Discussions of Assigned Peasantry (not the King) Readings

1. Gresser, “Toughest on the Poor”

• What is the thesis of this article subtitled “America’s Flawed Tariff System?

• For dozens of products that are very important to the poor – “sneakers, spoons, bicycles, underwear, suitcases, drinking glasses, T-shirts, plates, and more– tariffs of 8-30 percent are neither aberrant nor temporary.” (p. 19)

1. Gresser, “Toughest on the Poor”

• “Tariff policy, without any deliberate intent, has evolved into something astonishingly tough on the poor. Young single mothers buying cheap clothes and shoes no pay tariff rates five to ten times higher than middle-class or rich families pay in elite stores.” (p. 19)

1. Gresser, “Toughest on the Poor”

• But I thought industrial U.S. industrial imports (maybe with the exception of steel) were already low?

• They are, but for light consumer goods, the story is different!

1. Gresser, “Toughest on the Poor”

• Is this thesis something new? Why didn’t Ricardo think of it?

1. Gresser, “Toughest on the Poor”

• This is terrible! Why can’t we learn from Europe?

• See p. 13. Europe is no better.

1. Gresser, “Toughest on the Poor”

• What can we do about it?

• We need the political will to do the right thing. Lead out in the world on scrapping the tariffs on these consumer goods. We should negotiate them down in other countries as well.

3. Schelling, “What Makes Greenhouse Sense”

• Schelling’s initial position on the Kyoto Protocol is a common one. What is it?

3. Schelling, “What Makes Greenhouse Sense”

• Schelling’s initial position is that it couldn’t have worked. (pp. 37-39)

• The U.S. couldn’t have made the reductions Clinton promised, especially after he did nothing to sell the idea to senate ratifiers for three years.

• Huge uncertainties. How much carbon dioxide can safely be emitted over the coming century.

3. Schelling, “What Makes Greenhouse Sense”

• Schelling’s initial position is that it couldn’t have worked. (pp. 37-39)

• Decades of investment are needed.

• No consensus on how much total emissions should be allowed for the coming century, which prohibits any scheme of fixed quotas, including emissions trading.

3. Schelling, “What Makes Greenhouse Sense”

• The Kyoto protocol’s focus on the short run neglected the crucial importance of expanding worldwide research and development of technologies to make severe reductions feasible later in the century.

3. Schelling, “What Makes Greenhouse Sense”

• What is President Bush’s position on the Protocol?

• Concern that the developing countries have made clear they don’t intend to participate. The Senate earlier had resolved that they must.

• Immense uncertainty about the likely extent of climate change and its impact on society.

• Preference for voluntarism (domestically or internationally?)

3. Schelling, “What Makes Greenhouse Sense”

• What is President Bush’s position on the Protocol?

• The US government has a strong aversion to any commitment it does not think it will keep. Neither the US nor the other major developed countries will likely accept serious sanctions for missing emissions targets. (p. 40)

3. Schelling, “What Makes Greenhouse Sense”

• What trajectory does Schelling see for carbon dioxide emissions in the future?

• The long term is the Kyoto weakness. A logical trajectory would see decades of slow emissions decline (while investments are made), then rapid decline (when they take effect).

3. Schelling, “What Makes Greenhouse Sense”

• What is the situation for and potential role of the developing countries in the globe’s environmental development?

3. Schelling, “What Makes Greenhouse Sense”

• What does Schelling think about the clever scheme of buying and selling emissions rights and quotas?

• What are the problems with emissions trading?– Aesthetically pleasing, but politically

unconvincing.– The regime is subject to continual

renegotiation. Excess means that the negotiations were too soft last time and the excess should be expected to disappear.

– Getting Russia in by a bribe of excess (marketable for revenue) chits.

3. Schelling, “What Makes Greenhouse Sense”

• What can be an effective regime?

• There must be universally recognition of the need to participate.– Marshall Plan– NATO– WTO

3. Schelling, “What Makes Greenhouse Sense”

• What can be an effective regime?– No simple formula, but negotiated “relevant

criteria.” Reciprocal scrutiny and cross-examination

– To get the developing country involved will require aid from the developed participants.

