Senator Warren's Economic Patriotism plan

I come from a patriotic family. All three of my brothers joined the military. And I'm deeply grateful for the opportunities America has given me. But the giant "American" corporations who control our economy don't seem to feel the same way. They certainly don't act like it.

Sure, these companies wave the flag — but they have no loyalty or allegiance to America. Levi's is an iconic American brand, but the company operates only 2% of its factories here. Dixon Ticonderoga — maker of the famous №2 pencil — has "moved almost all of its pencil production to Mexico and China." And General Electric recently shut down an industrial engine factory in Wisconsin and shipped the jobs to Canada. The list goes on and on.

These "American" companies show only one real loyalty: to the short-term interests of their shareholders, a third of whom are foreign investors. If they can close up an American factory and ship jobs overseas to save a nickel, that's exactly what they will do — abandoning loyal American workers and hollowing out American cities along the way.

Politicians love to say they care about American jobs. But for decades, those same politicians have cited "free market principles" and refused to intervene in markets on behalf of American workers. And of course, they ignore those same supposed principles and intervene regularly to protect the interests of multinational corporations and international capital.

The result? Millions of good jobs lost overseas and a generation of stagnant wages, growing inequality, and sluggish economic growth.

If Washington wants to put a stop to this, it can. If we want faster growth, stronger American industry, and more good American jobs, then our government should do what other leading nations do and act aggressively to achieve those goals instead of catering to the financial interests of companies with no particular allegiance to America.

It's not a question of more government or less government. It's about who government works for.

That's why today I'm announcing that, as President, I would pursue an agenda of economic patriotism, using new and existing tools to defend and create quality American jobs and promote American industry.

My Administration will pursue fundamental, structural changes in our government's approach to the economy, finally putting American workers and middle-class prosperity ahead of multinational profits and Wall Street bonuses.

In the weeks ahead, I'll be releasing longer individual plans on how economic patriotism should shape our approach to specific parts of the American economy, from trade policy to Wall Street. All of these proposals will share this common vision for economic policymaking in America.Today I'm also releasing the first specific example — a plan for American manufacturing.

But first, let me explain how economic patriotism works.

An End to the Excuses

It's time to reject the excuses we've heard for decades about why we can't do more to help American workers.

Some people blame "globalization" for flat wages and American jobs shipped overseas. But globalization isn't some mysterious force whose effects are inevitable and beyond our control. No — America chose to pursue a trade policy that prioritized the interests of capital over the interests of American workers. Germany, for example, chose a different path and participated in international trade while at the same time robustly — and successfully — supporting its domestic industries and its workers.

Others blame "automation" for American job losses, especially in manufacturing. It's a good story — robots and other new technologies made American manufacturing workers more productive, so companies needed to hire far fewer actual human beings. A good story, except it's not really true. Recent research finds this story is based on a widely-held misunderstanding of the data on American manufacturing output, and a statistical quirk about how productivity is measured in our computer industry. There is actually no "evidence that productivity caused manufacturing's relative and absolute employment decline" in America since the 1980s. Meanwhile, Germany has nearly five times as many robots per worker as we do and has not lost jobsoverall as a result.

And a lot of people blamed a supposed "skills gap" for job losses — that American workers lacked the skills or credentials they needed to fill the jobs available. Except that wasn't true either. It was just a symptom of high unemployment rates. Companies felt comfortable demanding more skills from workers as an excuse to be more selective about which workers to hire.

The truth is that Washington policies — not unstoppable market forces — are a key driver of the problems American workers face. From our trade agreements to our tax code, we have encouraged companies to invest abroad, ship jobs overseas, and keep wages low. All in the interest of serving multinational companies and international capital with no particular loyalty to the United States.

In my administration, we will stop making excuses. We will pursue aggressive new government policies to support American workers. And we will start with two major changes:

• Aggressively using all of our tools to defend and create American jobs. The prevailing view in Washington — from both political parties — has been that our government should not aggressively intervene in the markets to boost American workers. (This "rule" goes out the window when it comes to subsidizing Wall Street and multinational corporations.) We have tried that approach, and it has failed spectacularly. From our own experience and the experience of other countries, we know what types of government actions actually work to promote sustainable job growth and industrial development. It's time to have the courage to pick up the tools we have and use them.
• Consolidating existing government programs that affect job creation into a new agency with the sole responsibility to create and defend quality, sustainable American jobs. The new Department — the Department of Economic Development — will replace the Commerce Department, subsume other agencies like the Small Business Administration and the Patent and Trademark Office, and include research and development programs, worker training programs, and export and trade authorities like the Office of the U.S. Trade Representative. The new Department will have a single goal: creating and defending good American jobs.

