1AC Northwestern

1AC – Investment

No deal before the truce ends—that causes tit-for-tat retaliation to resume and
is the single biggest threat to the US economy
Bryan 1/30 (Bob, Bob Bryan is a policy reporter at Business Insider. He graduated from the
University of North Carolina at Chapel Hill with degrees in journalism and political science
“Trump's trade talks with China could decide the fate of the trade war and the US economy's
future” https://www.businessinsider.com/trump-china-trade-war-talks-could-affect-tariffs-us-
economy-2019-1)
As the deadline to reach a deal rapidly approaches , officials from the Trump administration and the
Chinese government are set to meet in Washington on Wednesday to try to end the US-China trade war.
The Trump team, led by US Trade Representative Robert Lighthizer, is set to sit down with a Chinese
delegation led by Vice Premier Liu He, the country's top economic official.
The two sides are facing down a March 1 deadline to find an agreement that would put a permanent pause on the escalation of a
trade war that has seen tariffs slapped on $360 billion worth of goods sent between the two nations.
But with
a large agenda of economic issues to discuss and a growing number of noneconomic
complications, the US and Chinese teams will have to thread a small needle to get a deal done.
Pressure on both sides to make a deal
The talks between Lighthizer and Liu are the second major meeting scheduled between the two countries since President Donald
Trump and Chinese President Xi Jinping hashed out a temporary truce at the G20 summit in December. Midlevel officials from the
two countries met in China earlier this month.
As part of the agreement, the
two sides agreed to not escalate the trade fight for 90 days, setting up
the March 1 deadline. After that date the US is scheduled to increase its 10% tariffs on $200
billion worth of Chinese goods to 25%, and Trump has threatened to hit the remaining $255
billion of Chinese imports with tariffs, too.
Such an increase would most likely cause major ripple effects in the US economy. Close to half
of economists The Wall Street Journal surveyed in December cited the trade war as the biggest
threat to the US economy.
With the prospect of a major escalation just 30 days away , both the US and China have a lot of reasons to get a
deal done.
For Beijing, the trade war is weighing on an already slowing economy. Internal factors such as high
indebtedness are putting major strains on the Chinese economy, and the tariffs are not helping the situation.
The Trump administration is also facing economic concerns, and distaste for the trade war among key
political groups puts the president in a tough spot.
"Republicans in Congress aren't going to find additional tariffs really a winner back home, and they are already facing concern in
large parts of the country over the impact of the partial government shutdown," Mary Lovely, an economics professor at Syracuse
University, told The Wall Street Journal on Wednesday. "More tariffs and failure to get a deal will ultimately seem to people like
further failure of the government."
A long way to go
President Donald Trump sits between Boeing Chairman and CEO Dennis Muilenburg (R) and Treasury Secretary Steve Mnuchin (L)
during a round table at Boeing in St. Louis, Missouri, U.S. March 14, 2018.Trump with Treasury Secretary Steve Mnuchin and
Boeing's chairman and CEO, Dennis Muilenburg. Reuters
Butdespite the pressure on the two countries to get a deal done, major differences still
remain.
The US is likely to insist that China make significant changes to the way the country does
business, such as eliminating subsidies for favored companies and cracking down on the theft of US intellectual property.
But the team from Beijing is expected to offer merely superficial changes to its economic system, while
committing to purchasing large quantities of US goods to help lower the US-China trade imbalance.
There are, however, some encouraging signs the Chinese government is already taking some of the reforms that the US requested
seriously. On Wednesday, Beijing moved up the timetable for a new law that would strengthen intellectual-property protections
and, in theory, increase market access for non-Chinese companies.
While the move is part of a broader internal reform plan, whether China is truly committed to its promises is a
key sticking point in the trade negotiations.
Also adding to the difficulties is the lack of cohesion on the Trump team. Lighthizer has
generally been more hawkish toward China , while the administration's free-trade advocates —
most notably Treasury Secretary Steven Mnuchin — have supported a short-term deal to lift the tariffs.
These opposing ideas have previously complicated talks, and Susan Aaronson, a senior fellow at the Centre for International
Governance Innovation, has warned they could do so again.
"The Trump administration still lacks any clear objectives, strategy, or metrics for success in its
trade talks with China," Aaronson said in a statement. "Without such a plan, they are sending confusing
messages to Chinese bureaucrats and mocking what trade is about: mutual benefit."
The Huawei problem
Meng WanzhouHuawei's chief financial officer, Meng Wanzhou, arriving at a parole office with a security guard in Vancouver, British
Columbia. Darryl Dyck/The Canadian Press via AP
Complicating matters further is the ongoing argument over the US's charges against the
Chinese tech giant Huawei.
The US officially submitted an extradition request for Huawei CFO Meng Wanzhou on Tuesday, about two months after the
executive was arrested in Canada on suspicion of fraud and of violating of American sanctions on Iran. The request came the day
after the US also charged Huawei with the theft of trade secrets. Meng and Huawei have denied the allegations.
Beijing immediately condemned the move.

