The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 1 of 16 Harvard University

The Political Economy of Trade (BGP610) Harvard Kennedy School

Fall 2017 Course Syllabus

Faculty: Robert Z. Lawrence Faculty Assistant: Jean Dombrowski

Office: Littauer 316 Office hours: Wednesdays 1:30 to 3:30.

Phone: (617) 495-1118 Phone: (617) 495-1320

E-mail: robert_lawrence@harvard.edu E-mail: Jean_dombrowski@harvard.edu

Teaching Fellow: Michael-David Mangini; mangini@g.harvard.edu

Course Assistant: Sarah Geisman; sarah_geisman@hks18.harvard.edu

Course Description:

This course provides a multidimensional introduction to international trade policy. Its purpose is

to provide students with an understanding of international trade economics, rules, politics and

institutions, and the major policy issues and challenges facing the global trading system. The

course begins with an exploration of the rationales for free trade & protection, the distributional

consequences of trade, the impact of trade on employment and growth and the challenges

presented by deeper international economic integration. The course then considers the World

Trade Organization (WTO). It explores negotiation mechanisms and principles, the rules relating

to market access, services, agriculture, trade-related intellectual property (TRIPs), fair trade,

safeguards and the system for dispute settlement and retaliation. The final section considers major

issues facing the trading system. These include the Doha Round negotiations, regional and mega-

regional trading arrangements, the interaction between the trading system and measures to deal

with climate change and the recent backlash against globalization. The course will include a day

long simulation exercise of the Doha negotiations for which students will be organized into

national teams. The teams will jointly determine negotiations strategy and prepare a negotiations

briefing book that will count towards the class grade. In addition, after the first three weeks, class

participants will be assigned to four person study groups that will meet once a week. The groups

will also be assigned a country to represent in the Doha simulation. They will prepare brief case

fact summaries each time the class discusses a case study. These case summaries are no more

than 2 PowerPoint slides long and are due at 7pm the night before class. For each case study, one

person from a group will be selected at random at the start of each class to present their summary.

Class Meetings: Classes: Mondays and Wednesdays, 8:45-10am, L230.

Review Sessions: Fridays, 1:15-2:30pm, L382

Office Hours:

Professor Lawrence: Wednesdays 1:30 pm-3:30 pm, L316 or by appointment

TF: tbd

Prerequisites:

This course presumes no knowledge of economics.

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 2 of 16 Harvard University

Requirements:

The real world of trade policy is brought into the classroom using specially prepared case studies

and simulation exercises. Students are expected to prepare for each class and discussion group.

The course will meet twice a week for lectures. In the first two weeks there will be review

sessions held on Friday. Thereafter, at a time determined by each group, there will be weekly

small-group discussion sessions and exercises, for which attendance is mandatory. The groups

will jointly work on case presentations, negotiation strategies, and a briefing book for a trade

minister. All students must participate in the group sessions and the day long negotiations

simulation on November 3rd.

Grading: The class grade will be based on the following criteria:

10% - Problem set

20% - Take-home midterm exam

15% - Participation in class and small-group discussions and presentations

30% - Negotiations briefing book

25% - Take-home final exam

Mandatory textbook:

1. Bernard Hoekman and Michel M. Kostecki, The Political Economy of the World Trading System,

3rd Edition, Oxford University Press, 2009. [H&K]

Optional resources for further exploration:

1. Lawrence Edwards and Robert Lawrence Rising Tide: Is Growth in Emerging Economies Good for

the United States?, Washington DC: The Peterson Institute for International Economics, 2013. PDF

Copy Distributed, Available on Kindle $9.99

2. Charan Devereaux, Robert Z. Lawrence and Michael D Watkins, Case Studies in US Trade

Negotiation: Vol. 1 Making the Rules and Vol. 2 Resolving Disputes, Washington DC: Institute for

International Economics, 2006. [DLW-V1] and [DLW-V2]