Aggressive Intervention on Behalf of American Workers

If we can aggressively intervene in markets to protect the interests of the wealthy and well-connected — as we have for decades with bailouts and subsidies — then we can damn well use all the tools at our disposal to protect the interests of American workers. That's why we should use a variety of more aggressive tactics, including:

• More actively managing our currency value to promote exports and domestic manufacturing. One of the most important factors in our trade deficit and our weak export levels is the value of our currency. Other countries have actively managed the value of their currency to boost exports and develop their domestic industries. And foreign investors and central banks have driven up the value of our currency for their own benefit. We should consider a number of tools and work with other countries harmed by currency misalignment to produce a currency value that's better for our workers and our industries.
• Leveraging federal R&D to create domestic jobs and sustainable investments in the future. We spend only half as much as we did in the 1980s on federal research and development. Meanwhile, when American taxpayers do invest in R&D, we often see American companies take that research and use it to manufacture products overseas, like Apple did with the iPhone. The companies get rich, and American taxpayers have subsidized the creation of low-wage foreign jobs. Othercountries have adopted different approaches to public R&D funding that have produced strong outcomes for the economy and for taxpayers. Learning from these approaches, my administration will substantially increase our investments in R&D, but with three critical new conditions:
• Production stemming from federally funded research should take place in the United States. If taxpayer investments in R&D lead to new ideas and products, those products should be made here. The federal government already includes this requirement in some of its programs, but it should be a standard requirement, absent truly extraordinary circumstances.
• Taxpayers should be able to capture the upside of their research investments if they result in profitable enterprises. Like any investor, taxpayers should get a return on the risky investments they are making in R&D. That can take various forms. Taxpayers can: get an equity stake in any company that relies on intellectual property these investments create; retain royalties on publicly funded innovation or a golden-share of the patent revenue; or require the companies benefitting from publicly funded R&D to reinvest profits back into domestic production, R&D, and worker training programs, rather than into stock buybacks.
• R&D investments must be spread across every region of the country, not focused on only a few coastal cities. There are talented Americans in every part of the country, but too often cities and towns experience brain drain and shrink because corporations move jobs and opportunities overseas or to a small handful of American cities. We must allocate R&D funding across the country, to ensure that there are economic opportunities in every region and that funding is targeted at solving regional problems.
• Increasing export promotion to match the efforts of our competitors. In 2017, our main export promotion agency, the Export-Import Bank, provided $200 million in total medium- and long-term financing to support American exports. China's equivalent agency provided more than a hundred times as much support, while Germany's agency provided more than thirty times as much support. We must spend more to boost American exports so we can level the playing field for American workers. And while historically a large chunk of the Export-Import Bank's support has gone to a handful of big companies, our export promotion should focus more on smaller and medium-sized businesses.
• Deploying the massive purchasing power of the federal government to create markets for American-made products. The federal government spends hundreds of billions of dollars each year to purchase goods and services. We should require whenever possible for the government to purchase American-made products, and use large federal procurement commitments as a tool to create demand for new American-made goods and to develop particular domestic industries.
• Restructuring worker training programs to deliver real results for American workers and American companies. Nearly half of the German workforce has graduated from a post-secondary apprenticeship program, which gives people access to good jobs without a four-year college education and provides German companies with a steady stream of capable workers. We should take aggressive steps to overhaul our worker training programs so they produce better results for American workers and companies.
• Dramatically scale up apprenticeship programs. We currently invest $200 million annually in apprenticeship programs. We should increase that tenfold and make a $20 billion commitment to apprenticeship programs for the next ten years. These efforts should bring together community colleges, technical schools, unions, and companies.
• Institute new sectoral training programs. We should also create sectoral training programs — a model that has been successful in Wisconsin. These local or regional sector training partnerships would help align training with the local job market, leverage the community college system, and, by designing training based on an entire sector, ensure that workers gain skills that are transferable across employers.

