International Trade and Economic Negotiation

IRP/PPA 715-2

Maxwell School of Citizenship and Public Affairs

Syracuse University

Fall Term, Academic Year 2011

Dr. Bart S. Fisher Paul J. Fekete Tel: 202 659 2979 Tel: 202-686-1759 Email: [email protected] Email: [email protected]

International Trade and Economic Negotiation Course Outline

The purpose of the course is to explore the challenges confronting international trade policy and current negotiations designed to address these challenges.

The methodology will be inter-disciplinary, including political, economic, and legal analysis.

The basic textbook will be Bart S. Fisher and Michael P. Malloy, International Trade and Investment. The textbook will be provided as part of the Course Materials for the students in this class. There will be a materials charge of $40 per student. All of the documents required for the course will be handed out as Course Materials to the students in the class, or available online. There will be no other required purchases of books or other materials by students in the class.

Additional readings for the course are described below.

The student agency report and some possible paper topics are also suggested below.

This is a one-semester course, with one grade given at the end of the semester. The grade will consist of two elements, each equally weighted.

1. Class Participation. Attendance, punctuality, and the degree of informed class participation are included. Please give notice if you will be unable to attend a particular class session.

2. Work Products. This part of the grade will include preparation of an agency report, a paper for the course, or other “role playing” assignments provided to students in the class. There will be no final examination at the end of the course.. REGULATORY FRAMEWORK ASSIGNMENT

This assignment is designed to provide a practical roadmap to the agencies that regulate international trade in goods, services and capital.

Each report should describe the regulatory functions and roles played by the assigned department, agency, or institution. This description should fall into two parts—the assigned role designated by statute, or charter, and the powers actually exercised by the office/agency in practice. Emphasis should be given to changes in role or policy in recent years, or over time.

1. European Union (EU) Commission

2. North American Free Trade Agreement (NAFTA)

3. World Intellectual Property Organization (WIPO)

4. Organization for Economic Cooperation and Development (OECD)

5. International Finance Corporation (IFC)

6. International Bank for Reconstruction and Development (EBRD)

7. Inter-American Development Bank

8. International Monetary Fund (IMF)

9. World Trade Organization (WTO)

10. World Customs Organization (WCO)

11. African Union (AU)

12. APEC

13. ASEAN

14. East African Community (EAC)

POSSIBLE PAPER TOPICS

1. Alleged currency manipulation by the People’s Republic of China (PRC); are new international trade rules needed to regulate currency levels?

2. Should the United States permit purchases of its companies such as Unocal and Maytag by PRC entities: activities of CIFIUS and regulation of foreign investment in the United States

3. The role of electronic commerce in international trade 4. The Airbus dispute with the European Union: the issue of subsidies in international trade

5. The relationship between international trade and peaceful relationships

6. The role of states (e.g., California or Virginia) in promoting international trade, investment, and local economic development

7. Countering OPEC: what is to be done?

8. Convention on International Trade in Endangered Species (CITES)

9. Basel Convention on Trans-Border Transportation of Hazardous Wastes

10. The relationship between the U.S. budget deficit and the U.S. trade deficit

11. How should the United States tax multinational enterprises?

12. Prospects for CAFTA-DR

13. Is NAFTA working?

14. The technology factor in international commerce: is the United States losing its scientific and technological edge in areas such as biotechnology and nanotechnology?

15. Implications of the end of textile quotas under the MFA

16. Outsourcing: implications for U.S. employment

17. What should be the U.S. policy on immigration?

18. The case of Yahoo in China: privacy concerns, human rights, and the possible extraterritorial application and effect of U.S. laws

19. The global quest for energy supplies: the case of China and Japan contesting the East China Sea for exploration purposes

20. Should China be considered as a market economy for purposes of the Antidumping Law of the United States?

21. Accession of Russia to the World Trade Organization

22. Free trade in the Middle East

23. Role of Wal Mart in international trade

24. U.S. policy towards international commodity agreements

25. WTO Dispute Resolution: is it working? For whom? 26. Transnational Corporate Figures: The Case of Rupert Murdoch

27. Surfing the Internet: The Development of International Electronic Commerce and its International Regulatory Aspects

28. Relationship between use of grains as food and/or fuel.

29. What’s at stake with the Doha Round of multilateral trade negotiations?

30. Potential impact of Free Trade Agreements with Panama, Colombia, and/or Korea

31. Economic stimulus policy in China and its impact on international trade in goods, services, and capital

32. The economic meltdown in Iceland

33. The impact of the global recession on international trade

34. Efficacy of economic sanctions on Iran, North Korea, Cuba

REQUIRED AND RECOMMENDED READING

Asterisk (*) denotes required reading for the course. Other materials are recommended readings but not required reading for the course.

