Here’s a letter to the Wall Street Journal:
Former U.S. Trade Representative Robert Lighthizer’s letter in the July 19th edition of your paper is a good reminder of just how confused the Trump administration was about trade.
In his letter, Mr. Lighthizer complains about a provision in the USMCA that, he says, discourages investment in the U.S. while encouraging it abroad. Standing alone, protesting such a result is unobjectionable. But it doesn’t stand alone.
Like Mr. Trump, Mr. Lighthizer has a long record of worrying about U.S. trade deficits. (See, for example, Lighthizer’s Nov. 12, 2010, op-ed in the New York Times.) But to worry about the U.S. trade deficit is to worry about the fact that America continues to receive more investment from abroad than Americans send abroad. Therefore, if Mr. Lighthizer is correct that the USMCA’s Investor State Dispute Settlement provision shifts investment from the U.S. to foreign countries, that provision keeps the U.S. trade deficit lower than it would otherwise be – an outcome that Mr. Lighthizer, given his long record of calling for measures to reduce the U.S. trade deficit, should applaud rather than oppose.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030