Economic patriotism is about using all the tools we have to boost American workers and American industries so they have the best opportunity to compete internationally. While those tools can include certain things like tariffs, our principal goal should be investing in American workers rather than diminishing our competitors. If our workers are on a level playing field, I know they can take on any challenger and win.

The Department of Economic Development

Our international competitors like China, Germany, and Japan develop concrete plans for promoting domestic industry and then make serious investments to achieve their goals. China's Made in China 2025 plan aims to dominate advanced manufacturing in the coming decades using various incentives and "hundreds of billions of euros" in subsidies. Germany and Japan have also developed plans that identify long-term goals for domestic production and put real money behind achieving them.

This is a pretty straightforward idea. But outside of the defense context, the United States has nothing remotely like it.

Government programs that affect job creation are an afterthought, uncoordinated and scattered across the government, and submerged in larger agencies with different primary missions:

• There are 58 programs in 11 federal agencies that provide support to American manufacturing — all of them tacked on to the primary missions at those agencies.
• There are at least nine offices in five different agencies primarily responsible for trade policy and export promotion.
• And there are 47 different employment and training programs spread across nine different federal agencies.

Even worse, there are some government agencies that undermine sustainable American jobs. For example, the Office of the United States Trade Representative — whose mission is to negotiate trade deals on behalf of America — is captured by the interests of corporate executives and lobbyists. Its actions across Administrations demonstrate a deep ideological opposition to anything that might put the interests of American workers above the interests of multinational corporations or Wall Street.

We should put all of these offices and programs in the same place, get rid of the ones that are redundant or don't work, and bring the rogue ones to heel — to make it clear that the unified mission of the federal government is to promote sustainable, middle-class American jobs.

That's why I'm proposing the creation of a new agency — the Department of Economic Development — that will have the single goal of defending good-paying American jobs and creating new ones.

The Department will be responsible for creating a National Jobs Strategy (NJS) every four years, just as countries like Germany and China produce regular strategic plans. The NJS will be a long-term plan that examines the worldwide economic environment and identifies new risks and opportunities. It will focus not just on the overall American economy, but on regional economies. It will examine trends that have disproportionate effects on rural communities and smaller cities. And it will establish clear goals for American jobs and American industry that will guide how the Department of Economic Development prioritizes its investments and direct its programs.

Critically, all of our trade-related programs will fall within the new Department. By placing our trade programs within this new Department, we will make clear that trade policy must defend and create American jobs.

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It's becoming easier and easier to shift capital and jobs from one country to another. That's why our government has to care more about defending and creating American jobs than ever before — not less. We can navigate the changes ahead if we embrace economic patriotism and make American workers our highest priority, rather than continuing to cater to the interests of companies and people with no allegiance to America.

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John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

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Warren on Trade

Last month, I released my economic patriotism agenda — my commitment to fundamentally changing the government's approach to the economy so that we put the interests of American workers and families ahead of the interests of multinational corporations. I've already released my ideas for applying economic patriotism to manufacturing and to Wall Street. This is my plan for using economic patriotism to overhaul our approach to trade.

For decades, big multinational corporations have bought and lobbied their way into dictating America's trade policy. Those big corporations have gotten rich but everyone else has paid the price. We've lost millions of jobsto outsourcing, depressed wages for American workers, accelerated climate change, and squeezed America's family farmers. We've let China get away with the suppression of pay and labor rights, poor environmental protections, and years of currency manipulation. All to add some zeroes to the bottom lines of big corporations with no loyalty or allegiance to America.

We need to completely transform our approach to trade. America enters into trade negotiations with enormous leverage because America is the world's most attractive market. As President, I won't hand America's leverage to big corporations to use for their own narrow purposes — I'll use it to create and defend good American jobs, raise wages and farm income, combat climate change, lower drug prices, and raise living standards worldwide. We will engage in international trade — but on our terms and only when it benefits American families.

A New Approach to Trade

My plan is a new approach to trade — one that is different from both the Washington insider consensus that brought us decades of bad trade deals and from Donald Trump's haphazard and ultimately corporate-friendly approach.

Unlike the insiders, I don't think "free trade" deals that benefit big multinational corporations and international capital at the expense of American workers are good simply because they open up markets. Trade is good when it helps American workers and families — when it doesn't, we need to change our approach. And unlike Trump, while I think tariffs are an important tool, they are not by themselves a long-term solution to our failed trade agenda and must be part of a broader strategy that this Administration clearly lacks.

