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Sunday, May 14, 2017

Executive Order 13797: Office of Trade and Manufacturing Policy

What the Executive Order says

Executive Order (EO) 13797 is entitled "Establishment of Office of Trade and Manufacturing Policy" and has 4 sections.

Section 1

This section establishes the Office with a Director and staff as determined by members of the Executive Office of the President.

Section 2

This section states that the basic mission of the Office is simply to advise the President on policy that will increase economic growth, decrease the trade deficit, and strengthen the manufacturing base and as a result help American workers.

Section 3

This section describes the Office's responsibilities.  This does not include any really specific on-going programmatic tasks.  It appears logical that the Office might be given tasks to implement actions from the previous EO on trade review (13796) and the text does explicitly reference EO 13788.

Section 4

This section includes the necessary fine print in every EO to assure its constitutionality.

My Commentary

This is just a step and in itself, not good or bad.  It is entirely possible that the President's team could have made decisions during the transition to lead with these kinds of EO's right after inauguration.  It would be possible they could have garnered some goodwill.  Now with the non-specific nature of just restating a goal of making things better for American workers without being specific as to what is going to change, this appears to be at best, belated, and at worst, an attempt to distract from the news of the day.
There is a definite feeling that there was never any concrete policy behind the campaign promises.  In fact there is a paradox behind this issue that is not being addressed by the administration.  In a nutshell, it is this: the changes required to make American manufacturing competitive with that of the places such as China and India mostly come down to paying workers less or raising prices of goods; both choices reduce the purchasing power of American consumers.  There are some arguments about greater overheads and productivity levels, and I will go into that at some time in the future, not here and today.  Nonetheless, to the extent that government has effective tools to address prices of imported goods, trade agreements and tax law are just about the only ones.  It is not like you can mandate productivity increases.
Anyway, my conclusion on this EO is that it is just window dressing for the moment.  Maybe in a year this office will have churned out some substantive and actionable  recommendations and draft legislation and proposed rules, but only time will tell.

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