Prolonged tariff uncertainty will kill the US economy – damages investment,

business confidence, and has long term knock-on effects.
Davis 18 (Steven, 8/12/18, William H. Abbot Distinguished Service Professor of International
Business and Economics at the University of Chicago Booth School of Business and Senior Fellow
at the Hoover Institution. “Trump’s Trade Policy Uncertainty Deters Investment”
http://econbrowser.com/archives/2018/08/guest-contribution-trumps-trade-policy-uncertainty-
deters-investment)
Trade policy under the Trump administration also has a capricious, back-and-forth character
that undermines a rules-based trading order. Less than three months after withdrawing from the TPP, the
President said he would consider rejoining for a substantially better deal, only to throw cold water on the idea a few days later.
Initially, the administration justified steel tariffs on the laughable grounds that Canada, for example, presents a national security
threat. Later, President Trump tweeted that tariffs on Canadian steel were a response to its tariffs on dairy products. Some countries
get tariff exemptions, some don’t. Exemptions vary in duration, and they come and go in a head-spinning manner. Two days ago
(August 10), the President tweeted that he “just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey” for
reasons unclear. For a fuller account of tariff to-ing and fro-ing under the Trump administration, see the Peterson Institute’s “Trump
Trade War Timeline.”
The rhetorical attacks and capricious nature of the Trumpian approach to tariff policy also
invites retaliation. Tit-for-tat tariff hikes between the United States and China are well
underway. Canada, Mexico and the European Union have also imposed new tariffs on American imports. Many of the
retaliatory tariffs fall on American farmers, prompting the administration to promise up to $12
billion in aid to help farmers copewith the costs of the President’s trade policy battles.
Needless, added complexity is another feature of Trump administration trade policy. The
Department of Commerce has rolled out a slow-working, burdensome process for requesting
company-specific exemptions from the new steel and aluminum tariffs, as neatly recounted in a Wall
Street Journal editorial:
[C]ompanies must submit a request attesting that their imports aren’t made in the U.S. in “a satisfactory quality” or
“sufficient and reasonably available amount.” Companies must state the uses for their steel product, their average annual
consumption of the product, as well as the number of days required to take delivery, manufacture and ship the product.
They must also estimate the maximum and minimum composition of 24 chemical elements in their products including
molybdenum, antimony and vanadium. There are dozens of other queries, but we’ll spare you.
Oh, and a separate request is required for each width, length, grade shape, and form of steel or aluminum product. A
single company, Primrose Alloys, has submitted more than 1,200 steel product requests, according to Commerce’s
database. All 14 that have been reviewed so far were denied.
Businesses may also submit statements to support their requests, which naturally turn political…
Crony capitalism, political favoritism, and extra sand in the gears of commerce – here we come!
One consequence of all this is a tremendous, Trumpian upsurge in anxiety and uncertainty
about trade policy and its economic fallout. Exhibit 1 displays a monthly index of U.S. Trade Policy Uncertainty
(TPU) that I developed with Scott Baker and Nick Bloom. It reflects the frequency of articles in American newspapers that discuss
economic policy uncertainty and trade policy, in particular. Since Trump’s surprise victory in the November 2016 election, the
average TPU index value is up nearly five-fold relative to 2013-15 . The full history of the U.S. TPU Index
(available from 1985 at PolicyUncertainty.com) shows no other episode of similarly elevated uncertainty, except for the period from

1992 to 1994 due to NAFTA-related concerns.