First Class—FEKETE/FISHER—September 7, 2011 Introduction: The Context of International Trade Policy

• *Materials on Globalization provided to the class

• Taleb, Nassim Nicholas, The Black Swan: The Impact of the Highly Improbable, Random House, 2007.

*Fisher and Malloy, Chapter I

• *Bergsten, C. Fred, The United States and the World Economy, Chapter 1. Institute for International Economics, 2005.

• Pearson, Charles, United States Trade Policy: A Work in Progress, Chapter 1., “An Overview”

• Prestowitz, Clyde, Three Billion New Capitalists: The Great Shift of Wealth and Power to the the East, Basic Books, 2005

• Yergin, Daniel, The Commanding Heights: The Battle for the World Economy, Touchstone, 1998.

• Bhagwati, Jagdish, In Defense of Globalization, Oxford University Press, 2004.

WTO: Economic Underpinnings: http://www.swisslearn.org/wto/module4/e/start.htm Review The Impact of Tariffs on National Welfare at: http://polaris.umuc.edu/ %7Epfekete/IMAN625/TariffGraph/sld001.htm

Second Class—FEKETE—September 14, 2011 The Institutional Framework for American Trade Policy

Each person shall deliver an oral report to the class of no longer than 5 minutes on the agency assigned. In addition, an outline of the report (no longer than 2 pages) should be prepared for distribution to the class. Both time and page length requirements will be strictly enforced, to encourage students to present their ideas in a succinct manner.

1. Office of the United States Trade Representative

2. Department of Agriculture

3. Department of Commerce

4. Department of State

5. Department of Homeland Security

6. International Trade Commission

7. Department of the Treasury

8. Overseas Private Investment Corporation

9. Export Import Bank of the United States

10. House Ways and Means Committee

11. Senate Finance Committee

15. National Security Council

16. US Court of International Trade

• *Fisher and Malloy, Chapter III, “Regulation of International Trade: The Institutions”

• Destler, I.M,, American Trade Politics, 4th Edition, Institute for International Economics, 2005, Chapters 1 through 5.

Third Class—FISHER—September 21 The Competitiveness Challenge: Trade in Fairly Priced Goods Herein of the cases of automobiles and textiles

• *Materials on Obama Administration Trade Policy provided to the class • *Fisher and Malloy, Chapter IV, “Relief from Fairly Priced Foreign Competition”

• *Gilboy, George, “The Myth Behind China’s Miracle,” Foreign Affairs, July/August 2004

Pearson, Charles, Chapter 3, “Flirting with Managed Trade”

• *Lardy, Nicholas, Integrating China into the Global Economy, Brookings, 2002 (1604 .L275 2002)

• Lardy, Nicholas, China’s Unfinished Economic Revolution, Brookings, 1998.

• Lardy, Nicholas, “China: The Great New Economic Challenge?” Chapter 4 in Bergsten, C. Fred, The United States and the World Economy.

• Navarro, Peter, The Coming China Wars: Where They Will Be Fought and How They Will Be Won, Financial Times/Prentice Hall, 2006.

• *Navarro, Peter, China Price Project - click here.

• Fishman, Ted C., China, Inc.: How the Rise of the Next Superpower

• *Hufbauer, Gary C., Wong, Y., and Sheth, K., U.S.-China Trade Disputes: Rising Tide, Rising Stakes, Institute for International Economics, 2006.

• Challenges America and the World, Scribner, 2005.

• Groombridge, Mark A., and Barfield, Claude E., Tiger by the Tail: China and the World Trade Organization, The AEI Press, 1999.

• *Section 201 of the Trade Act of 1974, as amended, Bhala, pp. 1304-1325.

• Rogers, Jim, A Bull in China: Investing Profitably in the World's Greatest Market. Random House, 2007.

• Zeng, Ming and Williamson, Peter J., Dragons at Your Door: How Chinese Cost Innovation Is Disrupting Global Competition. Harvard Business School, 2007.