3. Web links provided below (“WTO Materials” and “Current Trade Policy”)

WTO Materials:

1. The WTO in Brief at: https://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm

2. Understanding the WTO at: https://www.wto.org/english/thewto_e/whatis_e/tif_e/tif_e.htm

3. 10 things the WTO can do at:

https://www.wto.org/english/thewto_e/whatis_e/10thi_e/10thi00_e.htm

Current Trade Policy:

To follow the latest trade policy developments:

1. Daily US Trade News http://www.politico.com/morningtrade/

2. Weekly Global Trade International Center for Trade and Sustainable Development at:

http://www.ictsd.org/bridges-news/bridges/overview

3. Inside U.S. Trade’s “World Trade Online” at: http://insidetrade.com/

4. The Economist’s “Trade Policy” articles at: http://www.economist.com/topics/trade-policy

5. The Guardian’s “International Trade” articles at:

http://www.theguardian.com/business/internationaltrade

6. The New York Times “International Trade and World Market” articles at:

http://topics.nytimes.com/top/reference/timestopics/subjects/i/international_trade_and_world_mar

ket/index.html

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 3 of 16 Harvard University

7. Soumaya Keynes and Chad Bown, Trade Talks, Weekly Podcast on trade issues available via

itunes.

Lectures Overview:

Date Lecture Topic

Aug 30 Why Trade?

September 1 Trade: Winners and Losers

September 6 Why Protect? (Part 1)

September 11 Why Protect? (Part 2)

September 13 Trade and Jobs

September 18 Deeper Integration

September 20 Fast Track Case.

September 25 Trade Rules 1: GATT Basic principles

September 27 Thea Lee

October 2 Trade Rules 2: GATT Exceptions.

October 4 TRIPS Cases

October 11 GATS: Trade in Services

October 16 Trade in Agriculture

October 18 Dispute Settlement and Retaliation

October 23 Beef-Hormones Case

October 25 Fair Trade: Anti-Dumping and Subsidies

October 30 Cotton Case

November 1 A Real Development Round

November 3 Doha Round Simulation

November 6 Doha Debrief and Wither the WTO

November 8 Solyndra

November 13 Regionalism Theory

November 15 Regionalism: Experiences

November 20 Regionalism: The Debate over TPP

November 27 Economic and Political Challenges of Globalization

November 29 Future of the Trading System

Key Deadlines:

September 18 (7pm) Problem set due

September 19 (7pm) Fast Track Case Summary)

October 3 (7pm) TRIPS Cases Summary due

October 19 (7pm) Midterm due

October 22 (7pm) Beef-Hormones Case Summary due

October 29 (7pm) Cotton Case Summary due

November 7 (7pm) Solyndra Case Summary

November 28 (7pm) Doha Round Briefing Books due

December 7 Take-Home Final Exam (24 hours)

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 4 of 16 Harvard University

List of Readings and Study Questions by Lecture:

Lecture #

and Topic

Readings and Study Questions

Lecture 1:

Aug 30

Why Trade?

Mandatory readings:

Lecture 1 Notes by Professor Lawrence

H&K, “Annex 2: Economic Effects of Trade Policy-Basic Concepts”, pp. 676-

678

McDonald, Brad. “Why Countries Trade”, Finance & Development, December

2009, http://www.imf.org/external/pubs/ft/fandd/2009/12/pdf/basics.pdf

Optional readings:

Chang, Ha-Joon. “Protectionism. the truth is on a $10 bill”, The Independent, July

23, 2007, http://www.independent.co.uk/news/business/comment/hajoon-chang-

protectionism-the-truth-is-on-a-10-bill-458396.html

Panagariya, Arvind. “Free Trade Skeptics: Wrong Again,” Economic Times,

January 25, 2006, http://www.columbia.edu/~ap2231/ET/et86_January25-06.htm

Study questions:

What time horizons and assumptions are appropriate when thinking about trade

policy?

Why are there gains from trade when countries are different?