To ensure that American families benefit from international trade in the decades to come, I want to invest in American workers and to use our leverage to force other countries to raise the bar on everything from labor and environmental standards to anti-corruption rules to access to medicine to tax enforcement. If we raise the world's standards to our level and American workers have the chance to compete fairly, they will thrive — and millions of people around the world will be better off too.

Achieving this vision isn't about tough talk or tweets. We must do the hard work of transforming every aspect of our current approach to trade: from our negotiating process to the negotiating objectives we pursue to the way we enforce agreements. That's what I intend to do.

A Trade Negotiation Process that Reflects America's Interests

Our current approach to negotiating trade agreements works great for the wealthy and the well-connected. The negotiating text is kept confidentialfrom all but a small set of advisory groups comprised mostly of corporate executives and industry trade group representatives. Once those corporate interests are finished whispering in the ears of our negotiators, the completed text is released. Then, under the expedited "Fast Track" procedure Congress typically uses to approve trade agreements, our elected representatives must vote up or down on the agreement with no ability to propose and secure any changes to it. Meanwhile, the negotiators who constructed it often breeze through the revolving door to take jobs with the corporations whose interests underlie the deal.

This is undemocratic and obviously corrupt. In a Warren Administration, we will negotiate and approve trade agreements through a transparent process that offers the public a genuine chance to shape it:

• Trade negotiators will publicly disclose negotiating drafts and provide the public with an opportunity to comment. When federal agencies write new rules, they typically must publish a proposed version of the rule and permit the public to submit comments on it. I will adopt a similar approach for our trade deals. Prior to negotiations, our negotiators will publish a draft of their proposals in the Federal Register, let the public offer comments on the draft, and take those comments into consideration during negotiations. And then as talks proceed, they will publish drafts of the negotiating texts so the public can monitor the negotiations.
• Trade advisory committees will prioritize the views of workers and consumers. I will ensure that there are more representatives from labor, environmental, and consumer groups than from corporations and trade groups on every existing advisory committee. And I'll expand the current list of advisory committees to create one for consumers, one for rural areas, and one for each region of the country, so that critical voices are at the table during negotiations.
• The US International Trade Commission will provide a regional analysis of the economic effects of a trade agreement. Trade agreements can hollow out communities and transform regional economies. Yet the report the ITC provides before Congress considers a trade agreement only includes a nationwide analysis of a trade deal's economic impact. I will push for the agency to provide a region-by-region analysis so the public and Members of Congress can understand how an agreement is likely to affect the places they live and represent.
• The congressional approval process will offer more opportunities for the public and elected representatives to shape trade agreements. I will seek expedited congressional approval of trade agreements only when every regional advisory committee and the labor, consumer, and rural advisory committees unanimously certify that the agreement serves their interests. I will also expand the list of congressional committees that must review any agreement before it is eligible for expedited consideration.

Together, these changes will ensure that our negotiations reflect the views of American families, not corporate interests.

Using Our Leverage to Demand More for American Families and to Raise the Global Standard of Living

While a better process will produce better agreements, we also must fundamentally shift the goals of our trade agenda so they are aligned with the interests of America's families.

With certain important exceptions, we live in a low-tariff world. Modern trade agreements are less about the mutual reduction of tariffs and more about establishing regulatory standards for everything from worker rights to pollution to patent protections.

My approach to trade reflects that reality. For too long, we have entered into trade deals with countries with abysmal records on labor, environmental, and human rights issues. In exchange for concrete access to the American market, we get vague commitments to do better, which we then hardlyenforce. The result is that millions of people in our trading-partner countries don't gain the benefits of higher standards — and companies can easily pad their profits by shifting American jobs to countries where they can pay workers next to nothing and pollute the air and water freely.

That will end under my Administration. I am establishing a set of standards countries must meet as a precondition for any trade agreement with America. And I will renegotiate any agreements we have to ensure that our existing trade partners meet those standards as well.

My preconditions are that a country must:

• Recognize and enforce the core labor rights of the International Labour Organization, like collective bargaining and the elimination of child labor.
• Uphold internationally recognized human rights, as reported in the Department of State's Country Reports on Human Rights, including the rights of indigenous people, migrant workers, and other vulnerable groups.
• Recognize and enforce religious freedom as reported in the State Department's Country Reports.
• Comply with minimum standards of the Trafficking Victims Protection Act.
• Be a party to the Paris Climate agreement and have a national plan that has been independently verified to put the country on track to reduce its emissions consistent with the long-term emissions goals in that agreement.
• Eliminate all domestic fossil fuel subsidies.
• Ratify the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
• Comply with any tax treaty they have with the United States and participate in the OECD's Base Erosion and Profit Shifting project to combat tax evasion and avoidance.
• Not appear on the Department of Treasury monitoring list of countries that merit attention for their currency practices.

A country should only be considered an acceptable partner if it meets these basic standards. Shamefully, America itself does not meet many of these labor and environmental standards today. I am committed to fixing that as President. And to help bring other countries up to these standards, I'll revitalize our commitment to providing technical assistance to help countries improve.

I will also go beyond these minimum standards in key areas to promote the interests of American workers and families.

Labor. I will ensure trade agreements protect Buy American and other programs designed to develop local industry, contain strong rule-of-origin standards to promote domestic manufacturing, protect worker pensions, promote equal pay for equal work for women, and prohibit violence against workers. Unlike previous trade deals agreements that have put labor standards in side agreements that are difficult to enforce, I will make labor standards central to any agreement.

Climate Change and the Environment. Climate change is real, it's man-made, and we're running out of time to address it. America should be leading this fight, but we have turned our backs on our responsibilities — withcommunities of color in the U.S. and developing countries bearing a disproportionate amount of the harm.

Trump is moving us in the wrong direction — withdrawing from the Paris Climate Accord, renegotiating NAFTA without even a mention of climate change, and handing special carve outs to oil and gas companies.

Beyond requiring implementation of the Paris Climate accord and the elimination of fossil fuel subsidies as preconditions for any trade agreement, I have already proposed a Green Marshall Plan to dedicate $100 billion to helping other countries purchase and deploy American-made clean energy technology.

But we must do more. I will push to secure a multilateral agreement to protect domestic green policies like subsidies for green products and preferential treatment for environmentally sustainable energy production from WTO challenges. And because big corporations will move their production to the countries with the weakest greenhouse gas emissions standards — undermining global efforts to address climate change and penalizing countries that are doing their part — I will impose aborder carbon adjustment so imported goods that these firms make using carbon-intensive processes are charged a fee to equalize the costs borne by companies playing by the rules.

Prescription Drugs. Last year, Americans spent more than $500 billion on prescription drugs. That's a 50% increase since 2010. Nearly 3 in 10Americans report not taking their medicine as directed because of costs. And yet, one of the core elements of America's current trade agenda is guaranteeing pharmaceutical firms monopoly protections so they can avoid competition from generic drugs — driving up costs and reducing access to necessary medicine abroad, and undermining our efforts to reduce drug prices here at home. That's exactly what the Trump Administration has done as part of their failed effort to renegotiate NAFTA.

While medical innovation is important, there is no link between extremely long exclusivity periods and pharmaceutical innovation. These are giveaways to drug companies, plain and simple, which allow them to maintain ludicrously high drug prices.

As President, I will fight to bring down the costs of prescription drugs here and around the world. I will never use America's leverage to push another country to extend exclusivity periods for prescription drugs. I will support efforts to impose price controls on pharmaceuticals. And I will actively seek out opportunities to reduce exclusivity periods in our existing trade deals in exchange for securing other changes that will help America's working families.

Agriculture. For decades, trade deals have squeezed family farmers, with Black farmers losing their land particularly quickly. Between the trade fights incited by Trump's haphazard tariffs and a series of natural disasters, America's farmers are now facing the worst crisis in almost 40 years. They are also facing unprecedented levels of uncertainty and instability. Trump's tariffs have reduced crop prices, threatened farmers already operating on razor-thin margins, and opened up new non-American markets against which our farmers are now forced to compete. Like trade deals of the past, Trump's NAFTA 2.0 is written to help giant multinational agribusinesses at the expense of family farms, and it will do nothing to solve the newly created market insecurity Trump's tariffs have caused.

As President, I will fight for trade agreements that reward American farmers for their hard work by negotiating for fair prices for goods, breaking up the monopolies in grain trading and meat packing, and protecting domestic markets to create stability for America's family farms. And I will impose Country-of-Origin Labeling rules to protect American producers and provide transparency to consumers.

Consumer protection. We must ensure that the food we eat is high-quality and safe. But our trade agreements have limited safety standards and the inspection of imported foods, while simultaneously enabling a new flood of food imports that overwhelm food safety inspectors. In my Administration, our trade pacts will require imported food to meet domestic food safety standards, including enhanced border inspection requirements.

As with imported food, our current trade deals require us to allow imports of other products and services that do not meet domestic safety and environmental standards. My trade agreements will ensure that imported products and services must meet the same standards as domestic products and services.

Antitrust. We are in an era of massive consolidation across many sectors of the economy. One of the reasons why is that we have a narrow, permissive approach to mergers that looks only at economic efficiency and consumer welfare instead of assessing the impact that a merger will have on competition itself.

In recent years, we have added this problematic standard into trade agreements and proposed it as the defining objective for competition policy in new and renegotiated agreements. Under my administration, we will not propose this standard in any new agreement, and we will work to renegotiate agreements to remove it.

Delivering for American Families with Stronger Enforcement

Our approach to enforcing trade agreements drives down standards worldwide and undermines American families. We offer big corporations fast and powerful methods to enforce the provisions that benefit them but make it nearly impossible for Americans to enforce labor and environmental protections. Foreign governments only fear a challenge to strong rules that might hurt corporate bottom lines, not to weak rules that might not adequately protect workers, the environment, or public health.

I will entirely reorient our approach to enforcement so we drive standards up, not down. I'll start by ending "Investor-State Dispute Settlement," or ISDS, the favorable enforcement approach we offer corporations. Under ISDS, a company that believes that a new law violates some aspect of a trade agreement can skip the courts and challenge the law before an international panel of arbitrators. If the company wins, the panel can order that country's taxpayers to pay out billions in damages — with no review by an actual court. What's worse, the arbitration panels handing out these binding rulings are often made up of corporate lawyers whose day jobs are representing the very same companies that seek judgments before them.

Companies have used ISDS to undermine laws intended to benefit the public interest. A French company challenged Egypt when it increased the minimum wage. A Swedish company challenged Germany when it decided to cut back on nuclear power after the Fukushima disaster. These cases have real effects across the globe: an ISDS panel's decision to hear a challenge that Philip Morris brought against Uruguay's anti-smoking campaign prompted several other countries to abandon similar public health efforts.

As President, I will not include ISDS in any new agreement and will renegotiate existing agreements to remove ISDS from them.

And I'll strengthen our approach to enforcing labor and environmental standards. Unlike a corporation under ISDS, a labor union seeking to enforce labor standards can't bring a claim on its own — it must convince the federal government to bring a claim on its behalf. Even in the face of overwhelming evidence, our government can refuse to act for diplomatic or other unrelated reasons.

As a result, the federal government has only pursued one such claim in the last 25 years. In that one case, the American government, AFL-CIO, and Guatemalan unions spent nine years trying to challenge the Guatemalan government for violating the labor chapter of one of our trade deals because Guatemalan workers were being murdered for trying to join a union. In the end, we lost because the trade agreement required a showing that the violations had affected trade.

I will replace this broken process by creating independent commissions — made up of experts in the area — to monitor potential violations, respond to complaints, and investigate claims. The commissions must review and investigate claims promptly so that claims don't languish for years. If one of these commissions recommends that the United States bring a claim against another country, the United States will be required to do so, without exception.

I will also fix the problem that arose in the Guatemala case by pushing to remove language from our deals that require us to show that a violation of rights was "sustained or recurring" and "affecting trade or investment." A violation is a violation, and I won't let another case like Guatemala happen ever again.

I will strengthen our enforcement approach in other ways as well:

• Under WTO rules, a country designated as a "non-market economy" can face more serious trade penalties. I will push for a new "non-sustainable economy" designation that would allow us to impose tougher penalties on countries with systematically poor labor and environmental practices. We cannot allow countries that treat their workers and the environment poorly to undercut American producers that do things the right way.
• I already have a plan to move the lead American trade negotiator — the Office of the United States Trade Representative — within my new Department of Economic Development. That will ensure that America's trade policy supports our broader economic agenda of defending and creating good American jobs. I will also create a new labor and environment enforcement division at the USTR to more effectively enforce obligations, and embed a labor attache at U.S. embassies to monitor compliance with our labor standards.
• Unlike the current approach that lets our government ignore unfair trade practices, my administration will create automatic triggers to initiate investigations into unfair trade practices. If those investigations produce compelling evidence of a violation, the Department will impose trade remedies immediately until the offenders show they are no longer engaging in an unfair trade practice. These automatic triggers will also apply to violations of labor and environmental standards.
• Finally, when we impose duties to support particular domestic industries, I want to ensure that the money we collect actually goes to American workers, instead of being sucked up by executives and shareholders. I will fight to change our trade laws so that we review duties every six months and lift the duties if companies can't demonstrate the benefits of the duties are going to their workers.

