Doug Irwin: preference

Transcript context

…What will Trump actually do on trade? If you look at the data, the Mexican peso this year is up, last I looked, around 20 percent. Of course, it was down about that much right after the election. That would seem to suggest Trump on trade is now thought of as a bit of a paper tiger. Other people, like Bob Zoellick, whose judgment I respect greatly, a very smart guy — he seems to think Trump could do a lot of damage in the trade realm. Where do you stand on the spectrum of views? Well, if we go back to this decentralized view of US trade policy, that’s partly been a check and a balance within the government of Trump just doing something very quickly. Wilbur Ross and the Department of Commerce, they’ve encouraged higher steel tariffs, in some guise, under national security, what have you. That report has been delayed — delayed and delayed and delayed. The reason is because there are other agencies that can weigh in, other constituencies that can weigh in and say this isn’t good for diplomatic reasons, for national security reasons, for downstream user reasons, or something like that. So you see the administration divided. The reflex can’t be activated because there are all these other parties that are getting their voice heard. Whereas, if you did centralize things, it might be very easy for that centralized authority to say, “This is what we’re going to do. It doesn’t matter if there are voices to the negative. We just won’t listen to them.” I think you are referring to Bob’s Zoellick’s Wall Street Journal article of not too long ago. The damage is not so much in particular actions because we really haven’t seen many actions, except for pulling out of TPP, which, arguably, Hillary Clinton or Bernie Sanders would have done as well. We haven’t seen the trade cases come to the president’s desk and higher tariffs being imposed or quotas or what have you. The damage is more the rhetoric in some sense. You’re alienating South Korea, an ally, during a very tense time. You’re getting the Mexicans to actually think about, “Gee, we could live without NAFTA. We could stick it to the Americans like we used to in the past, instead of thinking about them as a partner because we’ve got all these other free trade agreements with the EU. We’d keep the one with Canada. We could keep TPP.” There’s no gain to the US from that. We lose market access, in terms of exports, if we’re discriminated against. There is this deterioration and this rot that can set in. In all of these chats, we have a segment: “underrated or overrated?” I’ll toss some ideas out to you. You’re free to pass, if you’d like. Underrated or overrated? Brexit.…

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