Why are there gains from trade when countries are similar?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 5 of 16 Harvard University

Lecture #

and Topic

Readings and Study Questions

Lecture 2:

Sept 1

Trade:

Winners &

Losers

Mandatory readings:

Lecture 2 Notes by Professor Lawrence

Robert Z. Lawrence, “The Globalization Paradox: More Trade, Less Inequality”,

VOX, http://www.voxeu.org/article/globalisation-paradox-more-trade-less-

inequality

Paul Krugman, “Trouble with Trade,” The New York Times, December 29, 2007,

http://www.nytimes.com/2007/12/28/opinion/28krugman.html?_r=0

Optional readings:

Mr Alt, James E. and Michael Gilligan “The Political Economy of Trading States:

Factor Specificity, Collective Action Problems, and Domestic Political

Institutions,” reprinted in Jeffery A. Frieden and David A. Lake (eds),

International Political Economy: Perspectives on Global Power and Wealth,

(Thomson Wadsworth, 2000), pp. 327 – 334.

Study questions:

Do consumers gain from international trade?

Do producers gain from international trade?

Do less-skilled workers gain from trade?

Do capitalists gain from trade?

Lecture 3:

Sept 6

Why

Protect? (Part

1)

Mandatory readings:

Lecture 3 Notes by Professor Lawrence

Jagdish Bhagwati, “Protectionism”, Library of Economics and Liberty,

http://www.econlib.org/library/Enc/Protectionism.html

H&K, “Import tariffs” and “Quantitative restrictions”, pp.678-680

Optional readings:

Rodrik, Dani (2010) “Why Doesn’t Everyone Get the Case for Free Trade?”

Chapter three in D Rodrik, The Globalization Paradox

Kreinen, Mordechi E. 1998. “Protection of Domestic Industries: The Tariff,”

International Economics: A Policy Approach, Euro Update [8th edition], Chicago,

IL: Dryden Press. 85-112.

Corden, W. Max, “The Theory of Domestic Divergences”, pp. 7-16. (Sections 2.2,

2.3 and 2.4) and pp. 21- 23 (Section 2.8) in W Max Corden Trade Policy and

Economic Welfare. New York: Oxford University Press, 1997.

Study questions:

What impact does a tariff have (a) on consumption and (b) on production?

Who gains and who loses from a tariff?

Do tariffs and quotas confer similar levels of protection?

Why do economists prefer tariffs to quotas?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 6 of 16 Harvard University

Lecture #

and Topic

Readings and Study Questions

Lecture 4:

Sept 11

Why Protect?

(Part 2)

Mandatory readings:

Lecture 4 Notes by Professor Lawrence

Christina Romer, “Do Manufacturers Need Special Treatment?” New York Times,

February 4, 2012, http://www.nytimes.com/2012/02/05/business/do-

manufacturers-need-special-treatment-economic-view.html?_r=0

Optional readings:

Paul R Krugman and Maurice Obsfeldt, “The Theory of External Economies,”

Chapter 6, International Economics, 2003, pp. 147-155

Nordhaus, William D., and Paul A. Samuelson, “Market Failure.” In Economics

13th Edition, New York, NY: McGraw-Hill, pp.747-753

Study questions:

Will free trade improve welfare in the presence of market-failures such as

externalities (e.g. pollution)?

Under what circumstances could infant industry protection improve efficiency?

Could it pay the European Union to subsidize Airbus?

