Round (JFK
  Democrat) EXPAND
  (D)

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World Trade Events And Partisanship(cont.)

• 1974 Multifiber Agreement Restricting Textiles
  (Nixon Republican) RESTRICT (R)
• Enhancement Of Trade Remedies
  RESTRICT (R)
• 1983 VRAs On Steel And Automobiles (Reagan
  Republican) RESTRICT (R)
• 1988 FTA With Canada (Reagan
  Republican) EXPAND (R)
• 1994 NAFTA (Clinton Democrat)
  EXPAND (D)
• 1995 Uruguay Round Agreements Act (Clinton
  Democrat) EXPAND (D)
• 1996 Farm Bill (Clinton Democrat)
  EXPAND
  (D)
• 2002 Farm Bill (Bush Republican)
  RESTRICT
  (R)
• Steel Quotas RESTRICT (R)
• Softwood Lumber Cases
  RESTRICT
  (R)

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Blame China

• There is plenty of blame to go around . . .
  Chinas role in the demise of the Doha Round is
  particularly
• dismaying . . . U.S. supporters of Chinese
  inclusion in the WTO argued that drawing China
  into a system of multilateral give-and-take would
  mute its nationalistic tendencies. Evidently,
  the Chinese see the matter differently. They,
  and the world, will be poorer because of it.
• The Washington Post, July 30, 2008

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• The antidumping proceeding always has been and
  is increasingly a protectionist device, as
  various Congresses have amended the underlying
  statute to make the proceeding and remedy more
  effective. The darker face of the antidumping
  proceeding is so well known inside the Washington
  Beltway that it has become a trite joke among
  trade lawyers that antidumping is the
  protectionists weapon of choice.
• Kenneth Dam, Former Deputy Secretary, U.S.
  Treasury
• The Rules Of The Global Game

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Interest-Group Liberalism

• T criteria drawn from interest-group
  liberalism The most important difference
  between liberals and conservatives, Republicans
  and Democrats, is to be found in the interest
  groups they identify with. Congressmen are
  guided in their votes, presidents in their
  programs, and administrators in their discretion
  by whatever organized interests they have taken
  for themselves as the most legitimate and that
  is the measure of the legitimacy of demands and
  the only necessary guidelines for the framing of
  the laws. Theodore J. Lowi, The End of
  Liberalism

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U.S. Approach To Subsidy Allegations Against
China

• Chinese officials are not to be trusted, deceive
  and conceal information
• State-owned enterprises subsidize because they
  are state-owned
• State planning always implies subsidies
• Anything the government owns and sells is sold at
  less than adequate remuneration

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According To Commerce, The Chinese Government Is
Not To Be Trusted

• a de facto problem with land supply in China
  which causes market distortions is that of local
  government corruption.
• The GOC purposefully made a decision to conceal
  how the information on ownership structure was
  derived.
• We continue to find that the GOC misrepresented
  how the information was obtained, and have drawn
  adverse inferences accordingly.
• The GOC did not provide crucial information
  requested several times by the Department
• The GOCs legal counsel . . . misrepresented
  the source of the information.

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Views of China in the WestThe Pew Global
Attitudes Project How the World Feels About
China China Feels About Itself the World
Presented on July 29, 2008 at the Carnegie
Endowment for International Peace in Washington,
D.C.
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Senator McCain On Trade

• In Michigan Ive got to give you some straight
  talk. Some of the jobs that left the state of
  Michigan are not coming back. But I believe that
  we can develop a plan to take care of these
  workers who have lost their jobs my friends.
• Senator John McCain, January 2008
• In Iowa My friends, we will disagree on a
  specific issue and thats healthy. I believe in
  renewable fuels. I dont believe in ethanol
  subsidies.
• Senator John McCain, August 2008

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McCain v. Obama

• If I am elected president, have no doubt that
  America will honor its international commitments
  and we will expect the same of others. We will
  strengthen and extend the open and rules-based
  international trading system
• Senator John McCain, in Ottawa, Canada, June
  2008
• What I opposeand what I have always opposed
  are trade deals that put the interests of
  multinational corporations ahead of the interests
  of American workers--like NAFTA, and CAFTA, and
  permanent normal trade relations with China.
• Senator Barack Obama, Philadelphia, April
  2008
• I also dont oppose all trade deals. I voted
  for two of them because they have the worker and
  environmental agreements I believe in. Some of
  you disagreed with me on this but I did what I
  thought was right. Thats the truth.
• Senator Barack Obama, Pittsburgh, April 2008
• One million jobs have been lost because of
  NAFTA, including nearly 50,000 jobs here in Ohio.
  And yet, ten years after NAFTA passed, Senator
  Clinton said it was good for America. Well, I
  dont think NAFTA has been good for America and
  I never have.
• Senator Barack Obama, Ohio, February 2008

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National Post, March 7, 2008 (Editorial Page)
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On The Democratic Party Platform

• Trade has been a bigger part of the campaign so
  far this year, and I think it probably will
  continue to be. I think it does account for the
  rather more extensive attention paid to it in the
  platform compared to four years ago.
• Professor Daniel Tarullo, August 2008

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Obama On China

• America and the world can benefit from trade
  with China.
• Seeing the living standards of the Chinese
  people improve is a good thing good because we
  want a stable China, and good because China can
  be a powerful market for American exports.
• Senator Barack Obama, April 2008