Industrial policy: The good, the bad, and the ugly

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Changing attitudes on industrial policy | WTO adaptations | Digital trade policies | Gender and trade | New trade tools | More research from Hinrich Foundation

Changing attitudes on industrial policy

What are the pros and cons of industrial policies in tackling market failures and other challenges? Economist Michael Spence writes in defense of industrial policy in Project Syndicate and Douglas Irwin considers the return of industrial policy for the IMF.  Vox interviews Kimberly Clausing about the dark nationalism of Biden’s climate policies.  The Wall Street Journal looks at Bidenomics and its contradictions, while Chip Capitols dives into the industrial policies that fostered Taiwan’s semiconductor juggernaut. 

Mentioned publications

1. In Defense of Industrial Policy – Michael Spence, Project Syndicate, May 5, 2023 
   In times of crisis, the question is not whether to adopt industrial policy but how to do it well. 

2. The Return of Industrial Policy - Douglas Irwin, International Monetary Fund, June 2023
   Should developing economies follow the US and China’s lead in adopting industrial policies? 

3. The nationalist dark side of Joe Biden’s climate policies – Dylan Matthews, Vox, May 9, 2023
   An interview with former Biden official Kimberly Clausing on the administration’s inward turn. 

4. Bidenomics and Its Contradictions – Greg Ip, The Wall Street Journal, June 8, 2023
   An examination of President Biden’s international economic policy and its downsides. 

5. Taiwan vs US Chip Subsidies – Bolstering the Sacred Mountain - Arrian Ebrahimi and Yipei Lu, Chip Capitols, May 23, 2023
   What policies did Taiwan adopt to build its world-leading semiconductor industry? 

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WTO adaptations

How can the WTO adapt to changing times?  Writing for the IMF, Chad Bown describes the challenge of export controls for the WTO, while Warren Maruyama and Alan Wm. Wolff of the Peterson Institute for International Economics analyze how the WTO can save itself from the national security exception. 

Mentioned publications

1. The Challenge of Export Controls - Chad P. Bown, International Monetary Fund, June 2023
   Bans, controls, and sanctions are an increasing challenge for the rules-based trading system. 

2. Saving the WTO from the national security exception - Warren Maruyama and Alan Wm. Wolff, Peterson Institute for International Economics, May 2023
   A way to resolving the impasse over the national security exception and the WTO dispute settlement body. 

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Digital trade policies

Wendy Li studies whether Office of the United States Trade Representative’s (USTR) digital trade policy is an example of regulatory capture, while the Congressional Research Service describes the key issues for US digital trade and data policy.  Nikkei Asia examines how the US Government should regulate AI technologies and control exports  Meanwhile, India is exporting its digital technologies to developing economies in ways that could shape the future of digital trade, per the Economist. 

Mentioned publications

1. Regulatory capture’s third face of power - Wendy Y Li, Socio-Economic Review, Volume 21, Issue 2, April 2023, Pages 1217–1245
   An academic analysis of regulatory capture in digital trade policy. 

2. Digital Trade and Data Policy: Select Key Issues – Congressional Research Service, March 16, 2023
   What are the key issues the US Government should consider in developing digital trade policy?  

3. U.S. to weigh rules for keeping AI safe from China, other competitors – Nikkei Asia, May 3, 2023
   The Biden administration is consulting with US industry on possible export controls of AI technologies. 

4. How India is using digital technology to project power – The Economist, June 10, 2023
   Can India successfully export its digital public infrastructure?  

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Gender and trade

Women lead only a small percentage of businesses engaged in trade. EY explores what can be done to close the trade gender gap, while Caroline Dommen of the International Institute for Sustainable Development assesses the Global Trade and Gender Arrangement. 

Mentioned publications

1. Why the gender gap in international trade needs to close faster – Sally Jones, Ernst & Young, May 16, 2023
   What can organizations do to benefit women’s development and economic growth? 

2. GTAGA: The Global Trade and Gender Arrangement, decoded – Caroline Dommen, International Institute for Sustainable Development, March 1, 2023
   What can multilateral agreements do to enhance gender equality in trade?  

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New trade tools

Two new trade platforms providing transparency into subsidies and trade flows were launched in May: the Subsidy Platform from the IMF, WTO, OECD, and the World Bank, and the WTO’s Global Trade Data Portal. 

Mentioned publications

1. Subsidy Platform – IMF, OECD, World Bank and the WTO, May 2023
   Key multilateral organizations focused on global economics collaborate to shed light on subsidies. 

2. Global Trade Data Portal – World Trade Organization, May 31, 2023
   A new repository of trade data with dashboards and other tools for visualizing trade flows. 

Mentioned publications from HF:

• Say hello to industrial policy, but never goodbye
• India: leading or thwarting data governance and digital trade?
• Ukraine forces debate on WTO and national security

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