Two decades ago, the United States demanded that other countries in the World Trade Organization (WTO) agree to significant restrictions on “trade distorting subsidies” of various sorts, such as government grants, tax breaks, or other benefits that would allow companies an unfair advantage against others in the international market. All well and good, but as the proverb has it: “Physician, heal thyself.” Read more »

When President Bill Clinton was trying to persuade Congress to pass the North American Free Trade Agreement (NAFTA) in 1993, administration officials frequently made the claim that each additional $1 billion in exports would produce 17,000 new jobs in the United States. Implicit in the claim was the idea that NAFTA and other free trade agreements would trigger a big growth in exports, and that exports would be an engine of job creation. Read more »

As President Obama mulls over the appointments for his second term cabinet, there’s one job that deserves a much higher priority than it’s had in the recent past: the Commerce Secretary. Commerce secretaries have normally been almost an afterthought in presidential appointments, and rarely leave a lasting mark. But there is no position in the government that plays a bigger role in what the president has identified as his top second-term goal: reviving a stronger middle class in the United States. Read more »

I have a suggestion for everyone who writes about international trade: it is time to bury, once and for all, the concept of a “trade war.” The phrase is so ubiquitous that it will be awfully hard to abolish; I have probably been guilty myself from time to time. Indeed, it is almost a reflex that every time the United States or some other nation takes any action that restricts imports in any fashion, reporters and editorial writers jump to their keyboards to warn that a trade war is looming. But it is a canard that makes it far harder to have a sensible discussion about U.S. trade policy. Read more »

The U.S.-China Business Council’s just-released survey on the environment for U.S. companies doing business in China is far more striking for what it doesn’t say than what it does. Of the top ten problems for business in dealing with China, there is no mention of tariffs, or quotas, or even of China’s undervalued currency, which has featured so prominently in the presidential election campaign. Instead, the problems are things like licensing approvals, intellectual property theft, foreign investment restrictions, competition with state-owned enterprises, and unfair regulatory standards. Read more »

NEW YORK – With most of the world focused on economic instability and anemic growth in the advanced countries, developing countries, with the possible exception of China, have received relatively little attention. But, as a group, emerging-market economies have been negatively affected by the recent downturn in developed countries. Can they rebound on their own? Read more »

The following is a guest post by two of the leading experts on Chinese foreign direct investment in the United States, and on the U.S. government’s investment review process. Thilo Hanemann is Research Director at the Rhodium Group, an economic research firm based in New York, and Daniel Rosen is China Practice Leader at Rhodium and a visiting fellow at the Peterson Institute for International Economics. Read more »

On the same day last week that President Obama was issuing an order blocking a Chinese company from acquiring several Oregon wind farms, the Financial Times had a fascinating story on the changing politics of the U.S. trade relationship with China. While both the president and his Republican challenger Mitt Romney are trying to one-up each other over the economic threat posed by China, the mayor of Toledo, Ohio – the swing state of all swing states – was busy courting some 150 potential Chinese investors, trying to persuade them to bring jobs into the hard-hit local economy. Read more »

President Obama has become the first president in 22 years to issue a formal order blocking a foreign investment into the United States on national security grounds. The decision, which denies the acquisition of a small Oregon wind farm project by a Chinese-owned company, will unfortunately be seen as yet another signal – this time from the highest possible level — that the United States does not really want Chinese investment. And for an economy still struggling to create jobs, that’s the wrong signal to send. Read more »

In an era in which companies enjoy unprecedented mobility to invest where they choose, one of the toughest issues for governments at the federal, state, and local level  is deciding what to do to attract and retain those investments. Governments should want to compete for investments that bring jobs, spin-off businesses, and tax revenue. And corporations – often with many suitors — can and do demand tax breaks, cheap energy, help with training programs, improvements in road and air access and other favorable legislation, and regulations that only governments can supply. Read more »