Walking on Trade Adjusted Eggshells

Logan KolasSince its inception in 1962, Trade Adjustment Assistance (TAA) has been portrayed as a way to help workers affected by trade adjust to a changing economy, but its political objective may be more important than any policy purpose: The program was viewed by many politicians and scholars as a political tool to mute free trade opposition from those with enough political sway to block or slow trade liberalizing efforts. Only by pacifying their objections to trade liberalization would free trade be able to flourish. Unfortunately, if the goal of Trade Adjustment Assistance was to buy support for trade, it has failed to achieve that objective.It is this context, that makes a newpaper (and its companionop-ed) by Sung Eun Kim and Krzysztof Pelc surprising. They find that Trade Adjustment Assistance and demands for protectionism act as substitutes, where increases in Trade Adjustment Assistance can lead to a reduction in the desire for market-distorting tariffs – specifically, antidumping tariffs. As they put it: "compensation for trade-affected workers can in fact preempt protectionism."Finding ways to reduce the demand for protectionism would be great. However, I want to take a moment to push back a little on their suggestions and add a few words of caution.First, their methodology for identifying protectionism takes into account only antidumping tariffs. But while antidumping is a particularly abusive example, it is not the universe of protectionism, as the Trump admini...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs