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  • Politics and a New Trade Bureaucracy

    President Obama just announced plans to borrow millions of dollars from countries likeChinato create a new federal bureaucracy tasked with policing the trade practices of countries likeChina. The new bureaucracy is more about politics than trade.

    The International Trade Enforcement Center (ITEC) will have as many as 60 employees. With a budget of $26 million—about $433,000 per employee—it appears the agency may be bloated even by government standards. For example, the U.S. Trade Representative’s Office (USTR) currently spends about $207,000 per employee.

    The U.S.government already has several agencies dedicated to foreign trade practices, including USTR and the Department of Commerce’s Market Access and Compliance and Import Administration divisions. In fact, the new unit’s staff is likely to be drawn mostly from these agencies—the same people President Obama seems to think haven’t been doing enough to this point.

    President Obama suggests the new unit’s mission will be larger. As he told the United Auto Workers, “I’m creating a trade enforcement unit that will bring the full resources of the federal government to bear to investigate and counter unfair trade practices around the world, including by countries likeChina.”

    What were we doing before? Have Chinese trade practices changed (hint: no)? Or is there something else about the year 2012 that brought this issue to the President’s attention in a way that 2009, 2010, and 2011 didn’t?

    A fundamental trade question: Aren’t the American people, when they decide to spend their money, the best judges of what counts as “fair” trade? A political question: Why do we suddenly need a new trade bureaucracy, really?

    Posted in International [slideshow_deploy]

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