DRAFT: August 23, 2011 PUAF 700 U.S. Trade: Policy and Politics Fall 2011 Tuesday, 1:30-4:00 pm Professor I. M. (Mac) Destler mdestler@umd.edu Van Munching Hall 4107 http://www.publicpolicy.umd.edu/faculty/destler phone: 301-405-6357 Office hours: Tues 4-5; Thurs 11-12* fax: 301-403-8107 After two years of slumber, Obama trade policy came alive in 2011. After negotiations with Korea, Colombia, and Panama, the President moved to win Congressional approval of free-trade agreements carrying over from the Bush administration. His admnistration also pursued a broader Trade Partnership of the Pacific (TPP), whose original target date was the Asia-Pacific Economic Cooperation (APEC) summit that Obama will host in Honolulu this November. And it entered the second year of its commitment to double US exports between 2009 and 2015. The United States possesses the world s largest economy, and is the most important force in global trade, China notwithstanding. So US trade policies have enormous impact on the world economic order. But they are driven primarily by US domestic processes and politics. This course treats the politics, economics, and laws shaping United States trade policy. Among the topics it highlights are the internationalization of the American economy; the simultaneous US engagement in global, regional, and bilateral trade negotiations; the shaky political base for such negotiations, and the process for managing them; the huge (and again rising) US trade deficit its causes and effects; the impact of the World Trade Organization (and stalemate in the Doha Round); the US trade relationship with China; and the broad controversy over globalization. Students taking the course will benefit from prior exposure to micro- and macroeconomics, and to American politics The course is divided into two unequal parts. The first ten weeks (Part I) aim to provide students a solid grounding in the major elements and issues of US trade policy. At the eleventh class session there is an exam, which will count for roughly 60 percent of students' final grades. In Part II, the final four weeks, we will read interesting books which offer broad vantagepoints on trade policy and institutions. *NOTE: These office hours will prevail most of the time. I will try to provide advance notice if I will not be in at the standard time. Students can also make appointments, or drop in, at other times. I post my weekly schedule on my office door, which is usually open when I m in.
PUAF 700 syllabus 2 DRAFT: August 23, 2011 Course requirements: There will be a two-hour examination at the end of Part I. Each student will also write two short (5-page) papers and make two brief seminar presentations. Detailed instructions will be distributed in class and posted on BLACKBOARD. Also available there will be the schedule of student presentations and copies of prior exams. Students should acquire copies of five books: TO BE PURCHASED: th I. M. Destler, American Trade Politics, 4 Edition (Peterson Institute for International Economics [IIE] 2005). Frederick Mayer, Interpreting NAFTA: The Science and Art of Policy Analysis (Columbia University Press, 1998). Pietra Rivoli, The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power and Politics of World Trade (John Wiley and Sons, paperback edition, 2009). Dani Rodrik, The Globalization Paradox: Democracy and the Future of the World Economy (W. W. Norton & Company, 2011). EITHER: Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (Oxford University Press, 2011); OR Carmen M. Reinhart and Kenneth S. Rogoff, This Time is Different: Eight Centuries of Financial Folly (Princeton University Press, 2009. [The class will choose which of the two early in the term.]. AVAILABLE THROUGH THE INSTRUCTOR: Economic Indicators, Prepared for the Joint Economic Committee by the Council of Economic Advisers, July 2011, no charge distributed at first class http://www.gpoaccess.gov/indicators/11julbro.html Other readings will be available through BLACKBOARD except as specifically stated. And students should connect periodically to websites such as: wto.org; usitc.gov, ustr.gov, piie.com, freetrade.org, ceip.org, cato.org/trade-immigration, aei.org/ra/8, aflcio.org, citizen.org/trade, and maketradefair.com.
