3 `THE TRADE POLICY OF THE UNITED STATES UNDER THE TRUMP ADMINISTRATION`

CRAIG VANGRASSTEK

Even the most casual observer will readily see that the international trading system is now in great turmoil, and that much of the uncertainty emanates from the United States. Less evident is the fact that we cannot lay all of the blame for the disorder on a single presidency. The country that had taken the lead after World War II, and whose economy helped to usher in a lengthy period of peace and prosperity, began to devote less attention to trade issues at least a full decade before Donald Trump took office in 2017. Even when the Obama administration took up major initiatives such as the Transatlantic Trade and Investment Partnership (TTIP) and a greatly expanded Trans-Pacific Partnership (TPP), it was reluctant to treat those negotiations with much urgency or to invest significant political capital in them. Trump’s election nevertheless marked a critically significant inflection point, with the American posture toward the system rapidly turning from benevolent indifference to outright hostility. The trading partners of the United States, including erstwhile allies as well as potential adversaries, continue to puzzle over how we got to this juncture, how long we will be here, and where we may next be headed.

While only time and experience can fully answer the latter two questions, we can make a good start by focusing on the first. The principal purpose of this chapter is to place in context these upheavals in US policy so as to assess what might come next. I argue that the evolution of American trade policy is best understood over the long run as a function of the international distribution of power and wealth, and especially the rise and fall of the country’s leadership role, but that in the short run policy is dominated by the exigencies of domestic politics. That latter point is especially relevant in these times, when the specific preferences of one man and his political base overwhelm all other considerations.

These twin internal and external processes coincide on a few critical points. Each is set in motion by the relative decline of the United States, which is in turn the consequence of two related economic processes. The first of these is the Law of Uneven Growth, that observed tendency of leading economies, especially the countries that vie for hegemony, to grow at different rates. That almost inescapable process of asynchronous growth is complemented at the domestic level by Creative Destruction, in which once-dominant industries are gradually displaced by competitors abroad and by new industries at home. These internal and external sources of disequilibrium require that leaders make periodic course corrections in their dealings with partners and rivals at home and abroad. While it is theoretically possible for the United States to navigate a steady course between these two hazards, making compensatory adjustments in its own policies and (if its partners consent) the structure of the international system, such accommodations require clear vision and a deft hand.

Relative decline may be all but inescapable, but still leaves wide scope for the responses of US policymakers. Had the American electorate made a more conventional choice in 2016, we would now be reviewing the continued attempts of orthodox statesmen to tweak the existing domestic and international system. The public instead opted for a man who promised to overturn that system altogether. Many outside observers hoped, and some may even have believed, that Trump’s threats would prove to be mere campaign rhetoric that he would disavow once in office. Years of experience have put those comforting thoughts to rest.

Trade policy in the Trump administration began with a series of year-long phases by which the almost inchoate sentiments of a makeshift campaign were progressively transformed into ever more concrete policy. The first such phase lasted throughout 2016, which was dominated by the first presidential campaign in nearly a century to center on blatant appeals to protectionism, nationalism, and isolationism. The key slogans “Make America Great Again” and “America First” offered a glimpse of what Trump aimed to do in office. The principal theme of 2017 was the transliteration of these messages into somewhat more precise principles of governance. That started with an unapologetically protectionist inaugural address and continued through a series of executive orders espousing such principles as “Buy American and Hire American.” It was not until 2018, however, that this disquieting ideology gave way to truly provocative action. That year began with the granting of protectionist petitions that had been filed months before by producers of solar panels and washing machines, and then turned to broader confrontations over intellectual property rights, steel, aluminum, and automobiles. By year’s end, the United States had incited a full-fledged trade war in which China is the principal adversary but few countries can preserve their neutrality. That phase continued through 2019 and into 2020, which were dominated more by the continuation of established themes or initiatives than by the introduction of new ones.

The question now centers on what the years following 2020 will hold for US trade politics and the larger trading system. The answer will be determined above all else by whether the electorate ensures that the Trump administration was merely a four-year deviation; at the time of this writing, that decision is still four months in the future. Yet even if Donald Trump is denied a second term, the underlying causes of Trumpism may be with us as far as the eye can see. Whether that movement is in power or just waiting in the wings, policymakers in the United States and abroad can no longer take for granted that the United States is willing and able to exercise leadership in the trading system. And even if the country attempts a return to that earlier role, its foreign partners may be more leery than ever before.

`THE CHALLENGE OF GLOBAL GOVERNANCE AND THE RISE OF CHINA`

China is the one element in US trade policy that matters even more than Trump. This is not the first time since World War II that the United States has faced a challenge to its leadership, nor the first time that a precipitous American response seemed to put the multilateral trading system at risk. There are several respects in which the current dynamics replicate those of the 1980s, when US trade policy was dominated by a contest with Japan over industrial supremacy, but there are also some key differences. Chief among them is the conflation of international struggles. American policymakers of a generation ago faced down one rival that was militarily strong but economically weak (the Soviet Union), and another challenger with just the opposite characteristics (Japan). By contrast, US concerns over both power and wealth are today combined in competition with China. The past and present melees are nonetheless alike in the collateral damage that they inflict on third parties. Just as the prior fight with Japan cast doubt on US support for the old General Agreement on Tariffs and Trade (GATT), so too has the current clash undermined the World Trade Organization (WTO). In fact, some of the most provocative measures imposed by the Trump administration have a more serious impact on neighbors and allies than they do on China.

The causes and consequences of Sino-American competition can best be understood by way of the theory of hegemonic stability, a paradigm that explains why global markets are often closed but sometimes open. It rests upon the assertion that an open world market is a public good from which every country benefits, but also acknowledges that it is in the nature of public goods to invite free-riding. Open markets therefore tend to be historically underprovided, with each country reserving the right to determine its own levels of protection, unless one especially influential country steps forward to lead. A hegemon will provide this public good both because open markets are in its economic interest and because it has the necessary power to persuade—or even to compel—others to cooperate. This paradigm suggests that markets would not have been open in the nineteenth century without British hegemony, that the global economic calamity of the 1930s was the inevitable consequence of a political vacuum, and that the peace and prosperity that followed World War II can be principally attributed to American leadership. It also implies that the actions of the hegemon are both self-serving and self-defeating: A leader must establish an open world market to reap the rewards of its own competitiveness, but the system that it fosters will create opportunities for its challengers. Just as the British-sponsored trade regime aided Germany, so too has China’s growth been enabled by the current system.¹ Much of the Trump administration’s policies may be seen as an attempt to correct for the policies of preceding administrations that, in the view of current officeholders, actively contributed to the challenger’s ascendance.

We may reasonably expect the state of relations between the United States and China to influence—and perhaps to determine—the evolution of the global trading system for decades to come. Size alone makes this obvious: these two countries jointly account for 21 percent of world exports, 23 percent of its imports, 23 percent of the global population, and 39 percent of the global economy.² More to the point, they also comprise 100 percent of the contenders for hegemony. And while it cannot be taken for granted that China will continue to grow as fast as it has in recent decades, or that the relative position of the United States will steadily and irreversibly fall behind, the trends are undeniable. They prompt leaders in these two countries, and in all others, to anticipate a changing global environment in which Beijing’s influence will rival or even surpass that of Washington.

The Impact of Relative US Decline on the Multilateral System

The last transfer of global leadership was deceptively easy. It was fortunate for the outgoing and incoming hegemons, and for the world, that London and Washington were on the same side in the most destructive war in history. The cousins worked closely during 1942–1947 to design the postwar global system, and devoted especially close attention to the trade component of that regime. It would be particularly ironic if it were the United States, and not China, that were to dismantle the remnants of that system—or at least require it to get on without the old leader. At the start of the Trump administration, it had appeared that there was a better-than-even chance that the United States would explicitly threaten to leave the WTO sometime in his tenure. That has not yet happened, but it is not difficult to imagine scenarios in which it may yet come to pass. One need look no further than the president’s immediate disavowal of the TPP, followed by withdrawals from other agreements on such diverse topics as climate change and Iranian nuclear weapons, to see Trump’s antipathy toward international cooperation. It should shock no one if the WTO were to join a list of jilted institutions that already includes the Human Rights Council, UNESCO, the Universal Postal Union, and the World Health Organization. And even while Trump has kept the United States in the WTO, he has rendered that membership virtually moot by pursuing policies that are antithetical to the spirit and the letter of this organization.

This is not to say that the abdication of US leadership is inevitable or permanent, or even that leadership by just one country is the only option. It is at least theoretically possible that the United States and China could become next Group of Two (G-2) that manages the multilateral trading system. The original G-2 of the immediate postwar era was strictly Anglo-American, but over the next few decades the European Union (and its predecessor bodies) took the British place. It long seemed that agreement between Washington and Brussels was both the necessary and sufficient condition for bringing any round of multilateral trade negotiations to a successful conclusion. Other countries frequently objected to a restricted, “green room” approach in which the major GATT decisions were made chiefly by the Quad (the G-2 plus Canada and Japan) plus a few other developed and developing countries, but the arrangement was undeniably productive. That all changed with the dawn of a new century, as became apparent at the failed WTO ministerial meetings of 1999 (which dissolved into chaos) and 2003 (where a transatlantic proposal epically failed to win over the rest of the WTO membership). Those episodes, especially the latter one, underlined the point that transatlantic concordance is no longer the sufficient condition for reaching multilateral deals. Some wonder if it will even be necessary in a new world order in which the post-Brexit European Union holds third place.