Fourth Class--FISHER—September 28, 2011 The Competitiveness Challenge: Trade in Services and the Debate Over Outsourcing and Offshoring

• Nath, Kamal, India’s Century, McGraw Hill, 2008.

• *Friedman, Thomas L., The World Is Flat: A Brief History of the Twenty-First Century, Farrar, Straus and Giroux, 2005

• *Mann, Catherine L., “Offshore Outsourcing and the Globalization of US Services: Why Now, How Important, and What Policy Implications,” Chapter 9 in Bergsten, C. Fred, The United States and the World Economy. • Raj, Vinay. Think India: The Rise of the World's Next Superpower and What It Means for Every American. Dutton, 2007.

Fifth Class—FEKETE—October 5, 2011 The Challenge of Competing Against Unfairly Priced Goods

 Committee on Ways and Means, U.S. House of Representatives, Overview and Compilation of U.S. Trade Statutes, Part I of II., 2005 edition, 109th Congress, 1st session, WMCP 109-4 [available online at http://www.gpoaccess.gov/wmprints/109-4/109-4.pdf pp. 96-120; 134-140; 184-186

Herein of the case of steel

• *Fisher and Malloy, Chapter V, Antidumping Duties

• Destler, Chapter 6, “Changing the Rules: The Rise of Administrative Trade Remedies”

• *Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Antidumping” Agreement, Bhala, pp. 392-419.

• Irwin, Douglas, Free Trade Under Fire, Princeton University Presss, 2005.

• B. Bhattarcharyya, The Indian Shrimp Industry Organizes to Fight the Threat of Anti-Dumping Duties, - click here.

Sixth Class—FISHER—October 12, 2011 The Challenge of Subsidies in International Trade

Herein of the cases of agriculture (U.S. and Europe) and currency manipulation (China)

• *Fisher and Malloy, Chapter VI, Subsidies and Countervailing Duties

• Daniel Griswold, Grain Drain, The Hidden Cost of U.S. Rice Subsidies, Cato Institute, November 16, 2006 - click here.

• WTO Decision on United States Subsidies on Upland Cotton, Report of the Appellate Body, WT DS 267/AB/R, March 3, 2005

• Robert Samuelson, "The Airbus Showdown," December 8, 2004 - click here.

• Irwin, Douglas A., and Nina Pavcnik (2004). "Airbus versus Boeing Revisited: International Competition in the Aircraft Market." Journal of International Economics 64 (2): 223-245. - click here.

• *Agreement on Subsidies and Countervailing Measures (“SCM Agreement”), Bhala, pp. 473-521.

Seventh Class —FISHER—October 19, 2011 The Energy Challenge

OPEC: What Response

Alternative Fuels: what are the prospects

• *Friedman, Thomas L., Hot, Flat, and Crowded, Why We Need a Green Revolution - and How It Can Renew America. Farrar, Straus and Giroux, 2008.

• *Materials on Cap and Trade provided to the class

• *Philip K. Verleger, Jr., “Energy: A Gathering Storm?” Chapter 7 in Bergsten, Fred C., The United States and the World Economy

Eighth Class—FEKETE—October 26, 2011 The Development Challenge: International Trade

 http://www.wto.org/english/tratop_e/devel_e/a4t_e/aid4trade_e.htm

 http://www.wto.org/english/tratop_e/devel_e/a4t_e/a4t_factsheet_e.htm

 http://www.wto.org/english/tratop_e/devel_e/a4t_e/what_why_how_e.pps

Relationship between trade and international violence

• *Fisher and Malloy, Chapter X, Trade and Developing Nations

• *Pearson, Charles, United States Trade Policy: A Work in Progrress, Chapter 6, “The Allure of Preferential Trade”

Ninth Class-FEKETE—November 2, 2011 The Challenge of Multilateral Trade Negotiations: Will the Doha Round Succeed?