Lecture 5:

Sept 13

Trade and

Jobs

Mandatory readings:

Derek Scissors, “The trade deficit does not cost us jobs”, American Enterprise

Institute, March 16, 2015, https://www.aei.org/publication/the-trade-deficit-does-

not-cost-us-jobs/

Charles R. Morris, “Why the United States is always the loser in any free-trade

deal”, Reuters, April 10, 2015, http://blogs.reuters.com/great-

debate/2015/04/09/does-the-u-s-pay-too-high-a-cost-for-free-trade-in-the-tpp-

pact/

Chris Isidore, “Will free trade create or kill U.S. jobs?”, CNN Money, August 15,

2011, http://money.cnn.com/2011/08/15/news/economy/jobs_free_trade_deals/

Ben Beachy, “Why 'Fast Track' Faces So Much Congressional Opposition”,

National Journal, June 3, 2015, http://www.nationaljournal.com/next-

america/newsdesk/why-fast-track-faces-a-wall-of-congressional-opposition-

20150603

Optional readings:

Edwards, Lawrence and Robert Lawrence, Rising Tide, Chapters 1 –3

Martin N. Baily, “How the U.S. Gets Manufacturing Policy All Wrong”, The Wall

Street Journal, June 2, 2015, http://www.wsj.com/articles/how-the-u-s-gets-

manufacturing-policy-all-wrong-1433301281

Study questions:

Do trade deficits cost jobs?

Has import growth been a major source of US worker displacement?

Why has the share of manufactured jobs declined over time?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 7 of 16 Harvard University

Lecture #

and Topic

Readings and Study Questions

Lecture 6:

Sept 18

The

Challenge of

Deeper

Integration

Mandatory readings:

H&K, selected passages of Chapter 13, pp. 582-583 (Introduction), pp.602-604

(“The Doha Round Failure”), pp.632-635 (“Conclusion”)

Robert Z. Lawrence, Albert Bressand, and Takatoshi Ito, “When is International

Cooperation Desirable?” Chapter 3 in “A Vision for the World Economy:

Openness, Diversity and Cohesion”, Washington, D.C.: Brookings Institution,

1996.

Optional readings:

H&K, Remainder of Chapter 13

Paul R. Krugman, “What Should Trade Negotiators Negotiate About?” Journal of

Economic Literature Vol. XXXV (March 1997) pp. 113-120.

Dani Rodrik, “Trade Policy Reform as Institutional Reform”, Chapter 1 in

Hoekman, Bernard, Mattoo Aadiya and Phillip English (eds.), Development Trade

and the WTO: A Handbook Washington, D.C: World Bank, 2002, pp. 3-10.

Study questions:

Is the world really flat? What is the optimal balance between global integration

and national sovereignty?

Why has the scope of trade agreements deepened over time? (Consider both

economic and political factors)

Should trade agreements focus solely on border barriers, or should their rules

cover domestic regulations as well?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 8 of 16 Harvard University

Lecture #

and Topic

Readings and Study Questions

Lecture 7:

Sept 20

Fast Track

Case:

Organizing

to Negotiate

in the USA

Mandatory readings:

“Fast Track Derailed: The 1997 Attempt to Renew Fast Track Trade Legislation”,

KSG Case No. NR15-02-1660.3, Abridged Version (18 pages)

Greg Sargent, “Getting past the noise in the raging debate over Fast Track”,

Washington Post, May 22, 2015, http://www.washingtonpost.com/blogs/plum-

line/wp/2015/05/22/getting-past-the-noise-in-the-raging-debate-over-fast-track/

Paul Lewis, “Barack Obama given 'fast-track' authority over trade deal

negotiations”, The Guardian, June 24, 2015, http://www.theguardian.com/us-

news/2015/jun/24/barack-obama-fast-track-trade-deal-tpp-senate

Pat Rogers, “Good for Farmers, Good for America”, U.S. News, April 20, 2015,

http://www.usnews.com/debate-club/should-congress-give-the-president-fast-

track-trade-promotion-authority/good-for-farmers-good-for-america

Stephen Seufert, “Fast-Tracking the Trans-Pacific Partnership: Bad for General

Welfare and Common Good”, The Huffington Post, May 4, 2015,

http://www.huffingtonpost.com/stephen-seufert/fast-tracking-the-

tpp_b_6800602.html

Optional readings:

DLW-V1, pp.187-191 and 232-239 (“Negotiation Analysis of the Case”)