The decay of multilateralism may be traced in part to a diluted sense of a shared strategic purpose. WTO members are not divided by the old antagonisms of the Cold War, but neither are they united by them. The rising powers include some original GATT contracting parties that had already been influential in the old order, especially Brazil and India, as well as others that did not accede until after the WTO was established. In addition to China, the new entrants include Russia, Saudi Arabia, Taiwan, and Vietnam. Universality, diversity, and democracy come at a cost, as there is an inverse relationship between the number of decisionmakers in a system and the efficiency with which it can act. No objective observer could say that the nearly all-encompassing WTO has executed its legislative function as effectively as did the smaller, more cohesive GATT club. It did produce some results in the late 1990s, such as the Information Technology Agreement and several protocols on trade in services, but the launch of the new round in 2001 marked the start of an especially fruitless run. Modest accomplishments such as the Trade Facilitation Agreement are only a pale shadow of what the WTO members might achieve if they animated the Doha Round with as much ambition as its GATT-era predecessor.

How the Sino-American Rivalry Affects the Multilateral System

There are strong reasons to doubt that the same torch that London handed to Washington might be passed just as easily, and with the same effect, from Washington to Beijing. Even if the United States were willing to make the handoff, and China were prepared to exercise leadership in the multilateral system, the results might be quite different. The British and American versions of hegemony were at least rhetorically committed to the concept of a first among equals, and while both of the Anglo-American leaders were known to throw their weight around they typically favored persuasion over coercion. Future Chinese leaders may find inspiration in other, less inclusive and cooperative archetypes. The models in China’s own past, whether one looks to the imperial period or the second half of the twentieth century, suggest a preference for hierarchical relations and a readiness to exert authority. Much depends on whether China is truly committed to a global economy in which markets matter more than states, or instead prefers a quasi-imperial system with more top-down direction. There is plenty of contradictory evidence in a country that is at once home to the world’s largest Communist system, yet may soon host the world’s largest market.

In the near term, the more pressing issue is how China’s WTO membership alters the US perception of that institution and its willingness to make any new concessions—or even to respect the existing US commitments—on a most favored nation (MFN) basis. This situation is similar in one respect to how Congress approached MFN treatment early in the Cold War, when critics charged (however implausibly) that any tariff reductions made in the GATT might redound to the benefit of Moscow. That problem was easily solved in 1951, when legislators obliged the Truman administration to strip the Soviet bloc of its MFN privileges; this affected very little actual trade, and was uncomplicated by these countries’ GATT status (apart from the special case of Czechoslovakia). Now that China is a WTO member, and eschews the Soviet-style autarky that it had once emulated, no such easy solutions are available. The only ways to ensure that China does not benefit from any agreements reached in the WTO are to negotiate them on a strictly plurilateral basis (which China opposes), or to abstain from multilateral negotiations altogether. The United States appears to have pursued the second option, albeit in a purely informal and unacknowledged manner, for the better part of a decade. Even after Trump leaves office, there may be considerable reluctance in Washington to negotiate new liberalization on a nondiscriminatory and multilateral basis.

Unless the United States and China settle on some modus vivendi that permits them to move ahead together in the WTO, they are more likely to let that institution go slack while each concentrates instead on free trade agreements (FTAs) or other bilateral approaches. To the extent that the United States freezes its current levels of MFN treatment, and liberalizes its tariffs and other trade barriers only on a discriminatory basis, it will treat China and other countries outside its FTA circle as the least favored nations.

`THE CHALLENGE OF RESURGENT MERCANTILISM`

The economic nationalism that underpins the Trump administration’s policies is quite obvious, but should not be mistaken for mere protectionism. That narrow policy, which might most simply be defined as the imposition of border barriers to the entry of foreign goods and services so as to benefit domestic suppliers, can clearly be seen in both the rhetoric and the actions of this president. The true essence of this administration’s approach to trade and foreign policy, however, is more properly characterized as mercantilism. This entails not merely a commercial objective, but a full-fledged doctrine of statecraft that is founded on a specific view of the relationship between power and wealth.

The Reversion to Mercantilism

While classical mercantilism encompassed a mixed bag of thinkers and practitioners, its adherents nevertheless shared some fundamental assumptions about the nature of conflict and the proper aim of economic governance. The doctrine’s essentials can be reduced to a simple syllogism that is embraced just as enthusiastically in the new Washington of Donald Trump as it was in the old Versailles of Jean-Baptiste Colbert:

Major Premise: All political and economic relations are hierarchical dealings in which one either dominates or is subordinate. The state is the dominant domestic institution, and the stronger, richer states dominate weaker, poorer states.
Minor Premise: Power and wealth are inextricably linked, being both interchangeable and equal in importance. Each of these desiderata is zero-sum, such that any state’s gains in power and wealth necessarily come at the expense of other states.
Conclusion: Trade is an essential component in the power relations between states, and to that end the state should intervene to maximize exports (especially of finished goods), minimize imports (except for raw materials), and promote a positive trade balance.

The current reversion to mercantilism can be explained by both long-term international trends (especially the Law of Uneven Growth) and by the short-term political events within the United States. Where these two trends meet is in the process of Creative Destruction, a phenomenon that has been especially disruptive for labor-intensive US industries that face competitive challenges from lower-wage countries. Competition killed some of those firms, but the economy as a whole adjusted by becoming more services-intensive. The remaining manufacturers coped by outsourcing their inputs, moving operations off shore, or investing in labor-saving machinery. These adjustments worked well for many employers and policymakers, but not for all workers. Whatever job-shedding strategy management might favor, and politicians might facilitate, every option other than bankruptcy will always be more disruptive for labor than for capital. Some displaced hands can find work in more competitive industries, but many others suffer either declining wages or permanent joblessness. And while the rising trade deficit is not solely responsible for the secular decline in manufacturing, it is the cause most visible to the general public.

This economic transition was complemented by a political process in the 1980s and 1990s through which dying industries and displaced workers were temporarily placated by protectionist concessions, but by the turn of the century they had lost much of their influence in Washington. One reason why Donald Trump managed to secure the nomination of the supposedly protrade party, and then to win in the industrial states he needed to secure the presidency, was that he mobilized a reserve army of the formerly employed that other, more conventional politicians had long ago abandoned.³

One of the more notable aspects of the Trump administration’s priorities is a sharp focus on manufactures. This is all the more remarkable when one considers that virtually all of the president’s private successes have been in service sectors (especially real estate, entertainment, and the hospitality industry). That has not prevented Trump and others around him from treating steel, automobiles, and other heavy industries as somehow more “real” and masculine undertakings that are worthier of attention. The anomaly may be partly explained by political calculations, with policymakers always keeping an eye on the electoral map, but the administration also seems rooted in strongly nostalgic notions that find Creative Destruction easier to deny than to reverse. That sentiment takes concrete form in the revival of the trade-remedy and reciprocity laws.

The Revival of Trade-Remedy and Reciprocity Laws

When the administration turned in 2018 from rhetoric to action it did so primarily by resuscitating older trade laws that were largely forgotten but not yet gone. Trump began the year by resurrecting a long-dormant provision of the Trade Act of 1974 (section 201) when he granted global safeguards protection to producers of washing machines and solar panels. These cases represented the first US invocations of this statute, and its counterpart in international law, since the George W. Bush administration used it to protect steel in 2002. Trump followed up mid-year by reviving yet another disused provision of that 1974 law, invoking a “reciprocity” clause (section 301) that gives the president broad powers to define and enforce US rights. Trump used this law in a complaint against Chinese intellectual property policies, with the retaliatory measures that he imposed being the most precisely targeted shot in a spreading trade war. The Trump administration’s preferred instrument for protecting the steel and aluminum industries is an even older and more obscure trade law that is based on claims of national security. The White House announced in March that it would use the president’s authority under section 232 of the Trade Expansion Act of 1962 to restrict imports of these two metals from nearly all sources.

These were only the most high-profile manifestations of a broader trend in which the United States has returned to trade laws as a means of managing competition. The characteristics of these laws are summarized in table 3-1, and figure 3-1 shows their evolving use since 1975. Taking the long view, the frequency with which the Trump administration has used these instruments virtually matches what the United States did during the Uruguay Round (1986–1994). While there are some differences in the relative weight given to distinct laws, the overall rate of cases from 2017 through mid-2020 has been, at forty-two per year, nearly identical to the forty-four per year achieved during those multilateral trade negotiations. No mere statistical fluke, that replication of the old trend instead demonstrates an implicit foundation of this administration’s approach to trade policy: it is quite willing to accept the benefits that the United States garnered in those negotiations, but now balks at the costs. The principal benefits of the Uruguay Round, from the US perspective, were (1) the inclusion of new issues (especially intellectual property rights) within the scope of trade policy and (2) the adoption of new rules requiring that developing countries bear a bit more of the system’s burdens. The principal cost, from a Trumpian worldview, came in the constraints that the revamped legal regime imposed on US unilateralism. An administration that is not willing even to accept the core GATT obligation that a country not raise its tariffs above their “bound” rates (i.e., the legal maxima) will be doubly reluctant to abide by WTO norms and rules that inhibit its conduct of trade warfare.

