Download Spring 2017 Syllabus - Maxwell School

Trade and the Global Economy
Syracuse University, IRP 404
Winter/Spring 2017
Professor: Kent H. Hughes
Tel: 202 320 9078
Email: [email protected]; [email protected]
I. Course Objectives
This class will focus on the economic, political, and legal dimensions of trade policy and the new
challenges posed by globalization. This examination will take place from the perspective of the United
States, but roles of other countries and international institutions also will be an important focus of
readings and class discussions. Considerable emphasis will be placed on the trade-offs policymakers face
in making trade policy decisions, as well as on the increasing role that trade, capital, and technology
flows play in affecting U.S. jobs and welfare. This course is intended to provide a broad introduction to
the fundamental trade policy challenges confronting the United States in an increasingly integrated
global economy. In exploring how the United States responds to global economic challenges, there will
be an emphasis on how the Congress, the Executive Branch, interest groups and the policy community
affect foreign economic policy. In addition, the course is intended to provide greater appreciation of the
role that economics as a discipline can provide for continued lifelong learning and life choices. Contrary
to the view that economics is “the dismal science,” it can be fun too!
The course material is divided into three blocs: (1) basic economic concepts, rules, and institutions of the
global economy; (2) the formulation and administration of U.S. trade policy, including contemporary
issues in U.S. trade relations; and (3) selected issues linking U.S. businesses, workers, and communities
to the global economy. Topical economic issues such as the Trans Pacific Partnership and Transatlantic
Trade and Investment negotiations, rising income inequality, and the fate of the euro-zone will also be
discussed and analyzed throughout the semester.
The class is designed to stimulate critical thinking and informed analysis in an informal and collegial
setting. The discussions will reinforce the “Washington experience” linking internships and other
courses with readings on global trade policy issues. Active participation and discussion and the
exchange of ideas, as well as the ability to understand issues from a multi-disciplinary perspective, are
important to the learning experience. On most issues and case studies discussed, there is no single
“right” answer, but students should be able to support their positions with reference to generally
accepted facts and data, an understanding of the readings, and sound reasoning.
Like the two related courses on Global Issues and Global Policy, Trade and the Global Economy will be
taught as a seminar with an emphasis on class discussion of key issues and concepts. There will be a
conscious effort to bring an added perspective to the issues raised in the Global Policy and the Global
Issues seminars. Students should feel free to raise questions that have been broached and discussed in
their other two courses.
II. Grading Policy and Readings
Grades will be based on

Class attendance and participation (20%);

One class presentation (20%);

One Opinion Editorial (10%)

one written exam (25%); and

One policy memo (25%).

Extra Credit Essay (+ 10%)
Required readings will be posted on Blackboard or provided as hand-outs. Each student is expected to
keep abreast of current issues related to the global economy by reading the Washington Post, New York
Times, Financial Times, Wall Street Journal, and the Economist. The United States has now entered its
presidential election year in which policy and politics will interact in a variety of ways. Students are
encouraged to follow the political news as it affects policy proposals and actual policy making.
The following books can provide added useful background but are not part of the assignments for the
course.
International Political Economy: Perspectives on Global Power
and Wealth, by Jeffry A. Frieden, David A. Lake, and J. Lawrence
Broz, W.W. Norton & Company, New York, 2010
The Political Economy of International Relations, by Robert
Gilpin, Princeton University Press, Princeton, New Jersey 1987
Red Ink: Inside the High Stakes Politics of the Federal Budget, by
David Wessel, Crown Publishing, New York, NY 2012
American Trade Politics (Fourth Edition), by I.M. Destler,
Institute for International Economics, Washington DC, June 2005
Competition of Ideas: The World of Washington Think Tanks, by
Murray Weidenbaum, Transaction Publishers, New Brunswick,
N.J. 2009
The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter
White, and the Making of a New World Order, by Benn Steil, Council on Foreign
Relations Book, Princeton University Press, Princeton, N.J., February 2013
The G-20 and International Economic Cooperation: Background and Implications for
Congress, by Rebecca M. Nelson, Congressional Research Service, R40977,
November 7, 2013.
The Post-American World, by Fareed Zakaria, W.W. Norton & Company,
New York, NY, 2008
Foreign Policy Begins at Home: The Case for Putting America’s House in Order, by Richard N.
Haass, Basic Books, New York, NY 2013.
Building the Next American Century: The Past and Future of American Economic
Competitiveness, by Kent H. Hughes, Woodrow Wilson Center Press,
Washington, DC, 2005
III. Ethics Requirements
Syracuse University follows the series of ethical guidelines that appear below. They also
give the instructor the ability to impose grade sanctions – including failure – for violations.
“Syracuse University’s Academic Integrity Policy reflects the high value that we, as a university
community, place on honesty in academic work. The policy defines our expectations for academic
honesty and holds students accountable for the integrity of all work they submit. Students should
understand that it is their responsibility to learn about course-specific expectations, as well as
about university-wide academic integrity expectations. The policy governs appropriate citation
and use of sources, the integrity of work submitted in exams and assignments, and the veracity of
signatures on attendance sheets and other verification of participation in class activities. The
policy also prohibits students from submitting the same work in more than one class without
receiving written authorization in advance from both instructors. Under the policy, students found
in violation are subject to grade sanctions determined by the course instructor and non-grade
sanctions determined by the School or College where the course is offered as described in the
Violation and Sanction Classification Rubric. SU students are required to read an online summary
of the University’s academic integrity expectations and provide an electronic signature agreeing
to abide by them twice a year during pre-term check-in on MySlice. For more information about
the policy, see http://academicintegrity.syr.edu.
IV. Course Outline
Week 1 January 18: Introduction and Overview: Elaboration of course objectives, requirements, and
expectations, assignment of presentation topics, and overview of course syllabus.
Bloc 1: Economic Underpinnings of the Global Economy
Week 2 January 25: The United States in A Global Economy: Introduction to the elements, benefits,
and challenges of international economic integration. How can globalization and international
economic integration be measured? In what ways is the U.S. economy more integrated with the world
today than it was a century ago? In what ways is it less integrated? How has this integration varied
according to the movement of goods and services, business location decisions, ownership of
production facilities, and flows of technology? How has increased global interdependence created
efficiencies and opportunities for some, but erased safeguards and jobs for others? How does this
integration affect your own career choices and opportunities?
Week 3 February 1: Economics of Global Trade: Introduction to the gains and costs of foreign trade,
foreign investment, off-shoring, and outsourcing. Who were the mercantilists and are they alive and
well today? In what ways does the theory of comparative advantage still hold today and in what ways
does it not hold today? How does trade treat the distributional consequences of free trade? How does
a free flow of labor affect the theory of comparative advantage? What are the effects of increased trade
on jobs and wages? How does intra-firm trade contradict the theory of comparative advantage? How do
countries try to shape and influence their comparative advantage? How has international competition
changed with the proliferation of global supply chains? What are the implications of the emergence of
the global corporation?
Week 4 February 8: Economics of Global Finance: Introduction to the balance of payments and
exchange rates. What is the balance of payments? What transactions give rise to a receipt (export) of
dollars from foreigners? What is the meaning of a current account surplus (deficit)? Does the U.S.
current account deficit cost U.S. jobs? Can the United States continue to run current account deficits
indefinitely? What can policymakers do to reduce or eliminate the current account deficit? What are
the different types of financial flows? How do portfolio and direct investment flows differ? What is the
foreign-exchange market? What is meant by an appreciation (depreciation) of the dollar? How is the
value of the U.S. dollar determined? In a free market, what factors determine currency values? How is
the value of influenced by national policies? How is the value of China’s Yuan determined? What are the
economic consequences for China of preventing its currency from appreciating or depreciating in
accordance with market forces?
Week 5 February 15: International Economic Institutions: Introduction to the international economic
institutions with a specific focus on the World Trade Organization. What are the roles of the
International Monetary Fund, the World Bank, and the World Trade Organization? Why were they
created? How are they similar (different)? How has increased economic integration posed new
challenges for each institution? Why have these organizations been attacked by the anti-globalization
movement in the past? How has the stalemate in the Doha round of multilateral trade negotiations
affected the credibility of the WTO? What institutional reforms of the WTO are needed? What are the
WTOs strengths and weaknesses? Why are countries negotiating mostly bilateral and regional trade
agreements instead of multilateral agreements? What role does the International Labor Organization
play in international trade policy? Does the World Bank and the Regional Development Banks affect the
mission of the WTO? How has the formation of the BRICS Bank or the AIIB (Asian Infrastructure
Investment Bank affected the operations of the current international economic organizations?
Opinion Editorial Due
In writing the op-ed back up your opinion with research , statistics, and quotes. Recognize that
there are other viewpoints, but stick to your argument and persuade your readers of it. You may
want to find an issue/topic that means something to you, your family, or your community. Check
out Yale Global Online at http://yaleglobal.yale.edu for some other ideas for topics such as revival
of U.S. manufacturing , social networking , outsourcing and in-sourcing of jobs, global warming, and
human trafficking.
Bloc 2: U.S. Trade Policy and Relations
Week 6 February 22: U.S. Trade Policy: Content, Context, and Administration: What is U.S. trade
policy? What are the key elements of trade negotiations, import policy, and export policy? What role
does the Congress, the Executive Branch, and interest groups play in the making of U.S. trade policy?
Who is in charge of U.S. trade policy? Why has Congress delegated so much of its authority over trade
to the executive branch? Which congressional committees play a leading role in the making of trade
policy? What determines most members of Congress positions on trade? Why did Congress create the
Office of the United States Trade Representative (USTR)? How does the USTR coordinate the
development of U.S. trade policy? Why are so many different agencies involved in the process?
Week 7 March 1: The Trade Agendas of the Obama and Trump Administrations: What have been
Obama’s trade priorities? How have they differed from previous administrations? What are his
accomplishments? What are the trade policy priorities of the Trump Administration? What are the
differences between Democrats and Republicans on the trade issue? What are the forces for protection
and trade liberalization in the U.S. body politic? What are the tools for protection? Is the U.S. one of the
most open markets in the world? Why does organized labor tend to oppose trade liberalization? Why
have more white collar workers become anxious about trade liberalization? Has globalization upended
the U.S. consensus in favor of trade liberalization?
Week 8 March 8: U.S Economic Relations with China: How has China’s remarkable economic
transformation been accomplished? What are the key factors that contributed to its rapid growth?
How has China’s rapid growth affected U.S. exports and imports? Why has China’s large and growing
trade surplus with the United States been a top political issue? Why is China often branded an unfair
trader by some U.S. stakeholders? Why is China now trying to “rebalance” its economy from being led
by high levels of investment to high levels of consumption? What reforms does the Communist Party
have to pursue if it is to be successful in rebalancing China’s economy? How could these reforms be a
threat to the communist party and other vested interests such as the military and stakeholders in stateowned enterprises? What can the United States do to help create a more balanced trading relationship
with China?
SPRING BREAK: NO CLASSES (March 12-19)
Week 10 March 22: U.S. Economic Relations with the European Union: What is the EU and how is it
organized? How is trade policy developed and implemented in Brussels? How important are U.S.
trade and investment relations with the EU? Why are the two sides negotiating a freer trade and
investment agreement? What are the potential gains from closer economic ties? What are the
primary obstacles to a successful agreement? What impact could a broad agreement have on the
global trading system? What are the causes of the on-going euro-zone crisis? How does it affect U.S.
interests? Are current economic and other pressures threatening the European vision of ever closer
ties?
Week 11 March 29: Exam
Bloc 3: Selected Issues in Globalization
Week 12 April 5: Rising Economic Powers and the Global Economy: How have the BRICs (Brazil, Russia,
India, and China) transformed the structure of the global economy? Should their rise be feared or
welcomed? What are the main factors driving their economic rise? What challenges do the BRICs face
in continuing to grow at rapid rates? What has been the impact of the slump in commodity prices? How
is their rise leading to a dispersion of economic and political power? In a more multi-polar world who
will take leadership responsibility of the global economy? What are the strengths and weaknesses of
the G-7 or the G-20 in managing the global economy?
Week 13 April 12: U.S Manufacturing, Innovation, and the Global Economy: How has the U.S.
manufacturing sector been affected by globalization? What factors have driven large-scale declines in
U.S. manufacturing employment? Is there anything made in America anymore? What kinds of
manufacturing can still thrive in the United States? Why are some companies shifting production back
to the United States from China and other countries? How important is a strong manufacturing sector to
a strong economy? What are the links between manufacturing and U.S. innovation? Is there any
difference between producing $100 of semiconductor chips or $100 of potato chips? Should the U.S.
government try to “revive” the manufacturing sector? What has Obama tried to do in this regard?
Week 14 April 19: U.S. Labor and the Global Economy: What impact has globalization had on U.S. labor
markets? How can U.S. workers compete against foreign workers who earn far less? How can U.S.
workers compete against foreign workers who work for companies based in countries that impose
minimal health and safety standards? How has globalization affected the bargaining power of unions
and workers? What role is globalization playing in depressing median wages or contributing to rising
income inequality? What are the most promising areas of the U.S. services sector for employment?
Briefing Memo Due
Week 15 April 26: Economic Integration in the Americas: How has the North American Free Trade
Agreement (NAFTA) transformed economic relations in North America? Why did Mexico propose and
sign the NAFTA agreement? Why did the United States (Papa Bush and Jim Baker) agree to enter into
the negotiation? Why has NAFTA been so controversial in the United States? Why have claims of jobs
created and jobs lost by the NAFTA been so misleading? How has the United States tried to extend
NAFTA to the rest of Latin America? Why have the Central American countries signed on to a version of
NAFTA and Brazil and its other MERCOSUR partners rejected this approach to regional integration? How
might the Trump Administration renegotiate the NAFTA agreement? What would be the impact of U.S.
withdrawal from NAFTA?
Week 16 May 5: Wrap-up of Loose Ends and Course Evaluation
Extra Credit Essays Due