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Trade can be a powerful tool to help working families but our failed pro-corporate agenda has used trade to harm American workers and the environment. My plan represents a new approach to trade — one that uses America's leverage to boost American workers and raise the standard of living across the globe. The President has a lot of authority to remake trade policy herself. When I'm elected, I intend to use it.

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John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

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5 Lessons from China on How to Drive Sustainable Growth [feedly]

A Chinese view...

5 Lessons from China on How to Drive Sustainable Growth
https://www.globalpolicyjournal.com/blog/09/08/2019/5-lessons-china-how-drive-sustainable-growth

Journalists, politicians and regular citizens have spent much time in recent years discussing the 'Chinese dream'. It's our vision of China's journey into the future.

I believe the Chinese dream will see us break the link between growing incomes, rising production and degradation of the environment. Our businesses should continue to grow even as our cities, farmland and entire ecosystems become greener and more sustainable.

Long-term wealth creation should go hand-in-hand with sustainability. Earlier this year, Lyu Jun, Chairman of COFCO Corporation, described how the commercial case for sustainable production is lagging behind the moral one. Since his article was published as part of the World Economic Forum 2019 Annual Meeting, we have been actively demonstrating the commercial value of sustainability.

In July, my company partnered with a consortium of 21 banks to engineer a $2.3 billion loan. Under the terms of this loan, we pay a lower interest rate if we can meet a series of annual targets on sustainability. Any interest saved will be re-invested into initiatives that increase our sustainability performance even further. Sustainability earns us money.

This loan demonstrates some of the keys to sustainable growth. Here are five of them:

1) Finance is emerging as a major driver of sustainability.

Government policy and consumer preferences can certainly shift corporate behaviour, as tariffs on soy have shown. And most consumer-facing businesses are adapting to their customers' preferences for more sustainability.

But I see a more interesting role for the banks, whose influence is immense. The financial sector is shifting quickly towards sustainability as the links to reduced risk and better financial performance become clear. In the first half of this year, the issuance of sustainability-linked loans leapt 63% to $44 billion, as much as in all of 2018. Money talks.

2) Innovation will be part of any solution.

While the public sector has limited funding resources, private investment and capability could play an instrumental role in achieving sustainable agricultural development goals. But current levels are not enough to meet global food security challenges in the long term. Private investors remain reluctant to invest in sustainable agriculture because of the perceived uncertainties and high risks. Furthermore, conventional financing models have their limits, particularly in developing countries where most of the growth in food demand and production will come from.

We need more innovative financing in which public and private sectors can work together, to create the necessary policy and investment environment for private finance in sustainable farming.

We should look at the renewable energy sector for new ideas, where public-private partnerships (PPPs) have successfully delivered mechanisms for pooling public and private financing and risk mitigation.

People may not like change, but they like innovation. People don't like to give things up, but they like to have new options. Innovation is the answer. It is essential to change.

3) Success depends on collaboration. Bringing people on board is a must.

To identify a solution is much easier than to implement it. In theory, everybody wants a more sustainable food system. But not everybody wants or is able to pay the price. That's why sustainable change requires us to bring on board all those who are affected. In order to achieve a sustainable food chain, farmers and producers may need further incentives.

China's sizeable Grain for Green project offered grains, tax and other encouragements so that farmers would protect, instead of clear, their forested slopes.

And agribusinesses will be wise to adopt the same principle. Sustainable farming will only be possible if farmers are on board.

4) China is serious about sustainability.

President Xi has been consistent about the need for green policies "to protect the common home we live in". His position is also consistent with recent Chinese history, which teaches us that only sustainable agriculture can deliver meaningful food security.

Between 1978 and 2015, China invested a total of $378.5 billion in 16 major sustainability programmes, most of it in the latter 20 years. The investment involved more than 500 million people and far exceeds any other national sustainability programme. On the commercial side of sustainability, China is now at the cutting edge of solar technology, low-carbon transport, the circular economy, carbon trading, and more. We are serious about sustainability.