TABLE 3-1. The Principal US Trade-Remedy Laws

`Listed in order of political discretion`
Law	Purpose and process	How affected by Trump
Antidumping Duties (§731, Trade Act of 1930)	If the ITA finds that imports are dumped (i.e., sold at less than fair value), and the USITC finds that they cause or threaten material injury to US industries, the products are subject to duties equal to the dumping rate	In a potentially precedential action, the Department of Commerce self-initiated a case in 2017 against common alloy aluminum sheet imported from China.
Countervailing Duties (§701, Tariff Act of 1930)	If the ITA finds that imports benefit from prohibited subsidies, and the USITC finds that they cause or threaten material injury to a US industry, the products are subject to duties equal to the subsidy rate.	The Department of Commerce complemented the self-initiated antidumping case against Chinese aluminum with a countervailing duty case against the same product.
Global Safeguards (§201, Trade Act of 1974)	The USITC can recommend to the president that duties, quotas, or other remedies be granted to aid an industry that is found to suffer serious injury from increasing imports.	The administration revived this dormant law when in 2018 it granted petitioners’ requests for protection against imports of washing machines and solar panels.
National Security Clause (§232, Trade Expansion Act of 1962)	The secretaries of commerce and defense can recommend that limits be imposed on imports that impair national security (e.g., by suppressing US production of strategic goods).	The administration invoked this rarely employed statute to impose restrictions on steel and aluminum, and threatens to do the same for automotive imports.
Unfair Trade Practices (§337, Tariff Act of 1930)	If the USITC finds that imports violate patents, trademarks, or copyrights, or are otherwise unfairly traded, it can issue a cease-and-desist order and/or exclude these products from the US market.	No change in policy; this is a technical statute administered entirely by the USITC.
Market Disruption by Communist Countries (§406, Trade Act of 1974)	The USITC can recommend to the president that duties, quotas, or other remedies be pursued to aid an industry that is found to suffer serious injury from increasing imports from a nonmarket economy.	No change in policy; this law has not been invoked since 1993.
Agricultural Imports (§22, Agricultural Adjustment Act of 1933)	The USITC can recommend that the president impose duties or quotas on imports that threaten to interfere with farm price-support programs.	No change in policy; this law has not been invoked since 1994.
Notes: ITA = International Trade Administration of the US Department of Commerce; USITC = US International Trade Commission.

This point can best be appreciated by the aforementioned revival of trade laws that had once been prominent elements in US trade policy, but were subject to grand bargains in the Uruguay Round. That round did little to constrain use of the antidumping (AD) and countervailing duty (CVD) statutes, which are arguably the most protectionist trade laws in practice but the least provocative in principle. By contrast, when the administration raised three other statutes from the dead it sparked serious concerns over America’s commitment to the multilateral system. The Trump administration’s readiness to employ the safeguard and reciprocity laws implies that it is not just prepared to ignore WTO norms and rules, but is actually eager to flout them; those concerns are even more severe in the case of section 232. Recent trends in the use of each law merit attention.

Sources: Compiled from US International Trade Commission documents, “Import Injury Investigations Case Statistics (FY1980–2008),” https://www.usitc.gov/trade_remedy/documents/historical_case_stats.pdf; “Import Injury Investigations,” https://usitc.gov/trade_remedy/731_ad_701_cvd/investigations.htm; USTR at https://ustr.gov/archive/assets/Trade_Agreements/Monitoring_Enforcement/asset_upload_file985_6885.pdf; and US Department of Commerce, https://www.bis.doc.gov/index.php/forms-documents/section-232-investigations/86-section-232-booklet/file.

Note: Antidumping and countervailing duty cases are based on products rather than partners (e.g., if petitions affecting the same product are simultaneously filed against three countries, that is counted as one petition rather than three).

The AD statute is the oldest and most frequently used of the trade-remedy laws. Dumping is an unfair trade practice by which imported goods are sold at less than fair value, which may be below the cost of production, the price in the exporting country, or the price in third-country markets. The CVD law shares much in common with its AD counterpart, and cases under these twin laws are often prosecuted in tandem. The most important difference is that CVD investigations are based on allegations of government subsidies rather than the pricing practices of firms. Petitioners used to resort less frequently to the CVD law than to its AD counterpart, but that changed after nonmarket economies such as China lost their legal immunity to CVD cases in 2007.⁴ The pace of AD/CVD filing picked up sharply in the first year of the Trump administration, which also saw the government’s first self-initiation of cases since the Reagan administration. The pace of filings under these laws was somewhat slower in 2018–2019 than it had been in 2017, perhaps because prospective petitioners thought it might be less costly to rely on the administration’s use of other statutes (especially section 232) than to foot the considerable expense of filing their own AD and CVD claims. It is also possible that protectionist industries hoped to see the Trump administration more aggressively use its authority to self-initiate AD/CVD cases. That did not happen, which may be one reason why the rate of filings in the first half of 2020 exceeded even the rapid pace set in 2017.

While the AD and CVD laws are treated as quasi-judicial statutes that are theoretically not subject to policymakers’ whims, decisions to invoke the safeguards law are explicitly a matter of policy. The global safeguards law is a mechanism that allows domestic industries to petition for relief when import competition causes injury, even if those imports are fairly traded. The safeguard law requires that the US International Trade Commission (USITC) determine whether increasing imports are a substantial cause of serious injury to the domestic industry. If its injury determination is positive, the commission will recommend a remedy (e.g., quotas or tariffs). The president then has wide discretion to accept, reject, or modify the commission’s recommendations. In actual practice, these tests are significant hurdles that many petitioners fail to clear. That is the chief reason why the number of petitions filed during 1986–1994 (far fewer than one per year) was so much lower than in the first decade after enactment of the Trade Act of 1974 (more than five per year). The action under this law dropped still further after the WTO came into effect. Although that institution’s Safeguard Agreement sought merely to reform this mechanism, and not to outlaw it, an unbroken series of dispute-settlement cases invariably found that the countries employing safeguards had violated their obligations. Ever since the Bush administration was required in 2003 to reverse the steel restrictions that it had imposed in 2002, Washington treated section 201 as a dead letter.

That all changed when producers of washing machines and solar panels filed safeguard petitions in 2017, leading the Trump administration to impose import restrictions in 2018. Both orders are now subject to challenges in the WTO’s Dispute Settlement Body, and although the complaints have been slow-walked through the process—perhaps quite deliberately so—we may reliably anticipate that these safeguard actions will eventually be found to violate WTO obligations. Should this happen while Trump remains in office, it could set up a potentially hazardous confrontation. Past administrations have felt legally obliged to lift the restrictions they imposed under the safeguards law, but Trump seems far less intent on trimming his policies to meet the terms of international agreements and the rulings of dispute-settlement panels. In the event that the United States fails to remove protections that are found to contravene the rules of the Safeguard Agreement, it will only reinforce the already strong impression that US policymakers no longer respect their obligations in the WTO.

The revival of the reciprocity law raises that same concern. Generations of American policymakers have used the term “reciprocity” to mean a policy in which objectives are pursued by threatening or imposing sanctions unilaterally rather than either negotiating mutually beneficial agreements or bringing the disputes to a neutral court. Laws of this sort have been around since the first decades of independence, and have been of recurring importance throughout US history, but were rarely invoked in the first generation of hegemony. The principal exception to this rule was the Chicken War that the United States fought with the European Community in the 1960s. Following a revamping of the law in 1974, the section 301 authority became a major element in US trade policy. The Reagan administration was especially enamored of this law, using the threat of retaliation in order to advance its objectives on what were then called the “new issues” (i.e., services, intellectual property rights, and investment). Congress encouraged this move by enacting an entire family of related laws. Several of them were included in the Omnibus Trade and Competitiveness Act of 1988, such as one that focuses on countries’ intellectual property practices (known as “Special 301”) and others dealing with such diverse subjects as government procurement, telecommunications trade, and foreign shipping practices.

The reciprocity laws returned to their former obscurity after the Uruguay Round. In the grandest of all that round’s grand bargains, the United States tacitly agreed to sheath its reciprocity sword in exchange for other countries’ agreement to accept disciplines on the new issues. Even if the US negotiators were not fully satisfied with the terms of the agreements on intellectual property rights and investment measures, and the General Agreement on Trade in Services did more to establish the architecture of liberalization than to reduce actual barriers, the United States had achieved its principal objective: the round enlarged the scope of trade disciplines to cover topics of high interest to an increasingly post-industrial economy. The agreements on these issues were to be adjudicated not unilaterally by the United States, but instead in a stronger dispute-settlement system that differed from its GATT predecessor in several respects. The new trade court does not allow any country to block a case by abusing the rule of consensus, it covers the full range of WTO agreements with a unified system, and was—at least until the United States began opposing new appointments—backed by an Appellate Body that provides greater consistency to the interpretation of the rules. For all of its shortcomings, the overall balance of concessions in the Uruguay Round leaned far more toward what the United States demanded than what many of its negotiating partners hoped to concede. That distinction seemed lost on the Trump administration when, as discussed later in this chapter, it decided to pursue its complaints against Chinese intellectual property rights violations through domestic rather than international law. It was as if the Uruguay Round never happened.

The Abuse of the GATT National Security Provision

The section 232 cases pose an even graver danger to the trading system than the Trump administration’s revival of the safeguard and reciprocity laws. Beyond the direct presidential imprimatur that these national security cases bear, and the presumably greater implied resistance to an unfavorable ruling in the WTO dispute-settlement system, some of the products involved are inherently important. And even more than the aforementioned safeguard and reciprocity cases, Trump’s invocation of national security for nakedly protectionist purposes meant deliberately violating a taboo. Before his time, American presidents were careful to ensure that they resorted to section 232 and its counterpart in international law (GATT Article XXI) only in extremis, employing the law almost exclusively as an instrument of energy security.⁵

That all ended in 2017, when one of the first acts of the Trump administration was to self-initiate section 232 investigations against steel and aluminum. That was only the beginning, with the administration also launching an investigation in 2018 against automobiles and automotive parts. That case has thus far remained more an instrument of leverage than protection, with the White House threatening to pull the trigger on car tariffs whenever it wants to step up pressure in any dispute with Canada, the European Union, or Japan. The Trump administration also received (but ultimately denied) petitions from producers of uranium and titanium sponge, and initiated cases in 2020 involving vanadium, electrical transformers, and mobile cranes. Having pursued eight cases in just three and a half years, this administration has resorted to section 232 five times more frequently than did the administrations of Ford through Obama (i.e., eighteen cases from 1975 through 2016).

