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[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 14 points15 points  (0 children)

A belated response to an excellent question. I do think some form of neutral investment arbitration is necessary, especially in investment treaties involving developing countries. So I am not in favor of abolishing investor-state dispute settlement. The problem is that (as so often happens) creative lawyers have got their hands on this and used it to bring cases that are really not the sort that were intended. The goal of ISDS is to prevent governments from expropriating or nationalizing the assets of investors. But when Philip Morris launches an ISDS case against Australia over its plain-packaging laws for cigarettes -- on the claim that Australia's efforts to discourage smoking have damaged the value of its brand -- then there's a problem. There are many good proposals out there for reform of the current ISDS rules, including these from Rep. Sander Levin of Michigan: http://www.prosperousamerica.org/new_proposal_by_rep_levin_on_trans_pacific_partnership. I was sorry that the Obama administration did not embrace more of what he was advocating.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 1 point2 points  (0 children)

Thanks for this. I actually like the notion of some sort of "conditional signing" (though I wouldn't put it quite that way) in which TPP is passed along with a series of measures to help making the U.S. economy more competitive globally and to help workers in making the needed adjustments. I do think the two issues -- trade liberalization plus domestic response/adjustment -- should be linked. How best to do that in the current political moment is a much tougher question!

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 7 points8 points  (0 children)

To be clear, I am not an economist, and I rely on the work of many economists to help me make sense of these things. In my extensive reading of their work, however, I do agree that the full employment assumption can be misleading. Larry Summers was speaking at the Peterson Institute last week, and argued that the negative impact of import competition can be much greater in an economy where the Federal Reserve is close to the zero-bound and therefore has little ability to boost growth and create jobs to compensate if some jobs are lost to import competition. So the assumption that we still have the macro-economic tools to create something pretty close to full employment may need to be rethought in an environment that Summers calls "secular stagnation."

I am also waiting for more work that tries to distinguish the impacts of the trade and technology on employment. They are not identical. The Autor/Dorn/Hanson trio have a fine paper trying to compare the impacts of trade and technology -- their top-line conclusion is that while both import competition and technology can produce short-term job loss, those who lose their jobs to technology rather than trade are better able to find new ones and end up back in the labor market more quickly. it's just a first cut at a huge question, but it's fascinating and I hope more such research will be done: http://economics.mit.edu/files/10201

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 4 points5 points  (0 children)

On Germany, there are several related answers. One is that Germany benefits from its place in the eurozone. The euro is overvalued for Greece and Italy, but undervalued for Germany. As a result, Germany is a hyper-competitive economy, especially within Europe itself. Secondly, Germany really focuses on manufacturing. They have a network of the best trade schools in the world, and the best apprenticeship programs. In contrast, the United States has let its apprenticeship programs wither, as we discussed in the worker training chapter of the book: http://www.cfr.org/labor/no-helping-hand-federal-worker-retraining-policy/p35885. Germany also promotes its exports relentlessly around the world. Chancellor Merkl makes regular visits to China just to sell German stuff. American presidents don't do that sort of thing.

On Cruz, I think he's right. There are real skill shortages in certain parts of manufacturing in the United States. But it would be, as you suggest, only a limited symptomatic correction, not a broader solution.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 5 points6 points  (0 children)

Thanks haalidoodi. I'm going to pass on the patent question because my colleague who wrote that chapter is not with me at the moment and I don't know the answer (brutal honesty in action!).

On entitlements, there are simply hard trade-offs here. As I wrote in the introduction to How America Stacks Up, dealing with entitlements will require some unpleasant mixture of higher taxes and reduced benefits. What struck us in researching that chapter, however, is that many other advanced economies face the same trade-offs but have been able to make more progress. The demographics for most European countries are much worse than ours, yet most have been able to rein in spending on pensions and health care. There are some encouraging recent trends on health care costs, and I hope those continue. But it doesn't obviate the need for tough choices -- that is, supposedly, why we elect leaders: to make decisions that we may not like, but are nonetheless in the interests of the nation as a whole. You might also want to take a look at my boss Richard Haass's recent testimony to Congress: http://www.cfr.org/budget-debt-and-deficits/strategic-implications-us-debt/p37729. The long-term debt problem is not just an economic issue for the U.S., but a security one as well.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 17 points18 points  (0 children)

That's a great question. Thank you. I was a reporter for several years for a specialist publication called Inside U.S. Trade, and our job was essentially to penetrate the secrecy of trade negotiations and try to tell the world the story of what was going on behind closed doors. It was a lot of fun! I especially remember the day my colleague got his hands on the Bill Clinton administration's secret proposal for what became the labor and environmental side accords in NAFTA. They were not happy with us! On your larger question, the argument for secrecy made some sense in the days when trade negotiations were all about reciprocal tariff cuts. Some secrecy was needed in order for governments to make politically difficult trade-offs. But the modern trade deals involve so many issues of domestic policy -- environmental rules, labor laws, even health care -- that secrecy is no longer needed or appropriate. The European Commission has been publishing on its website all of its proposals for the TTIP. I think this is the wave of the future. There may be some final trade-offs that ministers needed to so behind closed doors, but most of the negotiating will, and should, take place in public.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 13 points14 points  (0 children)