C Robert Gibson & Taylor Channing, “Here’s how much corporations paid US

senators to fast-track the TPP bill”, May 27, 2015,

http://www.theguardian.com/business/2015/may/27/corporations-paid-us-

senators-fast-track-tpp

Susan Davis, “5 questions answered on the debate over 'fast track' and trade”, USA

Today, June 24, 2015,

http://www.usatoday.com/story/news/politics/2015/06/24/trade-fast-track-

questions/29214127/

George Zornick, “The Fast-Track Fight Is Effectively Over: It’s Happening”, The

Nation, June 23, 2015, http://www.thenation.com/article/the-fast-track-fight-is-

effectively-over-its-happening/

Kimberley Amadeo, “Trade Promotion Authority: Pros and Cons of Fast-Track

Authority”, About.com, June 25, 2015,

http://useconomy.about.com/od/glossary/g/Trade_Promotion.htm

Study questions:

What is Fast Track? Why did the United States develop this decision-making

mechanism?

What does the case tell us about the relationship between principles and agents in

negotiations?

Should labor standards be part of trade agreements?

Why did it become increasingly difficult for U.S. administrations to get Congress

to grant it Fast Track Authority?

Has Fast Track outlived its usefulness? If so, how should the U.S. approach

ratifying major new trade agreements?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 9 of 16 Harvard University

Lecture #

and Topic

Readings and Study Questions

Lecture 8:

Sept 25

Trade Rules

1: GATT

Basic

principles

Mandatory readings:

H&K, Chapter 2.7, p.82

H&K, Chapter 5.10, pp.264-266

Chapter 1 “Basics” of “Understanding the WTO” available at:

https://www.wto.org/english/thewto_e/whatis_e/tif_e/utw_chap1_e.pdf

Optional readings:

H&K, Remainder of Chapter 2 “The World Trade Organization”

H&K, Remainder of Chapter 5 “Trade in Goods”

Study questions:

What are the benefits/costs of multilateral trade negotiations

What are the benefits and costs of decision-making by consensus?

Is MFN a suitable basis for trade agreements?

What are the costs and benefits of national treatment?

Lecture 9:

October 2

Trade Rules

2: GATT

Exceptions

Mandatory readings:

H&K, Chapter 10.2, pp.483-492

H&K, Chapter 12.1, pp.533-547

H&K, Chapter 13.5 , pp.613-624

Optional readings:

John H. Jackson. “Competing Policies and Ingenious Devices,” Chapter 9 in The

World Trading System: Law and Policy of International Economic Relations,

Cambridge: MIT Press, 1997, pp. 229-245.

Study questions:

What are the exceptions to MFN treatment under WTO rules?

Are preferential trade agreements legal under the WTO?

Are developing countries expected to adhere to WTO rules?

Does the WTO allow for environmental protection when it interferes with trade?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 10 of 16 Harvard University

Lecture #

and Topic

Readings and Study Questions

Lecture 10:

October 4

TRIPS Cases

(Trade-

related

Intellectual

Property

Rules)

Mandatory readings:

“International Trade Meets Intellectual Property: The Making of the TRIPS

Agreement,” KSG Case No. NR15-02-1661.3, Abridged Version (17 pages)

“TRIPS Part II: International Trade meets Public Health: TRIPS and Access to

Medicines”, KSG Case No. NR15-04-1736.3, Abridged Version (30 pages)

Optional readings:

H&K, Chapter 8 “Protection of Intellectual Property”, pp.370-412

“Intellectual property: protection and enforcement” chapter in “Understanding the

WTO” available at:

http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm

DLW-V1, pp. 37- 76

DLW-V1, pp. 76-133

Study questions:

What is the case for policies protecting intellectual property?

Who gains and who loses from international intellectual property protection?

Should TRIPs be part of trade agreements?

Why were the US corporations successful in making TRIPs part of the Uruguay

Round Agreement?

Why were the NGOs and developing countries successful in obtaining the WTO

declaration on the TRIPs Agreement and Public Health?

