A Blueprint for a New American Trade Policy

Abstract

In this paper, we offer ten recommendations on how to reform American trade policy. These reforms respond to three fundamental challenges: (1) our trade bureaucracy is poorly designed to craft and execute a trade policy that pursues multiple important ends, including economic and national security; (2) the domestic process through which the United States makes trade agreements provides preferential access to certain interest groups (capital and corporations) but not others; and (3) U.S. trade policy has failed to grapple with the distributional consequences of trade liberalization. The first set of reforms addresses the domestic trade policymaking process. These include restructuring the Department of Commerce, the United States Trade Representative (USTR), and other agencies into a new Department of Economic Growth and Security; increasing transparency and participation in the trade policymaking process; conducting geographic impact assessments; and reforming the President’s powers to initiate trade wars. The second set of reforms seeks to rebalance international trade regimes by both conditioning U.S. trade on addressing tax havens and reforming the investor-state dispute system. The final set of recommendations addresses the domestic distributional consequences of trade head on, and include expanding enforcement of labor and environmental issues, enabling domestic economic development projects particularly for areas adversely-impacted by trade liberalization, and taxing the winners of trade.