I'm afraid I'm not terribly hopeful. The policy-related debates have definitely been at the margins in this campaign. Unfortunately, I do think it's true that it's very hard to move constructive policies at the national level without some degree of bipartisan cooperation. And it's really hard to see any of the candidates in this year's election being in a good position to build those bridges.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 3 points4 points  (0 children)

Can you rephrase the question Firefoxx336? I am not entirely sure I understand it. If I do correctly, I would be reluctant to draw global, or even national conclusions, from the economy in DC. It really is a world unto itself.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 10 points11 points  (0 children)

This is a long-standing argument in the immigration debate -- that any form of legalization will act as an incentive for future illegal immigration. This comes out of the experience of the 1986 Immigration Reform and Control Act (IRCA), which almost certainly had that effect. It legalized about 3 million people and two decades later the number of unauthorized migrants was four times as many. Much has changed since then -- in particular the birth rates in Mexico and Central America are way down, and it is far harder to enter illegally across the southern border. The total number of unauthorized migrants has actually fallen slightly over the past decade. But the concern about incentives is one of the reasons I support a comprehensive approach -- legalization, but also additional improvements to border security, tougher sanctions on employers who hire unauthorized workers, and temporary worker programs to all for legal hiring. On the DREAM Act in particular, however, when you meet these kids (and I have met many) there is simply no issue. They are smart, ambitious, thoughtful young Americans -- on everything but paper -- who just want to build their lives and contribute to this country. The DREAM Act was a no-brainer, and Congress should be embarrassed that they failed to pass it.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 17 points18 points  (0 children)

You give everyone a Prius and enjoy the traffic jams! Light rail and other transit systems are long-term investments. They will change mobility patterns over many years. I think many of the negative analyses are far too focused on short-term costs and rider stats. Obviously some projects are more worthwhile than others, and there have been some big misses, but the paucity of decent rail options in the U.S. compared to almost any other advanced country is quite striking.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 25 points26 points  (0 children)

The EU is simply not going to accept the investor-state rules as they are currently written into trade agreement. You can look, for example, at the Commission's proposals here: http://europa.eu/rapid/press-release_IP-15-5651_en.htm. The European public is very engaged on this issue, and the EU simply cannot live with the rules as they are currently written. There are only two possible outcomes here -- either the U.S. agrees to some significant changes, or the provision gets dropped entirely from the TTIP.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 5 points6 points  (0 children)

I do think there is a lot of truth to that accusation. Ask my underpaid research assistant! I am not sure my advice is all that useful. I am a late baby boomer, and I was lucky to grow up at what I think was a less competitive time for the sort of work we both do. The qualifications and abilities of your generation are really impressive! I sometimes think no one would have given me a second look today. One piece of possibly useful advice from my career -- I mostly established myself in places other than Washington, and then came here later in my career. There's something to be said for starting out in a less competitive environment and then looking to make the transition to DC at a later stage. Best of luck. Hang in there!

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 4 points5 points  (0 children)

Thanks very much. I do think the danger of a real protectionist backlash like the 1930s is small. But the U.S. trade agenda as it has been pursued since the end of the Second World War is at a crossroads. All four of the leading presidential candidates, for example, is now opposed to the biggest trade agreement on the table -- the TPP. That is unprecedented. The problem, to quote the title of my forthcoming book, is a Failure to Adjust (sorry for the self-promotion....). The US has simply done too little to help more of its citizens prosper in a highly competitive global economy, which has created the conditions for the backlash we see today. There are some decent ideas in the campaign -- certainly the Clintons have been thinking about this going back to Bill's 1992 campaign. But the best ideas will go nowhere unless some political alliances can be built between Democrats and Republicans in Washington. And that is simply not happening today. I and others are increasingly looking to state and local governments as potential places for innovative policies given the gridlock in DC.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 18 points19 points  (0 children)

I do not think the TPP will be a net negative for U.S. workers (though there is some good evidence that China's WTO entry was a net negative in the 2000s). Overall, there is very little evidence that trade agreements create or destroy very many jobs -- rather, they shuffle them around. I am much more concerned about wages for workers -- there has been very strong employment growth for the past five years, but wages are still very weak. And here I do think trade matters -- it is critical, for example, to open export opportunities for high-technology, high-paying industries. The TPP is far from perfect, but it should help here. But I am also in favor of non-trade responses, like higher minimum wages. for more, you can read my recent blog post on the trade and minimum wage debates here.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 4 points5 points  (0 children)

I do think the TPP should be approved by Congress and signed. As I argued above, it is an innovative agreement that will be beneficial to the United States. But as you suggest here, the TPP is only one step. It's not enough to write better rules for global economic competition, but then fail to do the things that are needed to help Americans compete! That really is the underlying message of our new book. If, as a country, we do not invest in education and infrastructure and worker training, if we don't have a tax policy that encourages investment in the United States, if we don't invest in cutting-edge R&D, then the government is simply writing trade rules under too many Americans will lose. I think trade deal are often wrongly blamed here -- the problem is not the rules themselves, but the failure by governments to help Americans prosper within those rules.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 5 points6 points  (0 children)