As can be appreciated from the data in table 3-2, it was absurd for the administration to base its most protectionist actions to date on spurious claims of national security. More than two-thirds of US automotive imports, and well over half of steel and aluminum imports, come either from NATO countries or other partners that past presidents have formally designated as major non-NATO allies. Uranium was the only item subject to an early section 232 investigation for which a potential adversary (Russia) was a major supplier, and also the only one for which an appeal to national security seemed plausible, and yet it was the sole item in the section 232 docket of 2017–2018 for which the administration showed little enthusiasm.

This indiscriminate use of the national security law, and the implied willingness to abuse the corresponding exceptions clause in the WTO, may pose a greater threat to the multilateral trading system than any other aspect of Trump’s trade policy. The danger arises in the administration’s willingness to exploit WTO rules that are far more deferential toward claims of national security than they are toward other concerns that collide with trade. Any country that seeks to justify its otherwise trade-restricting measures under the general exceptions clause (GATT Article XX) faces a series of legal hurdles that very few manage to clear, but those same tests were not applied to invocations of GATT Article XXI. In the first seven decades of GATT and WTO history, no country invoking the national security exception of GATT Article XXI had ever been obliged to justify its claim before a dispute-settlement panel. The near-automatic acceptance of invocations was correctly seen as a politically necessary norm, founded on the recognition that countries might prefer to leave the system altogether if the actions they take in pursuit of national security were subject to review by trade lawyers.

What is most remarkable about Article XXI is not the abuse that this virtual get-out-of-jail-free card might seem to invite, but the infrequency with which countries succumbed to the temptation—at least until now. Before the advent of Donald Trump, there were just three occasions in which the United States either explicitly invoked Article XXI or publicly implied that it was prepared to do so; all three involved countries that had affiliated with the Soviet Union only after joining the GATT.⁶ Just a handful of other WTO members have availed themselves of the security exception. The European Union did so twice during the GATT period,⁷ and developing countries repaired to this article a few times.⁸ That leaves a single pre-2017 case in which a country’s invocation was unambiguously abusive. This came in 1975, when Sweden imposed restrictions on footwear. Stockholm justified this measure by claiming that the country needed a viable industry to produce boots for its soldiers. The trade community shamed Sweden into removing the offending measures within two years, but did so without formally demanding a legal justification for its action.

This is just one of many ways in which the norms of the WTO are drifting away from those of the GATT. That may be a natural consequence of an expanding membership, with some of the newer entrants having less familiarity and commitment to the long-established traditions of this institution. That was apparent in two other sets of disputes that arose in 2017. Bahrain invoked Article XXI to justify actions that it took—together with Egypt, Saudi Arabia, and the United Arab Emirates—in a conflict with Qatar. Russia likewise invoked the article in one of a series of disputes with Ukraine.

Two aspects of that Russia-Ukraine dispute are especially significant. One was the full-throated support that Moscow received from Washington when it invoked this legal loophole, with both countries claiming that matters of national security should not be judiciable in a trade court.⁹ The other was that the dispute-settlement panel disagreed with both countries on this matter of principle, even while determining that Russia’s invocation was justified as a matter of practice. Tossing aside decades of reticence, with all earlier panels concluding that trade lawyers had no business judging national security decisions, this one opened a door that might eventually lead to places that no friend of the system should want to go. It is not difficult to imagine future cases in which panels may incur a member’s wrath by second-guessing its sovereign right to define its own national security needs, even if that member abused the privilege in the first place. Hence the threat posed by the Trump administration’s own resort to the national security argument: while it has clearly exploited the system by making security claims that do not come close to passing the smell test, the greater danger may lie in how panels respond. We may only speculate on the depth of the administration’s motives. Its decision to pursue these cases may have been nothing but a cynical attempt to game the system by taking advantage of symmetrical weaknesses in domestic law (section 232 being the most discretionary of the trade-remedy laws) and the WTO (Article XXI being the most discretionary of the exceptions clauses). A more devious mind might perceive in this maneuver a deliberate incitement. Yet even if the Trump administration acted in these cases as an agent provocateur, daring the system to give it a plausible pretext for departing the WTO, it does not necessarily follow that a panel ought to take the bait.

In the normal course of events, we might expect the disputes over the steel and aluminum restrictions to have come to a head by the time of this writing (July 2020). The Trump administration imposed those section 232 measures in March 2018, and over the ensuing months many WTO members brought formal dispute-settlement complaints. It took several more months for the WTO to form a panel to hear these cases. If the dispute-settlement system operated as intended, we might anticipate the panel that was formed at the start of 2019 to have issued a ruling by early 2020. Like the panels in the safeguard cases, however, its work has already gone well past a year. It is clearly in the best interests of the system to run out the clock, and then some, insofar as the panel faces the true definition of a dilemma: a choice between two undesirable outcomes. If it were to side with the complainants, especially in the heat of a US presidential election, the panel would stage a made-for-television opportunity for Trump to storm out of an international organization that (he would claim) does not respect the national security of a sovereign state. If the panel were instead to allow the US restrictions to stand, it would not only ratify this gross abuse but invite other members to ape it. Given the choice, it may be the better part of valor for the system to exercise its discretion and postpone action until 2021.

Concentration on China and Collateral Damage on Third Parties

The resurrection of the old reciprocity law is yet another area where the Trump administration revisited what seemed to have been a settled matter of law and policy. The United States appeared to have discontinued its use of section 301 in 1997, but exactly twenty years later the Office of the US Trade Representative (USTR) initiated an investigation under this law into Chinese acts, policies, and practices related to technology transfer, intellectual property, and innovation. The announcement of this section 301 case made no mention of the relevant WTO agreement or the rationale by which the USTR decided not to bring the matter to the multilateral system. It instead implied that, in a throwback to pre–Uruguay Round practices, the United States would define and enforce its rights via domestic law rather than international institutions. That was the clear implication of the sequence by which the retaliatory measures announced in 2018 preceded, rather than followed, the initiation of a formal US complaint in the WTO.

Predictably, retaliation against China was quickly followed by Chinese counterretaliation against US exports. There then ensued a lengthy series of tit-for-tat restrictions, together with numerous attempts by the Trump administration to limit the damage that the US import restrictions might wreak on domestic producers and consumers and that Chinese import restrictions might impose on US farmers. While the conflict remains a live issue as of this writing, Beijing has clearly demonstrated that it is just as capable as Washington of engaging in trade warfare and sustaining its economic costs. The most consequential outcome of the dispute may not be which side is ultimately deemed the winner or the loser, or how much damage they do to one another and to third parties in the interim, but the extent to which they are each prepared—and perhaps even eager—to reach a settlement that amounts to managed trade. The willingness that both presidents and their subordinates have shown to reach an out-of-court barter arrangement, with China pledging to purchase specified values of US goods, does not portend well for the trading system. If the Trump administration has its way, trade flows between the world’s two largest economies may be determined as much by power politics as they are by market forces. That would be a retrogression of epic proportions.

The section 301 case is emblematic of a trend whereby the United States now has a two-speed approach to the conduct of trade disputes, reserving the higher gear for China. This can be appreciated from the data in figure 3-2, which summarizes the shares of the main policy instruments that are directed at China. The surge in AD cases can be attributed not just to the rising share of US imports originating in China, but to special rules. China is subject to the unique methodology employed for nonmarket economies (NMEs), in which price comparisons are made not against the exporting country but instead against a market-oriented “surrogate” country (typically India). This makes it much easier for petitioners to show high rates of dumping. It is thus more attractive for petitioners to bring cases against China and Vietnam than any other country. The concentration of trade-remedy laws on China was further abetted by a decision in which the country lost its earlier exemption from CVD investigations. The Department of Commerce had previously read the law to mean that NMEs were immune from CVD investigations, based on the theory that it is impossible to isolate and assess the impact of subsidies in an economy that amounts to one big subsidy. The department reversed this doctrine in 2007, and in 2012 Congress approved legislation that reinforced this interpretation. This is one reason why, as previously seen in figure 3-1, the relative frequency of CVD cases has lately increased more rapidly than filings under the AD law.

Sources: Antidumping and countervailing duty petitions calculated from World Bank data, http://data.worldbank.org/data-catalog/temporary-trade-barriers-database and US International Trade Commission data, http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/completed/index.htm. WTO complaints calculated from WTO data, http://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm. Tariff data calculated from USITC DataWeb data at http://dataweb.usitc.gov/scripts/INTRO.asp.

^a Countervailing duty (CVD) petitions against China were not legally possible before a revised interpretation of the law in 2007.

^b Dispute settlement complaints in either direction were not legally possible before China’s WTO accession in 2001.

^c Shares of antidumping (AD) and CVD petitions calculated on the basis of total countries and products named in petitions. For example, if in a given year there is one AD petition filed against imports of product X from China and one other country, plus another AD petition filed against imports of product Y from only one other country, China accounts for 33.3 percent of all AD petitions.

It is interesting to note that while the concentration of trade instruments on China increased from the second Clinton through the first Obama term, it then tapered off in the second Obama term. That period saw a decline in the shares of AD and CVD cases that targeted China, as well as the percentage of WTO disputes brought by Washington against Beijing (and vice versa). The preliminary data suggest that this declining trend was only partially arrested under Trump, with the Chinese shares of AD and CVD cases in this administration closely resembling those of the second Obama term. Interpreting the data on disputes in the WTO is somewhat more complicated, as that depends on just how complex a game the Trump administration may be playing.

