Answer to Question #220555 in Economics for Sasha Lewis

Question

Identify and discuss how international trading policies have changed in light of the deepening of the neo-liberal project of globalization, and the impact of these changes on a small, open economy of your choice. 

Answer 1

A number of researchers note that up to the election of Trump, American big business actively supported the policy of free trade and multilateral trade agreements, and also acted as its main beneficiary. Michael Dreiling and Derek Darves argue that American big business support for free trade is due not only to the internationalization of production and investment from the 1970s to 1980s but also to the inclusion of business players in various networks and organizations, such as the Business Roundtable ( Business Roundtable), within which a collective, class position on this issue was developed. Thus, freedom of trade is an organic part of the neoliberal project as a class project of capital. In this capacity, it is regularly criticized by workers and environmental organizations, the anti-globalization movement, but until now, American leaders have consistently adhered to this course.

Donald Trump was the first successful presidential candidate to oppose free trade as a principle. During the campaign, he threatened to impose prohibitive tariffs on American firms laying off workers in order to relocate production to another country and then supply goods to the American market; he also threatened tariffs for countries - "trade fraudsters", which included primarily China. Critics of Trump's views on international trade reveal his divergence from the neoliberal doctrine on the issue. ... Instead of creating rules of the game in which companies are free to choose, they seek to negotiate the outcome of the game: more cotton to China and liquefied natural gas to Japan, more Carrier jobs in Indiana. ” Thus, Trump and his team not only do not share the neoliberal belief in the mutually beneficial nature of international trade, but they are also supporters of direct, results-based intervention, as opposed to the process-oriented distance (arm's length) regulation characteristic of neoliberalism.

Trump's stance on international trade is one of the key elements of his populist America First platform. The rhetorical rationale for the new trade policy is, on the one hand, the protection of national interests in negotiations with other states, on the other hand, the protection of American workers and American industry: not only from aggressive exports from developing economies but also from the practice of American companies to withdraw production from borders of the country. At the same time, it is characteristic that Trump, while attacking China and other states, which he considers “trade frauds”, avoids the same large-scale criticism of American business. In clarifications on the White House website, the main beneficiaries of the previous trade policy in general and multilateral trade agreements, in particular, are not transnational corporations, but vague “insiders”, “Washington elite” and “Washington establishment”.

Trump's new line on foreign trade is not limited to populist rhetorical exercises: it has a class dimension. Trump is leaning on what can be described as a non-internationalized segment of American business, judging by a number of pieces of evidence. It includes, in particular, the steel industry, one of the last industries opposing the transnationalization of production. Several of Trump's appointments are associated with this sector. New Commerce Secretary Wilbur Ross, businessman and $ 2.5 billion fortune, in the early 2000s. invested in steel companies, taking advantage of the steel import tariff imposed by the George W. Bush administration. In turn, the new US Trade Representative, Robert Lighthizer, lobbied the interests of the steel industry as a lawyer, becoming famous as "the most protectionist person in Washington" (The Economist 2016). Trump's transition team also includes Dan Dimicco, the former head of steel company Nucor and author of Made in America: Why Manufacturing Will Give Us Glory Back.