Rightly or wrongly, some have interpreted Krugman’s recent Nobel address, which has gotten considerable play in Washington, as implying ambivalence about the benefits of trade for the U.S. What does trade theory tell us about the initiatives the US should make a priority in its trade policy agenda?
Based on a review of the academic literature, the Peterson Institute for International Economics estimates that international trade raises US GDP by $1 trillion. Peterson studies also suggest that the US would gain another $1 trillion through further trade liberalization. Are these magnitudes reasonable? What are the most significant sources of US gains from trade from further liberalization?
What does the structure of the Chinese economy (and in particular the prominent role of state-owned enterprises in Chinese production) imply for how the US should negotiate a bilateral investment treaty with the country? In the presence of SOEs, would a conventional BIT serve US interests? Are there supplemental policies that are needed in light of SOEs? Or are China’s SOEs really not that big of a deal?
What are the appropriate tools for enforcement of trade agreements? What are the lessons from game theory on designing enforcement mechanisms?