Basic principles of the WTO system, To the heart of the WTO From GATT to WTO (3 videos found at http://www.wto.org/english/res_e/webcas_e/webcas_e.htm)

Each person shall deliver an oral report to the class of no longer than 10 minutes on the WTO Agreement assigned. In addition, an outline of the report (no longer than 2 pages) should be prepared for distribution to the class. Both time and page length requirements will be strictly enforced, to encourage students to present their ideas in a succinct manner. Students should attempt to discuss the following issues: 1) what does the agreement do? 2) why was the agreement necessary? 3) what is the importance of the agreement to the trading system? 4) what is the impact of the agreement on developed versus developing countries 1. Agreement establishing the World Trade Organization

2. Agreement on Agriculture

3. Agreement on the Application of Sanitary and Phytosanitary Measures

4. Agreement on Textile and Clothing

5. Agreement on Technical Barriers to Trade

6. Agreement on Trade-Related Investment Measures

7. Agreement on Implementation of Article VI of GATT 1994 (Antidumping Code)

8. Agreement on Implementation of Article VII of GATT 1994 (Customs Valuation)

9. Agreement on Pre-shipment Inspection

10. Agreement on Rules of Origin

11. Agreement on Import Licensing Procedures

12. Agreement on Subsidies and Countervailing Measures

13. Agreement on Safeguards

14. General Agreement on Trade in Services (GATS)

15. Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods

16. Understanding on Rules and Procedures Governing the Settlement of Disputes

• Malawer, Stuart, WTO Law, Litigation & Policy - Sourcebook of Internet Documents. Wm. S. Hein & Co.,, 2007.

 The WTO in Brief: http://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm

Tenth Class—FEKETE—November 9, 2011 The Challenge of Regional Economic Integration

 http://wto.org/english/tratop_e/region_e/region_e.htm

• NAFTA

 http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade- agreement-nafta

 http://export.gov/FTA/nafta/index.asp • AFRICA

East African Commission

 http://www.eac.int/home.html

 http://www.africa-union.org/root/au/recs/eac.htm

Eleventh Class—FISHER—Novmember 16, 2011 The Challenge to American Intellectual Property in the World Marketplace

• *Fisher and Malloy, Chapter XIII, The Territorial Structure of Intellectual Property Rights

• *Fisher and Malloy, Chapter XIV, The International Licensing of Technology and Associated Antitrust Issues

• *Agreeement on Trade Related Intellectual Property, WTO, 1994, Bhala, pp. 567-602

Twelfth Class—FEKETE—November 30, 2011 Trade Sanctions and Export Controls

 Foreign Government Practices Act (FCPA) Read

 http://www.justice.gov/criminal/fraud/fcpa/

 http://www.fcpaenforcement.com/explained/explained.asp

 http://www.washingtonpost.com/business/economy/us-firms-say-costly-foreign-bribe-law- lacks-clarity/2011/07/05/gIQAB50jTI_story.html

• *Fisher and Malloy, Chapter XII, The Use of Trade Controls for Political Purposes

Thirteenth Class—FISHER—December 7, 2011 The International Financial Architecture

• *Morris Goldstein, “The International Financial Architecture,” Chapter 12 in Bergsten, C. Fred, The United States and the World Economy

• *Stiglitz, Joseph, Globalization and Its Discontents, 2002.

• Bergsten, C. Fred and Williamson, John, eds., Dollar Overvaluation and the World Economy, Institute for International Economics, 2003. Class Materials

Part 1 - Regulation of International Trade

• Chapter 1 - Introduction (PDF) 36 Pages

• Chapter 2 - The Law of International Trade and Investment - (PDF) 69 pages

• Chapter 3 - Regulation of International Trade: The Institutions - (PDF) 120 pages

• Chapter 4 - Relief from Fairly Priced Foreign Competition - (PDF) 114 pages

• Chapter 5 - Antidumping Duties - (PDF) 64 pages

• Chapter 6 - Subsidies and Countervailing Duties - (PDF) 60 pages

• Chapter 9 - Dispute Resolution and Enforcement - (PDF) 166 pages

• Chapter 13 - The Use of Trade Controls for Political Purposes - (PDF) 54 pages

Part 2 - Technology in International Commerce

• Chapter 15 - The Territorial Structure of Intellectual Property Rights - (PDF) 62 pages

• Chapter 16 - The International Licensing of Technology and Associated Antitrust Issues - (PDF) 46 pages

Part 3 - Regulating International Investment

• Chapter 17 - Capital Transfers - (PDF) 65 pages

• Chapter 18 - Investor Nation Regulation of Portfolio Investment- (PDF) 72 pages

• Chapter 19 - Regulating the Multinational - (PDF) 102 pages

• Chapter 20 - Investment Disputes - (PDF) 63 pages

Supplementary Online Resources

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• http://www.worldtradelaw.net

• http://www.global-trade-law.com

• http://www.internationaltraderelations.com • http://www.law.georgetown.edu/iiel/