WTO dispute settlement is one area where the Trump administration has thus far shown little inclination to take full advantage of the opportunities to bring maximum pressure on China. This is a departure from the recent past. During the Obama administration, when the United States brought six cases against China, Beijing responded with just one complaint against the United States. Those numbers have been reversed in the Trump administration, with China bringing six complaints against the United States from 2017 through mid-2020 but being targeted by just two US complaints. The one trend that has continued almost unbroken across six presidential terms is the rising share of tariffs that are collected on imports from China. This rose from just 18 percent in the second Clinton term to 55 percent under Trump. That increase can be attributed not just to China’s growing share of total imports, and the penalty tariffs that the Trump administration has imposed, but also to the spreading number of FTAs that give other partners duty-free access to the US market. It is to that discrimination that we now turn.

`THE CHALLENGE OF DISCRIMINATION`

One systemic challenge that predates the election of Donald Trump concerns the rise of discriminatory trade agreements. The creation of the WTO in 1995, which culminated a half-century of progress toward a comprehensive and multilateral trade regime, ironically came just when many of its most prominent members began negotiating discriminatory agreements in earnest. As an ideal, the trading system has long sought to achieve two seemingly complementary objectives: the reduction or elimination of trade barriers and an end to discrimination. The recent proliferation of FTAs implies that countries are willing to sacrifice nondiscrimination in pursuit of liberalization. The net results have been dubious, as the political capital that countries invest in FTAs might otherwise have been devoted to preserving and rebuilding the multilateral system.¹⁰ By the time that Trump took office, many trade policymakers had already come to see FTAs not as a complement to but as a substitute for multilateralism. To that burden must also be added the rising proclivity of the United States and China to treat their FTAs with third parties as another front in their widening trade war.

As can be seen from the data in figure 3-3, the FTAs of the United States have come in three waves. The initial wave began when the United States struck its first FTA with Israel in 1985, followed by agreements with Canada and Mexico a few years later.¹¹ The pacts with the latter two partners mattered not just for the magnitude of the trade involved, but also (as discussed below) for the opportunity to set precedents on new issues. The second wave came from 2001 through 2012; while a few of the agreements during this period were initiated in the closing weeks of the Clinton administration, and others were not approved until early in the Obama administration, most of the action came during the administration of George W. Bush. This wave covered many more countries than had the first, but affected much less actual trade; several of these partners were chosen more for reasons of foreign policy than trade per se. The FTAs in this wave encompassed several countries in Latin America, as well as other partners in the Middle East and the Pacific Basin.

Source: Calculated from US International Trade Commission data at https://dataweb.usitc.gov/.

First Wave Partners: Canada, Israel, and Mexico

Second Wave Partners: Australia, Bahrain, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Korea, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore

Third Wave Partners: European Union, Japan, Kenya, and the United Kingdom

What is most notable about the first two waves is that they each honored an unspoken rule that long constrained the principal leaders in the multilateral system. That rule held that while the European Union, Japan, and the United States might negotiate agreements with small and mid-sized trading partners, they would deal with one another primarily in the GATT and (since 1995) the WTO. That rule has now been negated by a third wave of negotiations that began during the Obama administration, which initiated FTA negotiations with both the European Union and Japan (the latter as part of the TPP). As critical as Trump has been of his immediate predecessor, including withdrawal of the United States from the TPP, it did not take long for him to replicate those plans. His administration’s FTA negotiations with major partners are nonetheless configured differently, being disaggregated in two ways: Brexit has led to separate negotiations with the European Union and the United Kingdom, and the Trump FTA negotiations with Japan are bilateral rather than megaregional.

The third wave of FTAs poses a much more serious challenge to the multilateral trading system than did either of its predecessors. This is partly due to a matter of size, as the new agreements push FTAs from being the exception to the rule. The data illustrated in figure 3-3 show that as of 2000, when only the first-wave FTAs were in effect, these agreements still covered less than one-third (31.3 percent) of all US goods imports. Those three partners’ collective share of US imports declined slightly in the years that followed, and most of the FTA partners in the second wave (apart from Korea) were relatively small. The net effect was that by 2016, when all of the second-wave agreements were in force, FTA partners still accounted for just 35.5 percent of all imports. The new negotiations with major Atlantic and Pacific partners cover far larger shares. If all of the third-wave negotiations produce agreements, the FTAs will govern 62.5 percent of US imports (as measured in 2019). We may well wonder just how important future policymakers—whether they work for a president named Trump or Biden—will consider the WTO when well over half of their country’s trade is conducted with FTA partners, and the combined value from all other countries (19.2 percent) is just a smidgen larger than what comes from China (18.2 percent).

The problem may only worsen if, as may well be expected, more partners ask to jump onto the bilateral bandwagon. There are just six countries other than China that (1) do not yet have FTAs with the United States, (2) are not currently negotiating such an agreement, and (3) account for more than 1 percent each of US imports. Three of them have already been parties to earlier US FTA negotiations that failed either bilaterally (i.e., Thailand) or regionally (i.e., Malaysia and Vietnam were in the TPP talks), and all of the rest are frequently mentioned as potential FTA candidates (i.e., India, Switzerland, and Taiwan). It would be entirely unsurprising if any or all of those countries, and perhaps a few others as well, were to engage in FTA negotiations with the United States in the years to come. That would not be good news either for the multilateral system as a whole or for the dozens of other, smaller partners who would be left behind. The dilemma for these smaller countries will only be exacerbated if, as is discussed in a later section, the United States maintains the implicit Trump policy of treating FTAs not merely as substitutes for multilateralism but indeed as exclusive blocs.

The latest wave of FTAs challenge the multilateral system not just in quantitative terms, but also in their qualitative intent. The first wave was explicitly intended to complement the multilateral system, with the Reagan administration using its North American negotiations as a means of advancing new issues both at the start of the Uruguay Round (which coincided with the launch of the US-Canada FTA negotiations) and at the conclusion (which followed shortly after the NAFTA negotiations ended). Even during the second wave, policymakers still denied that discrimination was incompatible with multilateralism. They instead subscribed to a theory of “competitive liberalization” by which bilateral negotiations were intended to promote greater ambition at the regional level, which was in turn expected to prod multilateral negotiations. Those hopes diminished as the new millennium progressed, however, when megaregional and multilateral negotiations proved less politically viable than bilateralism.

Even before the TPP and TTIP negotiations began, megaregionals had already proven to be fragile. The abortive Free Trade Area of the Americas (FTAA) and the pact planned in the Asia Pacific Economic Cooperation (APEC) forum were both launched in 1994 to establish free trade across wide geographic expanses, yet both were undone by internal disputes. The APEC initiative began to crumble when countries demanded that their “sacred cows” (e.g., fish in Japan) be isolated from liberalization, and the exceptions soon grew so large as to make the rule seem unworthy of pursuit. The FTAA negotiations were plagued from the start by the perennial rivalry between the United States and Brazil, and matters only got worse with the emergence of a trade-skeptical bloc led by Cuba on the outside and by Venezuela on the inside. Each of these megaregionals then fragmented into smaller initiatives, including numerous US FTAs reached during 2003–2006, several of which coalesced in the TPP. Every TPP country had previously been engaged in negotiating the FTAA, APEC, or both, and many of them reached bilateral agreements with one another between the collapse of those talks and the launch of the TPP. It all proved moot in the end.

While some megaregional negotiations collapse at the international level, others can fail to survive the domestic political process. Donald Trump proved that immediately after taking office, when he signed a memorandum directing the USTR to withdraw the United States from the TPP and to negotiate bilateral agreements instead. The eleven other TPP countries eventually decided to implement this agreement without its largest signatory. The new president also let the TTIP negotiations lapse, having inherited a draft that was far from complete.

The Trump Administration’s Renegotiation of Existing Trade Agreements

The new administration spent the better part of 2017 and 2018 renegotiating a decades-old agreement with its Canadian and Mexican partners. These talks produced an agreement in principle at the end of September 2018, which Donald Trump dubbed the United States-Mexico-Canada Agreement (USMCA), and the neighbors signed the agreement three months later. The revised agreement entered into effect on July 1, 2020. Three aspects of the revised NAFTA merit attention. One of them, as reviewed in the next section, is a pledge that the United States extracted from Canada and Mexico concerning future negotiations with China. The conduct of these talks also marked a fundamental change in how the United States engages with its FTA partners, and its actual terms mark a subtler shift in the intended purpose of trade agreements.

The NAFTA renegotiation set a new pattern in the conduct of US commercial diplomacy, with the US side relying more than ever before on coercive tactics. While American negotiators in past generations were prepared to exploit obvious disparities in power and wealth, they typically approached these asymmetries with some tact. They would put forward tough demands, and make clear that they were prepared to walk if the other side did not bend, but the only way that they would threaten the imposition of new barriers in the midst of a negotiation was to suggest the willingness of Congress to go down that road. The Trump administration’s negotiators sidestepped that usual ruse, preferring to act as both the good and the bad cop. They treated the North American partners no better than any others, were restricting steel and aluminum under the section 232 law, and repeatedly warned that similar restrictions on automobiles could be imminent. The Trump administration also threatened on numerous occasions to abrogate NAFTA unilaterally, or to reach a separate peace with one or the other neighbor. The Canadian and Mexican negotiators responded with counterretaliatory measures, at least for a time, but ultimately felt compelled to strike a bargain.