5) Success requires solutions at scale and China is well-placed to deliver them.

The urgency of our biodiversity and climate crises means that we need to have solutions in place right now. And these solutions need to be at scale.

The sustainability-linked loan mentioned above is not the first in the agricultural trading sector, but it is the largest so far. It demonstrates our intention to join hands with others in our industry and to contribute to sustainable growth in the global agriculture sector. That is part of the Chinese dream.

 

 

Johnny Chi Jingtao, Executive Vice-President, COFCO.

 -- via my feedly newsfeed

Innovation Policy: Federal Support for R&D Falls as its Importance Rises [feedly]

Innovation Policy: Federal Support for R&D Falls as its Importance Rises
http://conversableeconomist.blogspot.com/2019/08/innovation-policy-federal-support-for-r.html

  One of those things that "everyone knows" is that continued technological progress is vital to the continued success of the US economy, not just in terms of GDP growth (although that matters) but also for major social issues like providing quality health care and education in a cost-effective manner, addressing environmental dangers including climate change, and in other ways. Another thing that "everyone knows" is that research and development spending is an important part of generating new technology. But total US spending on R&D as a share of GDP has been nearly flat for decades, and government spending on R&D as a share of GDP has declined over time.

Here's a figure on funding sources for US R&D from the Science and Engineering Indicators 2018.  The top line shows the rise in R&D spending in the 1960s (much of it associated with the space program and the military), a fall in the 1970s, and then how R&D spending has bobbed around 2.5%  of GDP since then. The dark blue line shows the rise in business-funded R&D, while the light blue line shows the fall in government funding for R&D.

One underlying issue is that business-funded R&D is more likely to be focused on, well, the reasonably short-term needs of the business, while government R&D can take a broader and longer-term perspective,

One signal of this dynamic is that the share of patents which rely on government government funding is on the rise. L. Fleming, H. Greene, G. Li, M. Marx, and D. Yao describe the pattern in "Research Funding: Government-funded research increasingly fuels innovation" (Science, June 21, 2019, pp. 11139-1141).

Of course, the relationship between R&D spending and broader technological progress is complicated. Translating research discoveries into goods and services isn't a simple or mechanical process. Other important elements include the economic and regulatory environment for entrepreneurs, the diffusion of new technologies across firms,  and the quantity of scientists and researchers. For an overview of the broader issues, Nicholas Bloom, John Van Reenen, and Heidi Williams offer "A Toolkit of Policies to Promote Innovation"in the Summer 2018 issue of the Journal of Economic Perspectives. They explain the case for government support of innovation:

Knowledge spillovers are the central market failure on which economists have focused when justifying government intervention in innovation. If one firm creates something truly innovative, this knowledge may spill over to other firms that either copy or learn from the original research—without having to pay the full research and development costs. Ideas are promiscuous; even with a well-designed intellectual property system, the benefits of new ideas are difficult to monetize in full. There is a long academic literature documenting the existence of these positive spillovers from innovations. ...

As a whole, this literature on spillovers has consistently estimated that social returns to R&D are much higher than private returns, which provides a justification for government- supported innovation policy. In the United States, for example, recent estimates in Lucking, Bloom, and Van Reenen (2018) used three decades of firm-level data and a production function–based approach to document evidence of substantial positive net knowledge spillovers. The authors estimate that social returns are about 60 percent, compared with private returns of around 15 percent, suggesting the case for a substantial increase in public research subsidies.

Along with  pointing out some advantages of government-funded R&D, Bloom, van Reenen, and Williams also point out that when it comes to tax subsidies for corporate R&D, the US lags well behind. They write: 

The OECD (2018) reports that 33 of the 42 countries it examined provide some material level of tax generosity toward research and development. The US federal T&D tax credit is in the bottom one- third of OECD nations in terms of generosity, reducing the cost of US R&D spending by about 5 percent. ...  In countries with the most generous provisions, such as France, Portugal, and Chile, the corresponding tax incentives reduce the cost of R&D by more than 30 percent. Do research and development tax credits actually work to raise R&D spending? The answer seems to be "yes."

Here's their toolkit of pro-innovation policies, with their own estimates of effectiveness along various dimensions. 

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