PUAF 700 syllabus 3 DRAFT: August 23, 2011 PART I. POLICY AND POLITICS: MAJOR TOPICS September 6: Trade Numbers and Their Meaning (materials to be distributed in class) References: Nominal Dollar Exchange Rate Index 2000-2011, chart prepared by the instructor from Federal Reserve Board data. U.S. Congress, Joint Economic Committee, Economic Indicators, July 2011. U.S. Department of Commerce, U.S. International Trade in Goods and Services: Annual Revision for 2010, Exhibit 13 (Annual Country Totals). (http://www.census.gov/foreign-trade/press-release/2010pr/final_revisions/10final.pdf) U.S. Department of Commerce, U.S. International Trade in Goods and Services: June 2011, Summary and Exhibits 1, 6, 9, 14, and 14a. (http://www.bea.gov/newsreleases/international/trade/2011/pdf/trad0611.pdf). "U.S. Merchandise Trade Balances, 1980-2011," and US Merchandise Trade With.....In 2010": tables prepared by the instructor from Commerce data. September 13: U.S. Trade Politics: The Basic System Reading: Destler, American Trade Politics, chaps 1-5 and 7. September 20: Trade, Exchange Rates, and Macroeconomics Council of Economic Advisers (CEA), The World Economy, Economic Report of the President, February 2011, chap. 4 (esp. pp. 81-103). Department of the Treasury, Office of International Affairs, Report to Congress on International Economic and Exchange Rate Policies, May 27, 2011, pp. 4-12. (http://www.treasury.gov/resource-center/international/exchange-rate-policies/d ocuments/fx%20report%20final%205-27-11.pdf) Paul R. Krugman and Maurice Obstfeld, International Economics: Theory and Policy (Pearson Education Limited, 8th edition, 2008), chap. 12 (pp. 288-316) and chap. 13 (esp. pp. 317-27 and 341ff). Chap. 14 is available. (Students may use th the 9 edition if they wish.) Review trade balance data distributed August 31st.
PUAF 700 syllabus 4 DRAFT: August 23, 2011 September 27: Trade and Microeconomics C. Fred Bergsten, Kimberly Ann Elliott, Jeffrey J. Schott, and Wendy E. Takacs, Auction Quotas and United States Trade Policy (IIE, 1987), chap. 2 (pp. 13-30). Krugman and Obstfeld, International Economics, chap. 3 (pp. 27-53). Skim chap. 4. Chap. 5 is available. Charles Schumer and Paul Craig Roberts, Second Thoughts on Free Trade, New York Times, January 6, 2004' and rebuttal by Michael Kinsley, Free Trade But.., January 9, 2004. [link on Blackboard, Course Documents ] October 4: Coping with Imports: Trade Protection Destler, ATP, chaps 6 and pp. 233-42 and 246-52. (also skim Glossary). Edward Gresser, Toughest on the Poor: America s Flawed Tariff System, Foreign Affairs, November-December 2002; and Gresser s 7/31/08 update,* Taxing the Poor. [*link on Blackboard, Course Documents ] N. Gregory Mankiw and Philip L. Swagel, Antidumping: The Third Rail of Trade Policy, Foreign Affairs, July-August 2005, pp. 107-119. October 11: China Destler, ATP, pp. 211-13 and 274-77 C. Fred Bergsten, Charles Freeman, Nicholas R. Lardy, and Derek J. Mitchell, China s Rise (Peterson Institute for International Economics and Center for Strategic and International Studies, 2008), chs. 1 (pp. 9-32) and 10 (209-233). Morris Goldstein and Nicholas R. Lardy, The Future of China s Exchange Rate Policy (Peterson Institute: Policy Analysis in International Economics 87, July 2009), ch. 3 (pp. 83-96). Arvind Subramanian, The Inevitable Superpower: Why China s Dominance is a Sure Thing, Foreign Affairs, Sept/Oct 2011. Asian Currencies and the RMB, October 2011, weekly Peterson Institute spreadsheet to be distributed by instructor.