The more serious danger lies in the changing purpose of trade agreements, with the US aim having shifted from the creation of opportunities to the management of outcomes. Instead of setting the terms by which countries will reduce barriers to trade and investment, then allowing the market to sort it all out, the Trump administration explicitly adopted the mercantilist goal of seeking to run up a trade surplus. It hopes to achieve that end through such means as the manipulation of the agreement’s rules of origin. The more restrictive automotive rules in the USMCA, for example, represent a reversion to the market-sharing principles that motivated the US-Canada Auto Pact of 1965. The Trump administration’s efforts to determine outcomes can likewise be seen in the concessions it wrung from Canada on dairy products, and also in the way that it made the NAFTA renegotiation an instrument in its rivalry with China.

FTAs as Instruments of Sino-American Rivalry

Direct negotiations between Beijing and Washington have thus far been limited to truce talks in the trade war, with both sides being readier to steer the dispute into a collusive system of managed trade than to negotiate a truly liberalizing agreement. With a bona fide FTA being off the table, the United States and China have instead used trade agreements with third countries as an instrument of power. That point rests on two distinguishing characteristics: China and the United States typically account for large shares of any given partner’s total trade, and yet each of them is less dependent on that exchange—globally and bilaterally—than are their partners. The United States is even less trade-dependent than China, with exports of goods and services being equal to just 12 percent of US GDP in 2018; exports then accounted for 19 percent of Chinese GDP.¹² Both were still below the world average of 30 percent. As for their relative weight in other countries’ economies, China has been overtaking the United States in much of the world. Even among the many countries for which China has moved into the top spot, however, the United States often remains the second largest partner.

Trump initiated four FTA negotiations from 2018 to 2020, choosing many of the same partners that his predecessors had. The negotiations that his administration initiated with Japan in 2018 amounted to a second stab at the most important part of the TPP, just as the talks initiated that same year with the European Union and the United Kingdom sought to complete a piece of unfinished business from the Obama administration. The proposed agreement with Kenya is the only FTA negotiation of the Trump administration that does not reflect an effort to pick up where its immediate predecessor left off, but even this undertaking can be seen as the continuation of a well-established pattern in US trade relations with developing countries. As far back as the NAFTA negotiations with Mexico, followed by a series of later FTA negotiations in Central America and the Andes, the United States has often told the recipients of autonomous trade preferences that they ought to transform those special (and temporary) arrangements into permanent, reciprocal deals before the authorizations for these programs expire.

The most important difference between past and present FTA negotiations instead comes in Trump’s insistence that they be exclusive. If his administration has its way, the world might well be headed towards a system where all commercially significant countries feel pressured to align themselves with one or another of the contenders for hegemony. As can be seen from the data in table 3-3, the Chinese and American FTA networks already encompass distinct sets of partners that nonetheless have similar collective sizes: The twenty FTA partners of the United States together account for 9.8 percent of global GDP, compared to the 9.6 percent controlled by China’s twenty-four FTA partners. If both countries conclude and implement all of the agreements that are now being negotiated or contemplated, however, the United States will be well ahead of China. When one adds the share of global GDP controlled by the United States (24.2 percent) to the share held by its existing (first- and second-wave) partners, plus the 26.8 percent held by the countries with which it is now negotiating, the resulting bloc accounts for 60.8 percent of the world economy. While the FTAs that might ultimately comprise the Chinese bloc are larger in number, they will still account for a considerably smaller share of the global economy (37.4 percent).¹³ From a multilateral perspective, the most important point here concerns just how little overlap one finds between these two blocs: The six countries that currently have FTAs with both the United States and China amount to just 4.5 percent of the world economy, although that share will grow to 13.7 percent if all of the negotiations that are now underway or under study come to fruition. This means that while Washington (and probably Beijing as well) may come to manage trade relations primarily through discriminatory channels, the rules thus established will affect only a slice of the world economy. This is precisely the sort of fragmentation that the architects of the GATT system sought to abolish.

Trump is not the first president to craft his FTA strategy with an eye to China, as this has been a mainstay of US policy for over a decade. The TPP was founded on two successive presidents’ goal of strengthening ties with partners in the Pacific Basin so as to compete effectively with China. There was no difference on this point between George W. Bush and Barack Obama, each of whom implicitly rejected the approach taken earlier by Bill Clinton. Whereas China had been a party to the ill-fated APEC negotiations launched on Clinton’s watch in 1994, Beijing was quite deliberately excluded from the TPP that Bush began and Obama expanded. That did not prevent China from dealing with the other TPP countries one by one. By the time that those regional talks ended in 2015, the United States and its North American neighbors were the only TPP signatories that did not either have FTAs with China or were actively pursuing them.

The Trump administration does not seem content merely to compete with China for FTA partners, but actively discourages others from getting closer to Beijing. That was made evident in Article 32.10 of the revised NAFTA that it concluded in 2018. This provision requires that any party (read: Canada or Mexico) must inform the others (read: the United States) at least three months before commencing negotiations for an FTA with a nonmarket country (read: China). It further provides that if any party were to enter into such an agreement, that step would “allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement).” The US negotiators thus obliged their Canadian and Mexican counterparts to choose sides. That principle bears a disquieting resemblance to the logic by which Vladimir Putin saw Ukraine’s 2014 trade agreement with the European Union as a provocation, and insisted that this former Soviet republic renew its fealty to Moscow. That demand ultimately precipitated not just the (temporary) rejection of the EU-Ukraine agreement but also turmoil inside Ukraine and Russia’s annexation of Crimea. This analogy should not be drawn too far; had Canada spurned the US demand for commercial monogamy, the United States would not have responded by seizing Canadian real estate. The provision nonetheless underlines the profound changes that the Trump administration hopes to have brought to the global trading system.

How Transatlantic Trade Agreements Affect the International System

Beyond the revision of existing FTAs, the Trump administration also aims to reach new bilateral agreements that conform more closely to its illiberal predilections. The first clean sheets of paper with which it will start—or the third wave, as described above—are agreements with the European Union, Japan, and the United Kingdom. After announcing its plans for these FTA negotiations in late 2018, the United States also launched talks with Kenya in 2020 for a bilateral FTA. As of mid-2020, none of these negotiations appeared to be anywhere close to entering their end-games.

There are competing views on the implications that the planned pair of transatlantic FTAs may hold for the international trading system. One suggests that regional trade arrangements in general, and especially negotiations between the most influential countries, act to undermine the existing system. It could be argued that when the United States and the European Union launched the TTIP negotiations in 2013 they were walking away from multilateralism and nondiscrimination. An alternative view suggests that the proposed successors to the failed TTIP could instead contribute to the revitalization of the trading system by restoring lost momentum and setting precedents to be taken up in subsequent agreements, including those that the European Union and the United States may negotiate with third parties. These initiatives offer a chance not only to deepen the commitments made on the new issues, but to pick up where TTIP left off on other groundbreaking topics (e.g., state-owned enterprises).

There is considerable history to support that latter view, with FTAs having offered a means for the largest economies to deal with the topics that some WTO members resist. The sequence here can go either of two ways. In one variant, the demandeur on a new issue may use smaller agreements as a policy laboratory, demonstrating to other members how the issue might be handled if it were later taken up multilaterally. In another variation, the demandeur that has been rebuffed in its efforts to bring up an issue at the multilateral level may repair instead to bilateral and regional negotiations. The first of these sequences is best demonstrated by the approach that the United States took in the 1980s toward what were then called the “new issues” of services, investment, and intellectual property rights. The precedents set by the agreements that the United States reached with its immediate neighbors, first with Canada (1988) and then with both Canada and Mexico (1992), provided a demonstration effect for the new issues that were simultaneously under negotiation in the Uruguay Round. The second sequence is best illustrated by the approach that the European Union has taken to the four so-called Singapore issues of competition policy, government procurement, investment, and trade facilitation. Brussels pressed for WTO negotiations on these topics, but was forced by the strong opposition from developing countries to take all but trade facilitation off the table in the Doha Round. The EU negotiators then turned to FTA negotiations as their Plan B. Most of the agreements that the European Union and the United States have reached with developing country partners since the Uruguay Round cover not only the Singapore issues, but also other topics that never made it onto the table in Doha (e.g., labor rights and the environment).

The facts might more strongly argue for the optimistic than the pessimistic view of FTAs, were these normal times, but that conclusion may be too sanguine in the age of Trump. This administration’s priorities look as much to the past as they do to the future; for all of its emphasis on innovation and intellectual property rights, it is at least equally interested in transforming a chronic merchandise trade deficit into a surplus. The same may be said for Trump’s confrontational tactics, which bear a closer resemblance to the diplomacy of the early nineteenth than the late twentieth century.

`THE CHALLENGE OF DOMESTIC POLITICS`

No matter who occupies the White House, trade policymaking will remain perennially challenging for a system of government that is always divided by branch and frequently by party. This is a matter of constitutional design as well as public preference, and has grown even more problematic in recent decades. Whereas government was divided in just seven of the thirty-four Congresses (21 percent) from 1901 through 1968, the share grew to nineteen of the twenty-six Congresses (73 percent) from 1969 through 2020.

Donald Trump is only the latest president to discover just how much harder governance becomes when the opposition party controls at least one chamber of Congress. He was able to act in 2017–2018 with little restraint from the legislature because (1) he made full use of existing delegations of authority and (2) his party controlled both chambers. Some of the things that the administration planned to do in its second two years required the acquiescence of Congress, which became more challenging after Democrats recaptured control of the House of Representatives in the 2018 elections. That put the opposition party in a position not only to thwart Trump’s plans, but also to keep him and his administration occupied by investigations and impeachment.