Lecture 11 October 11 GATS: Trade in Services

Mandatory readings:

H&K, Chapter 7.3, pp.333-347

H&K, Chapter 7.6, pp.364-367

H&K, Chapter 7.7, pp.367-368

Optional readings:

“Services: rules for growth and investment” chapter in “Understanding the WTO”

available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm6_e.htm

Robert M. Stern. “Quantifying Barriers to Trade in Services.” Development Trade

and the WTO: A Handbook, Hoekman, Aaditya and English (eds.), Chapter 26,

Washington, D.C .: World Bank, 2002.

Study questions:

How important are services in trade?

What are the four modes?

Do WTO rules require privatization of public services?

How do countries liberalize their services?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 11 of 16 Harvard University

Lecture 12:

October 16

Agriculture

Mandatory readings:

H&K, Chapter 6.1, pp.270-303

Optional readings:

“Agriculture: fairer markets for farmers” chapter in “Understanding the WTO”

available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm3_e.htm

Stephen Tokarick, “Dispelling Some Misconceptions about Agricultural Trade

Liberalization” Journal of Economic Perspectives, Vol 22 Number 1, Winter 2008

pp.199-216

Study questions:

Why is agriculture such a contentious issue in trade negotiations?

Lecture 13:

October 18

Dispute

Settlement

and

Retaliation

Mandatory readings:

H&K, Chapter 3.1, pp.84-87

H&K, Chapter 3.2, pp.87-92

H&K, Chapter 3.6, pp.126-128

“Settling Disputes” chapter in “Understanding the WTO” available at:

http://www.wto.org/english/thewto_e/whatis_e/tif_e/utw_chap3_e.pdf

Optional readings:

H&K, Remainder of Chapter 3

Robert Z. Lawrence. Chapter 2, Role of Remedies in the WTO System.,” in

Crimes and Punishments: Retaliation under the WTO, Washington DC: Institute

for International Economics, 2003, pp. 13-47

DLW-V2, “Introduction”, pp.1-27

Study questions:

Is the WTO Agreement like a commercial contract or a criminal code?

Why do countries comply with WTO rules?

Are countries punished for violating WTO rules?

Does the WTO dispute system undermine national sovereignty?

Is the WTO dispute system unfair to smaller countries?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 12 of 16 Harvard University

Lecture 14:

October 23

Beef-

Hormones

Case

Mandatory readings:

“Food Fight: The US, Europe, and Trade in Hormone-Treated Beef”, KSG Case

No. NR14-02-1677.3, Abridged Version (27 pages)

H&K, Subchapter “EC-Hormones”, pp.105-107

Optional readings:

DLW-V2, pp. 31-96

Robert Z Lawrence “The United States and the WTO Dispute Settlement System”

CSR no 25, March 2007 New York: Council on Foreign Relations. Available

here.

Study questions:

What are the major differences in the way Americans and Europeans regulate

beef? Does this explain why they have different rules?

What is required under the SPS Agreement if Europe wishes to Ban Hormone-fed

Beef? (see case appendix)

Has Europe met these requirements?

What measures did the US government take under GATT to obtain access for US

Beef? (i.e. in the1980s)

What measures did the US government follow outside the WTO to help its case?

What measures did the US government use at the WTO?

Did the Dispute Settlement Understanding System of the WTO make a

difference?

How should the case be resolved? Given no agreement, has the WTO System led

to the best outcome possible?

What measures would make the WTO more effective in dealing with member

violations?

Lecture 15:

October 25

Fair Trade:

Anti-

Dumping and

Subsidies

Mandatory readings:

H&K, Chapter 9 Introduction, pp.413-419

H&K, Chapter 9.9, pp.469-471

“Anti-dumping, subsidies, safeguards: contingencies, etc.” chapter in

“Understanding the WTO” available at:

http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm

Optional readings:

Remaining sections of H&K Chapter 9, pp.413-471

Alan O. Sykes. “The Economics of WTO Rules on Subsidies and Countervailing

Measures” The Chicago Working Paper No. 186, http://ssrn.com/abstract=415780

Study questions:

What is fair trade?