PUAF 700 syllabus 5 DRAFT: August 23, 2011 Department of the Treasury, Office of International Affairs, Report to Congress on International Economic and Exchange Rate Policies, May 27, 2011, Key Findings, pp. 2-3, and China, pp. 12-15. (http://www.treasury.gov/resource-center/international/exchange-rate-policies/d ocuments/fx%20report%20final%205-27-11.pdf) Schumer on Chinese currency: 'More convinced than ever' Congress needs to act, The Hill, April 28, 2011, (http://thehill.com/blogs/on-the-money/1005-trade/158233-schumer-on-chinese-c urrency-more-convinced-than-ever-congress-needs-to-act October 18: The New American Trade Politics C. Fred Bergsten, World Trade at Risk (Peterson Institute: Policy Brief 08-5, May 2008, 3 pp). http://www.piie.com/publications/pb/pb08-5.pdf Destler, ATP, chs. 10 & 11. [Skim Appendix] Destler, American Trade Politics in 2007: Building Bipartisan Compromise (Peterson Institute: Policy Brief 07 5, May 2007, 13 pp. plus appendices). http://www.piie.com/publications/pb/pb07-5.pdf. Destler, First, Do No Harm: Foreign Economic Policy Making Under Barack Obama, ch. 11 in U.S. Foreign Policy Today: American Renewal? (CQ Press, 2011), read pp. 205-16. Pew Research Center for the People and the Press, Americans Are of Two Minds on Trade, Novemb er 9, 2010. (http://pewresearch.org/pubs/1795/poll-free-trade-agreements-jobs-wages-e conomic-growth-china-japan-canada) Gilbert R. Winham, International Regime Conflict in Trade and Environment: The Biosafety Protocol and the WTO, Dalhousie University, September 2002. [Blackboard, Course Documents ]
PUAF 700 syllabus 6 DRAFT: August 23, 2011 October 25: The World Trade Organization and the Doha Round (with Ambassador Schwab?) The Doha Round: Setting a Deadline, Defining a Final Deal, Interim Report of the High-Level Experts Group, Jagdish Bhagwati and Peter Southerland, cochairs, January 12, 2011, 20pp. [Blackboard, Course Documents. Hufbauer, Schott and Wong, Figuring Out the Doha Round, (Peterson Institute, June 2010), chs. 1 (Overview, pp. 1-15) and 4 (Conclusion, pp. 105-108). Schwab, Susan, After Doha: Why the Negotiations Are Doomed and What We Should Do About It, Foreign Affairs, May/June 2011, pp. 104-117. Stokes, Bruce. WTO Dispute Panels Gain Power, National Journal, August 7, 2010, pp. 43-45. WTO website, Understanding the WTO: Settling Disputes. November 1: Alternatives to Global Agreements Claude Barfield, The Trans-Pacific Partnership: A Model for Twenty-First Century Trade Agreements? American Enterprise Institute, Outlook #2, June 2011. (http://www.aei.org/doclib/ieo-2011-02-g.pdf) C. Fred Bergsten, Competitive Liberalization and Global Free Trade: A Vision st for the Early 21 Century, IIE Working Paper 96-15, 1996, 17pp. Destler, ATP, pp. 197-206. (review pp. 96-101, 134-35, and 298-302) Simon J. Evenett and Michael Meier, An Interim Assessment of the U.S. Policy of Competitive Liberalization, The World Economy, 2008, pp. 31-66 (http://www.evenett.com/research/articles/evenett_meier_world_economy_2008.pdf) Jeffrey J. Schott, Why the Korea-United States Free Trade Agreement is a Big Deal, SERI Quarterly, July 2011, pp. 23-29. November 8: Whither U.S. Trade Policy? Destler, ATP, ch. 12. Council on Foreign Relations, Report of the Independent Task Force on U.S. Trade Policy, September 2011.
PUAF 700 syllabus 7 DRAFT: August 23, 2011 November 15: Examination U.S. Trade Promotion Coordinating Committee, 2011 National Export Strategy: Powering the National Export Initiative, June 2011. Read pp. 1-18, skim the rest. (http://www.trade.gov/publications/pdfs/nes2011final.pdf) Other items may be added. PART TWO: FOUR CRITICAL PERSPECTIVES November 22: More Than You Wanted to Know About What You Wear Reading: Pietra Rivoli, The Travels of a T-Shirt in the Global Economy. November 29: Why Did NAFTA Happen? Reading:: Frederick Meyer, Interpreting NAFTA. December 6: Is the Dollar Doomed? Reading: Barry Eichengreen, Exorbitant Privilege, OR Reading: How Nations Dig Deep, Deep Holes Carmen Reinhart and Kenneth Rogoff, This Time is Different December 13: Has Globalization Gone Too Far? Reading: Dani Rodrik, The Glob alization Paradox