North America's Second DecadeRobert A. Pastor

• Has NAFTA just cost the US jobs, or has it been a positive development for the US?

North America's Second DecadeRobert A. Pastor

• How did 9/11 affect the NAFTA counties?

North America's Second DecadeRobert A. Pastor

• Have their been achievements in NAFTA?

North America's Second DecadeRobert A. PastorAchievements

• “Although both Mexico and Canada attracted considerable new U.S. investment (since NAFTA gave them privileged access to the U.S. market), the percentage of U.S.-owned companies in each country did not increase. (In fact, Canadian investment in the United States grew even faster than did U.S. investment in Canada.) In Mexico, income disparity did worsen, but only because those regions that do not trade with the United States grew much more slowly than those that do; the problem was not NAFTA, but its absence.”

• NAFTA trade growth doubled the world average.

North America's Second DecadeRobert A. Pastor

Achievements• In the 1990s, U.S. exports to Mexico grew

fourfold, from $28 billion to $111 billion, and exports to Canada more than doubled, increasing from $84 billion to $179 billion. Annual flows of U.S. direct investment to Mexico, meanwhile, went from $1.3 billion in 1992 to $15 billion in 2001. U.S. investment in Canada increased from $2 billion in 1994 to $16 billion in 2000; Canadian investment flows to the United States grew from $4.6 billion to $27 billion over the same period. Travel and immigration among the three countries also increased dramatically

North America's Second DecadeRobert A. Pastor

• Major integration challenges remaining

• First, NAFTA was silent on the development gap between Mexico and its two northern neighbors, and that gap has widened. Second, NAFTA did not plan for success: inadequate roads and infrastructure cannot cope with increased traffic. The resulting delays have raised the transaction costs of regional trade more than the elimination of tariffs has lowered them. Third, NAFTA did not address immigration, and the number of undocumented workers in the United States jumped in the 1990s from 3 million to 9 million (55 percent of whom came from Mexico).

North America's Second DecadeRobert A. Pastor

• Major integration challenges remaining.

• Fourth, NAFTA did not address energy issues, a failure highlighted by the catastrophic blackout that Canada and the northeastern United States suffered last August. Fifth, NAFTA made no attempt to coordinate macroeconomic policy, leaving North American governments with no way to prevent market catastrophes such as the Mexican peso crisis. Finally, NAFTA did nothing to address security -- and as a result, the fallout from September 11 threatens to cripple North American integration.

North America's Second DecadeRobert A. Pastor

• What about trilateral cooperation? How does NAFTA differ from the EU?

• The failure to construct multilateral institutions has been largely deliberate. Canada often thinks that it can extract a better deal from the United States when acting alone (a claim for which there is no evidence). And because Washington is not in a multilateral mood these days, Mexico has been the lone advocate of trilateral cooperation.

North America's Second DecadeRobert A. Pastor

• What about trilateral cooperation? How does NAFTA differ from the EU?

• North America's model has a single dominant state and has always been more market-driven, more resistant to bureaucracy, and more deferential to national autonomy than Europe's;

North America's Second DecadeRobert A. Pastor

• How is the attitude in the three NAFTA countries toward integration?

• Fifty-eight percent of Canadians and 69 percent of Americans feel a "strong" attachment to North America, and, more surprisingly, 34 percent of Mexicans consider themselves "North American," even though that term in Spanish refers specifically to U.S. nationals. Some surveys even indicate that a majority of the public would be prepared to join a North American nation if they believed it would improve their standard of living without threatening their culture. An October 2003 poll taken in all three countries by Ekos, a Canadian firm, found that a clear majority believes that a North American economic union will be established in the next ten years.

• Pastoral spin?

North America's Second DecadeRobert A. Pastor

• What would be gained by integration? What would some of the costs be?

• Better, harmonious border security.

• Less integration pressure from Mexico

• Greater prosperity and North American solidarity. Foreign policy advantage through this example of neighborliness.

• And,?