Can competition between firms located in different countries occur on a level

playing field?

What are the goals of the antidumping laws?

Do the procedures followed by these laws effectively achieve these goals?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 13 of 16 Harvard University

Lecture 16:

October 30

Cotton Case

Mandatory readings:

“Brazil’s WTO Cotton Case: Negotiation through Litigation”, Harvard

Business School Case No. N1-905-405

Optional readings:

DLW-V2, “Case Analysis”, pp.262-266

Study questions:

• What has Brazil achieved by winning the case?

• What are the implications of this case for US agricultural policies?

• What are the implications of this case for producers in developing countries?

• Does this case provide a blueprint for how weaker players in the system can

use the WTO dispute settlement mechanism to advance their interests?

Mandatory readings:

H&K, pp.140-146 (“The Doha Round (2001- )”)

Robert Z. Lawrence, “A True Development Round? A Review of Joseph E.

Stiglitz and Andrew Charlton’s Fair Trade for All: How Trade Can Promote

Development”, Journal of Economic Literature, 45(4): 1001-1010 (December

2007)

Optional readings:

“The Doha Agenda” chapter 5 in “Understanding the WTO” available at:

https://www.wto.org/english/thewto_e/whatis_e/tif_e/utw_chap5_e.pdf

Study questions:

How would you define the term “development agenda”?

Does the Doha Round have a real development agenda? Why or why not?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 14 of 16 Harvard University

Lecture 18:

November 6

Doha Round

Simulation

Debrief

Study questions:

Please reflect on your experience from the Doha Round Simulation and be ready

to share your insights with the class. What were the most contentious issues

during the negotiations? How did you overcome negotiation obstacles? What were

the most important lessons for you personally? How should the WTO be changed?

Lecture 20:

Nov 8

Solyndra

Case

Mandatory readings:

“Shaping the Future of Solar Power: Climate Change, Industrial Policy and

Free Trade”, KSG Case No. 1992.0

Optional readings:

2010 Davos Session on Trade and Climate, available at

http://www.youtube.com/watch?v=I7LYiHfESHo

“The environment: a specific concern” chapter in “Understanding the WTO”

available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey2_e.htm

Study questions:

Are the trade rules compatible with policies to combat climate change?

Should trade agreements contain environmental provisions?

Lecture 21:

Nov 13

Regionalism

Theory

Mandatory readings:

H&K, Chapter 10.3, pp.492-508

H&K, Chapter 10.4, pp.508-510

“Regionalism: friends or rivals?” chapter in “Understanding the WTO” available

at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey1_e.htm

Optional readings:

Robert Z. Lawrence, “Regionalism, Multilateralism, and Deeper Integration”,

Brookings Institution, 1996, pp. 21-42

Jagdish Bhagwati, “U.S. Trade Policy: The Infatuation with Free Trade Areas” in

Jagdish Bhagwati and Anne O. Krueger, “The Dangerous Drift to Preferential

Trade Agreements”, Washington, DC: American Enterprise Institute, 1995, pp.1-

18

Study questions:

Are regional arrangements building complements/building blocks or

substitutes/stumbling blocks for multilateral liberalization?

Are the WTO rules for regional arrangements appropriate? If not, how should they

be changed?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 15 of 16 Harvard University

Lecture 22

November 15

and Lecture

23

November 20

Mega-

Regionalism

Case

Mandatory readings:

“Setting the Standard in Free Trade: The Making of the Transatlantic Trade and

Investment Partnership”, HKS Case No. [Draft]

Richard Baldwin, “21st Century Regionalism: Filling the gap between 21st century

trade and 20th century trade rules”, available at

http://wto.org/english/res_e/reser_e/ersd201108_e.pdf

Study questions:

Why are regional trade arrangements growing so rapidly?