Trade is the only topic on which the Democrats as a whole are more closely aligned with Trump than are the Republicans in Congress, but there are some signs of change in both parties.¹⁴ The shifts among Democrats can be seen both in the rising levels of protrade sentiment in that party’s base and in a concurrent decline in the influence of the unions.¹⁵ As for the Republicans, there is a chance that Trump’s most lasting effect on domestic politics may be to return that party—or at least many of its votes and officeholders—to its protectionist roots. These are issues that may be at the forefront of US trade policy for the foreseeable future.

How a Domestic Role-Reversal Affects the Trading System

Divided government complicates all manner of policymaking, but is especially problematic for the approval of treaties. Even when the United States is the chief promoter of a new negotiation, the results may still be trashed at home. President Woodrow Wilson (a Democrat) set that pattern when he signed the Treaty of Versailles in 1919, only to see the Republican-controlled Senate gut it with amendments and then disown the mutilated corpse. Harry Truman was another Democrat who did no better when in 1947 he asked Congress—once more under Republican control—to approve the Havana Charter of the International Trade Organization. The only difference was that this time the rest of the world did not try to make a rump international institution function without the United States. As troublesome as this pattern may be for US negotiators, it also creates an opportunity. Following a good cop, bad cop pattern that is familiar to fans of police dramas, legislators can be made to play a usefully obstreperous role. Whenever members of Congress threaten to reject an agreement if it contains some undesirable concession, or to do the same if a key US demand is not met, they hope to strengthen the executive’s leverage. The fact that the coordination between legislators and negotiators is imperfect is precisely what makes the tactic so effective. If foreign negotiators were to believe that Congress is really in the pocket of the executive, they would soon conclude that the act is nothing more than empty theatrics.

In the Trump administration the roles have been reversed, such that it is Congress that more often feels compelled to be the voice of reason. The US withdrawal from the TPP was unique only insofar as this time it was a president who undid a treaty, rather than letting Congress do the dirty work. Trump routinely taps into that part of the national character that is untroubled by the suggestion that it is acting in contravention of international law, sees multilateral organizations as cabals in which unscrupulous foreigners conspire to cheat Americans, and is prepared to respond not just in kind but in advance. He is not the first politician to reiterate some variation on the outdated observation that the United States has never lost a war or won a negotiation, but none of his predecessors placed so little stress on the principle of pacta sunt servanda (agreements must be kept). His administration instead seems to treat any commitments made by prior presidents as corrupt bargains or one-sided deals that it is free to violate, abrogate, or renegotiate. Of all the areas where he leaves his mark, this may have the most lasting impact on the US position in the world. A future president could reverse almost any specific action that the current chief executive might take, but that would merely reinforce the message that whatever the United States promises (or threatens) today may hold only until the next change of government. A bell cannot be unrung.

The Complications Brought on by New Issues

Even when presidents deal with members of their own party, they will run into trouble whenever their initiatives impinge on the constitutional prerogatives of a co-equal branch or are contrary to the economic interests of specific states and districts. Trade policymaking is made even more complicated by the introduction of new issues that are more divisive than those of past generations. Traditional fights over free trade versus protection have not disappeared altogether, but they sometimes have a lower profile than disputes over such hot-button topics as labor rights, the environment, and access to medicine. Some of these issues first arose in trade disputes that other countries took to the GATT, complaining that the United States discriminated against imports when it enacted laws to protect the environment. Other groups joined the fight after US negotiators brought new issues to the table on behalf of domestic industries (for example, patent protection for pharmaceuticals), and still others reflect the demands of social and economic activists (such as labor rights). Whatever the economic or legal cause, the political consequences of associating these issues with trade are enormous. New issues mean new voices, and the diversity of participants produces a clash of economic and social philosophies. This can amount to a geometric rather than an arithmetic rise in the degree of difficulty.¹⁶

The old struggles over narrow, commercial issues such as tariffs and quotas could typically be settled through some difference-splitting bargain or by compensating the losing side. The newest issues are notable for involving not just producers with interests but also consumers and even socially conscious spectators. Groups that are more interested in political causes than in their own economic interests are not easily placated by the usual instruments of cooption. These changes remade the tone and character of policy debates. While firms and labor unions act according to clearly identifiable economic interests in these matters, many of the new participants are ideologically inspired by political causes in which they have no financial stake. The newer entrants are interested in trade more for its political than its economic value, being less concerned by the effect of trade policy on sales and employment than on its utility to promote or retard some other end in domestic or foreign policy. These groups tend to put less faith in bargaining and compromise than do the traditional, typically more pragmatic interests. Both the tone and the outcome of a policy debate can be qualitatively different when participants are motivated by something other than narrow calculations of their own economic welfare. These new entrants are more likely to use the word “compromise” as a mark of opprobrium than approval, and cannot be easily bought off with exceptions or inducements.

Labor Rights as a Core Issue in the Politics of Trade

Of all the issues that have come to be associated with trade policy, none is more politically divisive than labor rights. This may be attributed to an enduring fact of American political life: for the better part of a century, labor unions have been just as closely tied to the Democratic Party as business is associated with the Republican Party. The positions of these two groups have shifted markedly on trade, and in ways that may be surprising to anyone unfamiliar with the history of US policy. Before the 1940s, US manufacturers were more committed to protection than to free trade; before the 1960s, just the reverse was true for the most influential labor unions. Much of the dynamism in the partisan politics of trade can be attributed to the gradual reversal of these positions. Trade policy used to be the one issue on which the two parties were most clearly divided, with Republicans from Abraham Lincoln (in office 1861–1865) through Herbert Hoover (1929–1933) being firmly committed to protectionism, and most Democrats taking just the opposite position. The unions’ position first began to waver in the 1960s, and just the opposite happened in the Republican Party. By the mid-1980s the two groups had completely reversed their polarities.

These shifting positions have had three impacts on US trade policy. The first is a sharp divide over trade adjustment assistance (TAA), a special program by which aid is extended to workers, firms, and communities that have been hurt by import competition. Whereas Democrats have strongly favored TAA ever since the Kennedy administration (1961–1963), Republicans usually oppose it. A second effect is in the partisan voting on trade agreements. From the late 1970s to the present, a majority of the Republicans in Congress could reliably be expected to approve most agreements that presidents submitted for their approval, but Democrats have been more difficult to persuade. The third difference concerns the terms on which Democrats might nonetheless be convinced to approve such agreements. As a general rule, their willingness to approve market-opening agreements has been greater whenever (1) the president concluding that agreement was a fellow Democrat, (2) the request was accompanied by an increase in TAA funding, and (3) the agreement in question included substantive provisions on labor rights.

That third point has been the most critical dividing line between the parties for years, especially for agreements in which most or all of the partners are developing countries. While there are many Democrats in Congress who will vote against almost any market-opening agreements, and some who take just the opposite view, the middle ground is held by those who insist that the United States use its leverage in trade negotiations as a means of promoting labor rights in the partner countries. The principal problem with this trade-labor link is not in the resistance that it provokes from the negotiating partners, but instead from the US business community and its Republican allies. Ever since 1991, when President George H. W. Bush had to bargain hard with Congress over the initiation of the NAFTA negotiations, the domestic politics of US trade policy have been repeatedly caught up in almost theological debates over this topic. Some outside observers assume that these fights are just new proxies for free trade versus protectionism, but that simplistic view of the issue does not survive a close examination.

Consider the bitter fight over the FTA with Colombia, which proved to be one of the most partisan and lengthy trade fights in US history. Unions and Democrats criticized Colombia’s antilabor record, especially the murders of union organizers and officials, and in 2006 Democrats refused even to negotiate with the George W. Bush administration over the agreement’s implementing legislation. The matter was not resolved until 2011, when President Barack Obama shepherded the FTAs with Colombia, Korea, and Panama through Congress. The severity of this fight cannot be explained solely by way of sectoral interests. Colombia was only the #23 source of US imports, and even less of what it provided was import-sensitive. By contrast, Korea supplied 2.5 times more imports than Colombia, and these imports were concentrated in such competitive sectors as automobiles and steel. And while Korea was the target of seventeen antidumping petitions filed during 2000–2011, Colombia was subject to just one. In short, if unions and Democrats calibrated their opposition solely according to narrow calculations of protectionist interest, they should have concentrated their fire on Korea. Throughout the maneuvering over these two agreements, it was widely expected in Washington that the Korean FTA would be passed as long as Seoul made a few more concessions to US demands on market access for automobiles and meat, but that Democrats would prefer to kill the Colombian agreement outright. The Korean agreement ultimately won support from only a minority among Democrats in the House (31 percent), but that was nearly twice what the US-Colombia FTA received (16 percent).

Compared to these past confrontations, the debate in the 116th Congress (2019–2020) over approving the USMCA (i.e., the revised NAFTA) was far less partisan. Notwithstanding the fact that it took many months for Democrats and Republicans to settle on the terms of the agreement’s implementing legislation, with labor issues once more being the most significant sticking point, this trade agreement was among the few issues for which internecine conflict in this congress proved relatively low. While it would be a great exaggeration to suggest that the two parties held their differences entirely in abeyance, the fact that they ultimately “got to yes” is remarkable. That distinguishes trade from the many other topics on which Capitol Hill generated much sound and fury for two years, all of which ultimately signified nothing. Beyond a failed impeachment effort, Congress proved incapable of enacting new legislation on such diverse yet important subjects as immigration, health care, and taxes. The other notable fact is that when Congress approved the NAFTA-revision bill it did so on votes that were, by comparison with the struggles summarized above, very nearly nonpartisan. When the House of Representatives approved the bill in December 2019 by a vote of 385 to 41, the number of votes that it won from Democrats (193) was nearly identical to the number it won from Republicans (192). Much the same thing happened when the Senate took up the bill: while Democrats cast all but one of the ten “nay” votes, they also provided thirty-eight of the “aye” votes. That January 16, 2020 vote was all the more remarkable for its timing, coming just a week before the Senate began debating the preliminary motions in the president’s impeachment trial. The question now is whether that one incident was unique and transitory, or if it presages a new alignment in partisan positions. The answer depends above all on whether the Republican experience with Trumpism proves to be a temporary flirtation or a lasting repolarization.

