Trade Policy 2023

Finance: The President’s 2023 Trade Policy Agenda, March 23, 2023

WM: Hearing on the Biden Administration’s 2023 Trade Policy Agenda with United States Trade Representative, Ambassador Tai, March 24, 2023

Within the past week, Chinese President Xi met with Vladimir Putin to strengthen economic ties, although any direct help with the Russian aggression in Ukraine (not a regional conflict) was not disclosed. If such aid is found to exist, it is news to no one that this would be very bad for our trade relationship with China.

Barring such stupidity, an agreement between Russia and China on energy and resources is geographically inevitable, although its instigation by authoritarian regimes is problematic for anyone outside the ruling oligarchy on one side and the Communist Party on the other. Revolution in both countries is inevitable and may occur sooner than later - which would be good news for the Mongols, the Uyghurs and the Ukranians (and many others).

The continuing conflict in Ukraine is not good for the Belt Road initiative. If China acts in their own interests in this matter, rather than in the interests of the strongmen, development will be good for all.

Until sanity returns, a reaproachment between Russia and China is all the more reason to dust off plans for the Trans Pacific Partnership (or whatever Ambassador Tai wishes to call it). We made our feelings about extra-legal provisions of trade treaties in regard to local law last year - and the years before. Global capitalism is bad enough. Global authoritarian capitalism is worse. Using right to work laws to leave American workers naked in the face of such power (including migrants to the United States) is a practice that must be ended if we wish to claim moral high ground in dealing with the Chinese.

The crisis on the border continues. The President is finding that dealing with it is not so easy as evicting Stephen Miller from the West Wing, which is why immigration reform must be part of the trade policy agenda. Workers who do not have documentation problems cannot be easily exploited - especially if they are able to unionize. This will also help level the playing field for American workers.

An analysis of how consumption taxes can improve our trade policy is found in our first attachment, as it was last year. We have updated our tax reform and debt papers, which are also attached. 

Congress has recently passed corporate minimum taxes to come into compliance with the OECD’s agreement on this subject. The President’s budget includes further proposals in this area. I am no fan of corporate income taxation when value added taxes (both GST/Invoice VAT and Subtraction VAT) are available.

Our proposal for an Asset Value Added Tax will require international cooperation. Part of trade is moving money around - including financial assets. An asset VAT as a replacement for capital gains taxes and capital returns must go farther than the border. It is too easy to shift to offshore stock exchanges where such taxes do not exist. International agreements on rates and enforcement structures are vital for such a tax to work. The model for negotiating the CMT on a multi-national basis can be used for this effort.

Again, please see the second attachment, which has been recently updated.

Given that there is still no agreement on extending (or eliminating) the debt limit, our national debt attachment is a must read for members of the Republican Conference. It turns out that much of the national debt is held by managed fund accounts and bonds held by the wealthiest households. GOP donors need to make some phone calls, as they are the ones who will lose the most money the fastest in the event of a default.

For more information on the debt, please see our study: Settling (and Squaring) Accounts: Who Really Owes the National Debt? Who Owns It? available from Amazon at https://www.amazon.com/dp/B08FRQFF8S  

I can provide free copies of the prior version upon request and will distribute the latest edition once it is completed. The most recent bottom line estimates can be found in the second attachment. This shows who is on the hook for the debt and who benefits from it.

A main conclusion of our analyses is that the national debt is the leverage for capitalism to the extent that debt securities allow Wall Street to offer riskier assets, such as mortgage backed securities embedded in Exchange Traded Funds, as well as more traditional offerings. Wealth held by the few (and the attachment shows how very few we mean), provides management absolute control of most workplaces. Employee-owned firms would not need such an unbalanced economy leveraged by American Treasury holdings.

Attachment: Trade Policy Video

Attachment: Tax Reform Videos included

Attachment: Debt Limit as Class Warfare Video