Nuremberg Research Seminar in Economics on 21 June 2023 – LG H2 (!)
You are invited to join the weekly Nuremberg Research Seminar in Economics on 21 June 2023, from 13.15 to 14.45 pm. The seminar will be held in room LG H2. Chad Bown (Peterson Institute for International Economics) will be talking about „How to understand current US industrial policy and its ‘worker-centered’ trade policy through the lens of automotive supply chains”.
More information can be found here:
This presentation summarizes two ongoing strands of research. Bown (2023) examines the provisions impacting the automotive supply chain via the industrial policy embodied in the Inflation Reduction Act (IRA) of 2022. IRA provoked a transatlantic trade spat. After the law was passed, the Biden administration wrote controversial rules to implement the legislation in ways that addressed some of the concerns raised by the European Union and other its other allies. These regulations are expected to have complex effects that, in some instances, may offset the intended impact of other provisions in the original legislation. This paper examines preliminary data and explores how the law, its implementing regulations, policy decisions on leasing, as well as potential critical minerals agreements all have the potential to affect the electric vehicle (EV) supply chain. In a second paper, Bown and Claussen (2023) also use the automotive supply chain to examine the facility-specific Rapid Response Labor Mechanism (RRM), the novel dispute settlement provision introduced in the US-Mexico-Canada Agreement (USMCA) that went into force on July 1, 2020. The RRM is a focused attempt to tackle one specific, but immense, thorn in the side of North American economic integration that has bedeviled policymakers for decades – the lack of economic progress for Mexican workers. The paper describes how the RRM process works, as well as the considerable financial and human resources the two governments, including the US government through technical assistance, must bring to bear to operationalize it. Through that lens, this novel instrument thus also shares characteristics with policies of trade facilitation. The paper then reports on how governments have used the RRM over its first three years and situates this use within the political economy of the North American auto industry. We conclude with lessons learned so far and the potential for transposing facility-specific RRM-like structures for labor or other areas, like environment, into future trade agreements.