`CONCLUDING OBSERVATIONS`

The trends and events reviewed here underline the peril in which the international trading system now finds itself. For good or for ill, the health of that system has long depended on the capacity and willingness of the United States to provide leadership. The focus of this analysis has been on just how far the Trump administration has gone in reversing the policies pursued by Franklin Roosevelt through Barack Obama, all of whom started from the premise that both the United States and the world are better off if markets are generally open. This is not to say that the Trump administration broke radically from established US positions on all trade issues. There are some matters on which its policies show real continuity, in substance if not in style, with those of past presidents—it is negotiating FTAs with largely the same partners with which the Obama administration dealt, for example, and its use of trade-remedy and reciprocity laws is reminiscent of what the Reagan administration did. Taken as a whole, however, the principal themes of trade policy in this administration represent a negation of American leadership. Its action poses an existential threat to a multilateral system in which the United States has invested considerable political capital over several generations.

Some speculation is in order on whether and how this deviation might be corrected. This chapter is written at a time (July 2020) when it remains uncertain whether Trump’s remaining time in office may be measured in months or years, but either way we can be certain that while his administration will be finite, the environment in which it emerged will not fundamentally change. Those observations beg the question of whether the United States will attempt once again to exercise responsible leadership in the global trading system.

The answer does not depend solely on personalities, as there are structural issues at stake. No matter who occupies the White House, and contrary to the intentions of the Trump administration, neither the Law of Uneven Growth nor the process of Creative Destruction are easily reversed. The long-term trends have been evident for decades, with successive presidents seeking to manage a relative US decline even as they dealt with shifts in the composition of the domestic economy. Trump’s predecessors tried to do so by making incremental adjustments to US policies and the trading system; he has instead tried to overturn that system altogether. The extent of the damage will depend first on whether the current experiment with Trumpism is held to just four years, and second on how his successor tries to pick up the pieces.

This is partly a matter of which party controls government. The events of the last several years have reinforced the old lesson that trade is not the core issue dividing Democrats from Republicans. As noted above, the parties have already switched their polarities on this issue twice. With Republicans having been rock-ribbed protectionists during the century that followed Lincoln’s 1860 election, and Trump yanking the party back to that position in 2016, their free-trade tenure lasted little more than a generation. It may be possible for Republicans to regain that position, depending on the course of Trumpism within the party, but in the near term the internal debates in the Democratic Party may be more consequential for US trade policy. That may come down to a struggle between the party’s internationalist and labor wings.

For over a century, the postures that each party has taken on trade issues have been the product of two perennial divides: internationalism versus isolationism, and capital versus labor. Democrats have consistently been more devoted than Republicans to the notion that the interests of the United States are best secured through international cooperation, whether that took the form of functional organizations or military alliances, and the party’s political base has always depended far more on labor than on capital. Trade politics were relatively simple when these two divides were in alignment. From the 1930s through the mid-1960s, both the internationalist and the labor wings of the Democratic Party favored open markets. It was only with the emergence of chronic trade deficits, especially in labor-intensive manufactures, that tensions arose between the party’s factions. Democrats have sought ever since to reconcile their internal differences, such as by making labor rights a key objective in trade negotiations, but these initiatives have had only limited success. From Kennedy through Obama, every Democratic president has been an internationalist whose ability to move trade initiatives through Congress has been complicated by the tricky politics of intraparty conflict and interparty rivalry. That is the position in which Joe Biden will find himself, should he be elected the forty-sixth president of the United States. He is more associated with the internationalist wing of his party than were most other contenders for the Democratic nomination, but his ability to act on those instincts will be bounded by the same constraints that his predecessors have faced.

Compared to trade policy under the Trump administration, the policies of a Biden administration might be distinguished more by what the president declines to do than by what he affirmatively seeks. Assuming that a Biden administration maintains the Democratic preference for cooperation with allies and respect for the rule of law, we may expect it to avoid unnecessary provocations and outright violations of the trading system’s rules and norms. That may well mean returning to the shelves those trade laws that had fallen into disuse after the Uruguay Round, including the reciprocity, safeguards, and national security statutes; to the extent that the United States resorts to protectionism, it may depend once more on the private sector’s resort to the AD and CVD laws. We might also anticipate a moratorium on the US withdrawals from international organizations, and perhaps a return to those from which the Trump administration removed the United States.

While a post-Trump United States may end its retreat from global institutions, that is a far cry from a true revival of multilateralism. Assuming that a Biden administration were to complete any FTA negotiations that it inherits, the United States will soon trade more with the partners in these discriminatory agreements than it does with the rest of the WTO membership. And to the extent that the WTO comes to be seen primarily as the place where the United States deals with China, the members of that institution may continue the established trend whereby they devote more time to adjudicating their existing agreements than to negotiating new ones. It is questionable just how sustainable that may be over the long term. Trade liberalization may also have to compete with purely domestic policies that are disquieting to free-traders. No rational politician in any party can unsee what they all saw in 2016, when economic nationalism had wide appeal, and even office seekers who reject the more extreme elements of Trumpism see real value in “Buy American” themes. In short, we should not expect the departure of Donald Trump—whenever and however that happens—to mean an end to Trumpism.

`EPILOGUE: FROM TRUMP TO BIDEN`

There are three reasons why we should not expect the results of the 2020 presidential and congressional elections, which came between this chapter’s writing and the book’s publication, to create the domestic political foundations needed for the full restoration of US leadership in the trading system. First, while the final Senate results were still pending as of this writing, it appears that Joe Biden will be the first president in 32 years (and the first Democratic president in 136 years) to face divided government from the day he took office. Second, neither of the parties will have clear positions on trade as long as Democrats are divided between the progressives and the internationalists, and Republicans have yet to decide whether theirs is merely the opposition party, a party of principle, or a cult of personality. Third, the pandemic muddled the message by ensuring that the election would not be a referendum on Trump’s economic policies. So while the next four years may be less turbulent, and the United States may show greater fidelity to alliances and the rule of law, the domestic and international trends that already bedeviled US trade policy before Donald Trump took office will not disappear after he leaves.

`NOTES`

The project to which this chapter contributes has received funding from the European Union’s Horizon 2020 research and innovation program under grant agreement no. 770680.

1. For an elaboration on this argument, see VanGrasstek (2019).
2. All shares calculated from World Bank data at https://data.worldbank.org/.
3. The author explores the domestic political economy of protectionism at greater length in chapter 6 of VanGrasstek (2019).
4. This point is discussed in a later section.
5. Past presidents used this law and its predecessor statute to impose restrictions on oil imports five times, but invoked it only twice on behalf of other industries. President Reagan resorted to Section 232 in a 1981 ferroalloys case, and again in a 1986 machine tools case.
6. The United States invoked Article XXI in 1949 in order to apply the newly enacted embargo on exports of strategic goods against Czechoslovakia, and did the same in 1985 when Nicaragua objected to an embargo imposed by President Reagan. The Kennedy administration was prepared to cite this article in defense of its embargo on Cuba, but that was rendered moot by Cuba’s failure to lodge a formal complaint.
7. The first EU invocation came in a 1982 defense of the import restrictions that it (together with Australia and Canada) imposed on Argentina during the Falklands/Malvinas war. Brussels also invoked Article XXI in 1991 to justify its withdrawal of preferential treatment from Yugoslavia; the breakup of that country made a panel moot.
8. On the accession of Portugal in 1961, for example, Ghana stated that its boycott of Portuguese goods was justified under Article XXI because Angola posed a constant threat to peace on the African continent. Honduras and Colombia settled a dispute in 1999 over their maritime boundaries, but Nicaragua objected and imposed a 35 percent tariff on all imports from Honduras and Colombia. Nicaragua then invoked Article XXI when those countries sought a panel. The parties eventually agreed to take the issue up in the International Court of Justice, and no WTO panel was formed.
9. See the November 7, 2017, statement of the United States in support of Russia as posted by the Office of the US Trade Representative at https://ustr.gov/sites/default/files/enforcement/DS/US.3d.Pty.Sub.Re.GATT.XXI.fin.percent28public percent29.pdf.
10. For a more thorough examination of preferences in US trade policy, see chapters 13–15 of VanGrasstek (2019).
11. The negotiations for the original (bilateral) FTA with Canada concluded in 1988, followed by the trilateral NAFTA that was initially concluded in 1992 (then modified and approved in 1993).
12. Calculated from World Bank data at https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS.
13. The 37.4 percent is the sum of China (16.3 percent) plus its current FTA partners (9.6 percent) and the partners that are either still negotiating (9.2 percent) or under study (2.3 percent).
14. For a fuller review of this issue see VanGrasstek (2018).
15. The share of American workers represented by unions rose from 5 percent in 1933 to 22 percent in 1945, plateaued for a time, and then fell from 23 percent in 1983 to 12 percent in 2015. Calculated from US Department of Commerce, Historical Statistics of the United States, Colonial Times to 1970 (1975), p. 178; and Bureau of Labor Statistics data at https://data.bls.gov/pdq/SurveyOutputServlet.
16. The author examines the political economy of new issues in VanGrasstek (2019, chap. 5).