Does the

Lecture 24:

November 27

Economic &

Political

Challenges

of

Globalization

Mandatory readings:

DW, “Global Talk: Globalization - Opportunity or Risk?”, March 16, 2015, Video

available at: http://youtu.be/QE8Dr556oC0

Gertz, Geoffrey. What Will Trump's Embrace of Bilateralism Mean for

American's Trade Partners. https://www.brookings.edu/blog/future-

development/2017/02/08/what-will-trumps-embrace-of-bilateralism-mean-for-

americas-trade-partners/ (Links to an external site.)Links to an external site. Alden, Edward. Renegotiating NAFTA: Let the Games

Begin. https://www.cfr.org/blog/renegotiating-nafta-let-games-begin (Links to an

external site.)Links to an external site.

Also please review a document of abstracts of recent scholarship on the political

economy of trade which will be posted to Canvas soon.

Optional readings:

Robert Z. Lawrence, “Globalization, Stock Options and the Super Rich” Chapter 5

in Robert Z. Lawrence, “Blue Collar Blues: Is Trade to Blame for Rising US

Income Inequality?”, Washington DC: The Peterson Institute for International

Economics, 2008

Binyamin Appelbaum, “Perils of Globalization When Factories Close and Towns

Struggle”, The New York Times, May 17, 2015, available at:

http://www.nytimes.com/2015/05/18/business/a-decade-later-loss-of-maytag-

factory-still-resonates.html?_r=0

Dani Rodrik, “Globalization for whom?”, Harvard Magazine, July-August 2002,

available at: http://harvardmagazine.com/2002/07/globalization-for-whom.html

Arvind Panagariya, “Free Trade Skeptics: Wrong Again” Economic Times,

January 25, 2006, http://www.columbia.edu/~ap2231/ET/et86_January25-06.htm

Danny Dorling, “Book Review: The Globalization of Inequality, by François

Bourguignon”, Times Higher Education, May 7, 2015, available at:

https://www.timeshighereducation.co.uk/books/the-globalization-of-inequality-

by-franois-bourguignon/2019979.article

Study questions:

Has globalization been good for growth?

Is globalization an important driver of inequality?

Why the backlash against globalization?

The Political Economy of Trade (ITF-BGP 610) Harvard Kennedy School

Prof. Robert Z. Lawrence Page 16 of 16 Harvard University

Lecture 25:

November 29

Future of the

Trading

System

Mandatory readings:

H&K, Chapter 15 “Where to from here?”, pp.664-670

Robert Z. Lawrence, “Competing with Regionalism by Revitalizing the WTO”

pp.38-41 in “The Future and the WTO: Confronting the Challenges”, July 2012,

available at: http://ictsd.org/downloads/2012/07/the-future-and-the-wto-

confronting-the-challenges.pdf

Faizel Ismail, “Towards an alternative narrative for the multilateral trading

system”, Bridges Africa 2 (2), May 15, 2013, available at:

http://www.ictsd.org/bridges-news/bridges-africa/news/towards-an-alternative-

narrative-for-the-multilateral-trading

Optional readings:

Gary Clyde Hufbauer and Jeffrey Schott, “Will the WTO Enjoy a Bright Future?”,

Peterson Institute, May 2012, available at:

http://www.iie.com/publications/pb/pb12-11.pdf

Susan C. Schwab, “Acknowledge Doha’s demise and Move on to Save the

WTO”, Vox, May 28, 2011, available at:

http://www.voxeu.org/article/acknowledge-doha-s-demise-and-move-save-wto

Richard Baldwin, Masahiro Kawai, and Ganeshan Wignaraja, „Future of the

world trading system: Asian perspectives”, VOX, June 12, 2013, available at:

http://www.voxeu.org/article/future-world-trading-system-asian-perspectives

Study questions:

What caused the recent global financial crisis?

Why was the response in trade flows so large?

Have policymakers responded appropriately to the crisis?

What are the major challenges facing the trading system over the long run?