Agenda for Congress: Trade

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CEI’s new Agenda for Congress is out now. Each chapter contains pro-market policy recommendations in areas where CEI has expertise. Here are the ones from the chapter on trade:
- Support tariff relief and reclaim its tariff-making authority from an executive branch that has abused it;
- Rebuild or replace the World Trade Organization (WTO) and its rules-based trade dispute resolution system; and
- Work with the president to pursue free trade agreements with allies that focus solely on trade.
Tariff relief has been in the news lately. As of this writing, Trump has made tariff threats against Canada, Mexico, China, Denmark, Colombia, and Russia.
CEI’s solution to this outburst is the separation of powers. The Constitution vests all taxing power in Congress, and none in the president. The only reason Trump can unilaterally increase tariffs is because Congress delegated away some of its power in long-ago bills. Congress needs to repeal those provisions.
It is not enough just to lower tariffs. Congress needs to reform the tariff-making process itself. As one of our policy mantras goes, institutions matter. Real trade reform means institution-level reform.
Needed reforms will likely wait until later this session on the WTO’s role in the rules-based international trading system, and on upcoming trade agreements with the UK, EU, and rejoining the Trans-Pacific Partnership. A more politically palatable approach might be to start small, perhaps with an ally like Switzerland.
Strong rules-based institutions and trade agreements that stick to trade are important for a “trade with friends” strategy that can spark economic growth here at home, while advancing America’s foreign policy interests abroad.
The full chapter on trade policy is here. The full text of Free to Prosper: A Pro-Growth Agenda for the 119th Congress, with chapters on regulation, inflation, energy, finance, and other issues, is here.