In January 2018, President Donald Trump announced steep tariffs on solar imports, at once plunging the US solar industry into uncertainty and deeply angering vital trade partners such as China, South Korea, and the European Union. The tariffs were in response to a complaint made by two bankrupt solar companies seeking protection against cheap solar imports. The companies invoked a rarely used provision of the 1974 United States Trade Act, Section 201 (safeguards), and argued that antidumping and countervailing duties imposed on China in 2012 had done little to stem the flow of solar products because Chinese producers had simply moved production to countries such as Malaysia and South Korea, where the duties did not apply. Five years after enduring a series of bruising trade battles, the global solar industry was once again in the eye of a rapidly escalating trade storm. Amid an unprecedented number of trade disputes at the WTO, the role of safeguards had suddenly taken center stage. Yet, the application of safeguards in the global trading system had been historically rife with problems. This case is designed to be taught in follow up to HKS Case 1992.0: Shaping the Future of Solar Power: Climate Change, Industrial Policy and Free Trade.
The Trans Pacific Partnership (TPP)-a massive free trade agreement between the United States, Japan and ten other Pacific nations-was a vital element of US President Barack Obama's trade policy. If completed, the TPP would be the largest regional trade agreement in history, accounting for 40 percent of the global economy, and nearly one-third of global trade. In 2015, after five years of negotiations the TPP countries were close to agreement. But one major obstacle remained. US President Barack Obama had not yet received Trade Promotion Authority (formerly known as fast track)-a legislative measure that gave the President the authority to present a finalized trade agreement for an up or down vote in the U.S. Congress. In the Spring of 2015, the White House had just a few short weeks to secure fast track, before the next scheduled round of TPP negotiations, and before the US Congress recessed for the summer. But if the past was any guide, Obama was about to face a bruising battle with Congress, where the TPP had already proved divisive. A large swath of Obama's own Democratic caucus was vociferously against the trade agreement. Most Republicans on the other hand, welcomed the TPP. Just as President Bill Clinton had done in the 1990s, Obama would have to forge an uncomfortable alliance with some of his fiercest opponents in the Republican Party to ensure the survival of his ambitious trade agenda. In doing so he would have to confront fellow Democrats, who were being lobbied heavily by labor unions and consumer groups to vote against Trade Promotion Authority. Case number 2095.0
Many Americans blame free trade for their nation's economic slide, but the authors' research shows that free trade has been assigned a villainous role that far exceeds its real impact. The evidence exposes three myths. Myth 1: "America's open trade policy is the main cause of job losses, especially in manufacturing." The real drivers of the losses: rising productivity growth in U.S. manufacturing and a shift in demand away from goods in favor of services. Myth 2: "U.S. living standards are falling and wage inequality is rising because developing countries compete with the U.S. in its export markets on cost." The truth is that the U.S. and developing countries have specialized in very different products and processes, making the latter complementary to America's growth. Myth 3: "The rapid growth of emerging markets like China and India is the most important reason for the higher oil prices that hurt Americans." The primary responsibility for the shortfall between demand and supply that has caused oil prices to soar rests with developed countries, which contributed to most of the price increase from 2000 to 2008. The authors advocate a more active U.S. trade policy that emphasizes exports, bilateral cooperation with other economies to maintain a trading order that supports U.S. economic interests, and plurilateral agreements with WTO members on issues such as competition policy.
This is an abridged version of case NR15-04-1736.0. The Agreement on Trade-Related Intellectual Property (TRIPS) at the World Trade Organization (WTO) was the most comprehensive and far-reaching international agreement on intellectual property rights ever made. Perhaps the most widely discussed TRIPS-related issue was the debate over the impact of the agreement on efforts to improve public health in the developing world. Some developing countries held that TRIPS patent rules prevented them from having access to essential medicines, concerns that were intensified by the dramatic rise in the incidence of HIV/AIDS. Nonprofits such as Doctors without Borders accused drug companies of putting "patents over people." Negotiations ensued at the WTO to address these concerns. HKS Case Number 1736.3
This case traces the development of genetically-modified (GM) foods in the United States and in Europe. The US had from the start a commanding lead in GM food developmentand a correspondingly large stake in global acceptance of GM seeds and foods. The case describes evolving and contrasting US and European consumer attitudes toward GM foods, a general acceptance in the US, versus a worried rejection in Europe. The case discusses how US government and corporate leaders were convinced at first that Europe was indulging in protectionist activity, but came over time to understand that the European reaction was mostly consumer-driven and derived from citizens' suspicion of government's ability to understand and regulate scientific discoveries sufficiently to protect public health. Still, US food corporations were alarmed when in 2002 Zambia refused to accept desperately-needed US food aid on the grounds that US-made GM products might preclude Zambia selling its own produce to Europe. HKS Case Number 1832.0
The Agreement on Trade-Related Intellectual Property (TRIPS) at the World Trade Organization (WTO) was the most comprehensive and far-reaching international agreement on intellectual property rights ever made. Perhaps the most widely discussed TRIPS-related issue was the debate over the impact of the agreement on efforts to improve public health in the developing world. Some developing countries held that TRIPS patent rules prevented them from having access to essential medicines, concerns that were intensified by the dramatic rise in the incidence of HIV/AIDS. Nonprofits such as Doctors without Borders accused drug companies of putting "patents over people." Negotiations ensued at the WTO to address these concerns. HKS Case Number 1736.0
Two arguments against low trade barriers - that U.S. manufacturing is bound to lose out to places like Korea and Taiwan because they pay rock-bottom wages, and to Japan and other aggressive foreign competitors because they help favored industries with subsidies - don't stand up to the facts. The United States imports less from low-wage countries now than it did in 1960; protection levels haven't changed much since 1981, the year the United States last had a surplus in manufactured goods. What is at the bottom of our massive trade deficit? The huge gap between our production and our spending, fueled largely by the enormous federal budget deficit.