US Trade Policies in a Changing World Economy
This collection of original essays focuses on issues of international trade and trade policy in a world that is undergoing structural adaptation in the face of a serious increase in the US trade deficit. It brings a new consolidation of analytical perspective to a wide variety of current trade policy issues.
Alan V. Deardorff and Robert M. Stern discuss developments in trade and protectionism, review the case for free trade and address the arguments in favor of trade intervention. Rudiger Dornbusch and Jeffrey Frankel analyze the macroeconomic setting in which changes have been made in US tariffs and NTBs.
Stephen P. Magee and Leslie Young develop a model of endogenous protection and use it to search for microeconomic and macroeconomic variables that may help to explain changes in tariff and nontariff protection in the US since 1900. Paul Krugman takes up the question of identifying strategic sectors and the extent to which international competition and national government policies may affect the returns to such sectors under conditions of imperfect competition or when externalities are present. Avinash Dixit analyzes the responses that the US might make to other countries' trade policies in terms of how these policies affect US real national income and national security. He concludes that the US could use strategic advance responses to alter other countries' trade policies in a mutually beneficial way.
Richard N. Cooper evaluates trade policy as foreign policy by looking at changes through three periods of US history. T.N. Srinivasan scrutinizes the national defense argument for government intervention in foreign trade. John H. Jackson in discussing alternative negotiation approaches for the conduct of US trade policies observes that the pursuit of multilateralism may be frustrating and that what may be needed instead is a "minilateral" approach to trade liberalization. In conclusion, W. Max Corden offers a package of rules that he believes may be both desirable and possible for the international trading system to attain.
"Bob Stern and his fellow authors have produced a book that should be particularly helpful to the Congress as it grapples with the huge trade deficit. But the book is much more than a statement of well-known economic principles. It breaks new ground in a variety of fields and will be useful to thoughtful students of international economics."
—Alfred Reitman, Senior Fellow in International Economics, Congressional Research Service
"This good collection of papers reflects the continuing efforts of economists to come to grips with a trading world not fully covered by classical theory."