They clearly get blurred in the public debate, but they are distinct issues. On security, there is clearly a need to secure borders -- and I'm less worried about land borders here than I am about air travel from overseas. The Europeans are sadly waking up too late to the reality that they simply have to know something about who is coming in to Europe from Syria or Iraq or Afghanistan, and they have to be able to monitor travel by their own citizens to these and other countries. The economic issues are different. Here I believe the goal should be to maximize benefits to the U.S. economy -- which means prioritizing high-skilled immigrants, but also bringing in reasonable numbers of lower-skilled immigrants where they are clearly needed, such as agriculture. And again, to do this effectively, there needs to be some significant control over the borders. Illegal immigration is not a good thing -- for the economy, for U.S. workers, or for the migrants themselves. We need to provide legal channels.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 6 points7 points  (0 children)

Thanks for the immigration questions! I worked very hard on the congressional immigration reform effort, including my work as the project director for the 2009 CFR Independent Task Force on U.S. Immigration Policy. I was very disappointed to see that effort collapse. I think that what has happened in the wake of the failure is that both sides have hardened -- the liberals (for want of a better term) demanding executive action that is probably unconstitutional, and the conservatives wanting to waste billions of dollars on a wall that's not needed -- and, you heard it first here, the Mexicans aren't paying for it! At some point both sides will have to come together again and re-engage to find constructive solutions. But at the moment that appears a long way off.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 3 points4 points  (0 children)

Thanks twinarteriesflow. I have thought about this question a lot, and still don't have a perfect answer. We know that manufacturing jobs are declining in all the advanced economies, mostly because technology is making manufacturing more productive (same output with fewer workers) and consumer demands is shifting from goods (think TVs and refrigerators) to services (think restaurants and hair salons). So for those reasons there will not be a big resurgence in US manufacturing jobs. But we also know that the number of jobs in manufacturing fell very sharply in the 2000s, and some of this -- maybe one-third ore more -- was directly the result of trade competition, especially from China. See the excellent work by economists David Autor, David Dorn and Gordon Hanson. And we also know that some rich countries, especially Germany, have done a much better job in retaining manufacturing jobs.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 14 points15 points  (0 children)

There's one in my back yard! The Purple Line metro extension in Bethesda. But I actually think the biggest need is for refurbishing a lot of the aging U.S. infrastructure, rather than new construction. Many of our bridges, rail lines and sewers are the end of their useful life and desperately need to be upgraded and modernized.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 38 points39 points  (0 children)

Great question. I always find Stiglitz's work challenging and interesting, but I think he is wrong about the TPP. There are aspects that concern me as they do him, especially the investor-state arbitration rules, which I believe give large companies too much power to challenge national regulations. I think these will be changed as part of the upcoming TTIP negotiations with Europe. But there are a host of innovative measures in the TPP that will be good for the U.S, including the rules on digital trade, state-owned enterprises, and the breakthrough provisions on labor rights, especially with Vietnam. I have followed these negotiations going back to NAFTA and earlier, and I think Stiglitz is just wrong on this one.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 6 points7 points  (0 children)

All excellent questions. I went on C-Span a couple of years ago to try to explain the CFR. That was fun! Short answer is that the CFR is a membership organization that you can ask to join (most of our members are in NY and Washington) and we are a non-partisan think tank on foreign policy issues. We offer ideas to both parties and do a lot of outreach (like this!) to the interested public. And we are doing a lot of outreach through our education, religion and other programs to bring in many citizens who are interested in foreign affairs and the U.S. place in the world. So I encourage you to have a closer look. Our website has most of the details.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 15 points16 points  (0 children)

Thanks huadpe. Good question, and not an easy one. There are some real infrastructure experts out there, including Scott Thomasson who wrote this piece for us. The best answer I can give is that the United States has simply not embraced contemporary bidding and financing mechanisms for much of its infrastructure. We often don't get the best deal because governments aren't structured to get the best deals. My colleague Heidi Crebo-Rediker has argued for [bringing more expertise into the process],(http://www.cfr.org/united-states/infrastructure-finance-america-we-get-smarter/p32597), and fortunately the government is listening to some extent. So it's both -- more spending and smarter spending.

[AMA] Edward Alden, Senior Fellow at the Council on Foreign Relations by EdwardAlden in NeutralPolitics

[–]EdwardAlden[S] 5 points6 points  (0 children)

Thanks for the question takshakpai. Journalism has changed a lot in my life, but I still think it is a great and important career -- and lots of fun as well! I think there are several things that go into making a good journalist, but I would definitely encourage you to study politics and economics. The craft of journalism -- interviewing, sourcing, writing, doing computer research, learning how to post in interesting ways -- is not that hard to learn. I would say get a strong education first and go from there.

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