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Sunday, May 14, 2017

Executive Order 13796: Trade Agreements

What the Executive Order says

Executive Order (EO) 13796 is entitled "Addressing Trade Agreement Violations and Abuses" and has 5 sections.

Section 1

This section defines the administration's policy.  In keeping with the rhetoric from the campaign, it has been repeated over and over again that the trade deals which are currently in place are not equitable and that America has suffered because of these trade deals.  One of the sentences here references that trade deals should "contribute favorably to our balance of trade."  That's not how it works.  Trade deals should contribute to the amount of trade but should be neutral as to the balance of trade.  In an ideal world, every country imports as much as it exports.  For America, we are out of balance importing much more than we export, and this is a problem, however, it has been a problem for 30 or more years and this simple EO will not solve that problem.
There is a description of the "results" of trade policy as was implemented by previous administrations and this is a litany of complaints about the economic decline of the manufacturing industry in America.  It is simplistic to blame the entirety of decline on trade deals.  There are many additional factors involved.

Section 2

This section directs the US trade representative to review all trade agreements with other countries as well as the trade with countries for which no such deals exist and provide a report on how it is going.

Section 3

This section defines the parameters of the report of performance required in section 2, above.  These parameters include documented violations, unfair treatment by trade partners, and situations where the trade agreement has not fulfilled the expected positive economic impact for that trade agreement.    Finally, the report shall also include recommendations on how the issues can be remedied.  The reports are due in 180 days after the date of the EO.

Section 4

This section direct the US trade representative and others to take the recommended action from the reports of performance of the trade agreements.

Section 5

This section includes specific legal statements required to assure that the EO is constitutional.

My Commentary

We have seen this kind of thinking from this administration time and time again in these EO's.  There is an ideological talking point which was distilled into a campaign slogan which was believed on faith.  These points were not debated or argued or examined because of the fact that they were accepted by the President and those with whom he had chosen to surround himself as articles of faith.  Now that the administration is asked as to how they are going to actualize these campaign promises, suddenly there is a need to actually study the question in the context of the regulations, laws, facts and such to see what can be done without actually just breaking the system and causing everyone to lose everything.
In a few cases, there are specific legislative or regulatory recommendations which are given by lobbyists mostly although in a few cases, there have been other policy experts actually inside government who simply had been waiting for the opportunity to advance a long standing project that simply had not been in vogue during the last Democratic administration.
This simply underscores the point that there is no coordinated plan or scheme, everything is reactive, everything was said in a cynical ploy to get votes.  There was never any serious thinking on how the promises could actually be implemented.  There was going to be an EO directing staff to start the process to exit NAFTA as had been promised during the campaign, until it was explained that this would cause an incredible amount of economic pain and result in large job losses.
This EO kicks the can down the road.  It will be interesting to see what the reports in 180 days recommend for action.  If they tell the truth, then good, but if they end up being an exercise in selecting and twisting facts to accommodate pre-conceived notions, then frankly we have to get rid of this administration by any legal means possible.

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