Exhibit 1 also shows an analogous TPU Index for Japan that I developed with Elif Arbatli, Arata Ito, Naoko Miake and Ikuo Sato.
Movements in the two TPU indices are remarkably coherent since Trump’s election. Both countries’ TPU indices surge on Trump’s
election win in November 2016, his presidential inauguration and withdrawal from the TPP in January 2017, and the escalation of
trade policy tensions since February 2018.
The exhibit supports two conclusions: First, the surge in trade policy uncertainty since
November 2016 emanates from a course change in the United States. Second, the U.S. shift is
reverberating around the globe.
One question raised by these developments is whether, and how, firms are reassessing their capital investment
plans in light of recent tariff hikes and fears of more to come . By raising input costs, domestic
tariff hikes undercut the business case for some investments. Of course, tariff hikes might also raise
domestic investment in newly protected industries. Retaliatory tariff hikes by trading partners affect domestic investment by
curtailing the demand for U.S. exports. An
uncertain outlook for trade policy gives firms in all industries a
reason to delay investments , while they wait to see how trade policy disputes unfold. The
complexity and discretionary nature of tariff exemptions further compounds the uncertainty
facing business decision makers.
The monthly Survey of Business Uncertainty (formerly Survey of Business Executives), fielded by the Federal Reserve Bank of Atlanta,
offers some evidence on these matters. The SBU elicits information about each firm’s expectations and uncertainty regarding its own
future capital expenditures, sales growth, employment, and costs. I developed the SBU in collaboration with Nick Bloom of Stanford
and David Altig, Mike Bryant, Brent Meyer and Nick Parker of the Atlanta Fed.
The July 2018 SBU includes the following question: “Have the recently announced tariff hikes or concerns about retaliation caused
your firm to re-assess its capital expenditure plans?” Yes, said about one-fifth of our respondents.
As Exhibit 2 shows, the
share of firms reassessing their capital expenditure plans because of tariff
worries is higher for goods-producing firms than service providers. It’s 30 percent for
manufacturers and 28 percent in retail & wholesale trade, transportation and warehousing. In contrast, it’s
only 14 percent among all service providers in our sample. These sectoral patterns make sense, given that manufacturing firms, for
example, are more engaged in international commerce than most service providers.
We also asked firms how they are reassessing their capital expenditure plans in light of tariff worries. Exhibit 3 provides information
on this issue. Among firms reassessing, 67 percent have placed some of their previously planned capital expenditures for 2018–19
“under review,” 31 percent have “postponed” or “dropped” previously planned expenditures, 14 percent have “accelerated” their
plans, and 2 percent (one firm) added new capital expenditures for 2018–19.
Finally, we
asked firms how much tariff worries affect their previously planned capital
expenditures. Among firms re-assessing, an average 60 percent of their capital expenditure
plans are affected. The predominant form of reassessment is placing previously planned capital expenditures “under review.”

Let’s sum up the U.S. survey evidence: About one-fifth of firms in the July 2018 SBU say they are reassessing capital expenditure
plans in light of tariff worries. Among this one-fifth, firms have reassessed an average 60 percent of capital expenditures previously
planned for 2018–19. The main form of reassessment thus far is to place previously planned capital expenditures under review. Only
6 percent of the firms in our full sample report cutting or deferring previously planned capital expenditures in reaction to tariff
worries. These findings suggest that tariff worries have had only a small negative effect on U.S. business investment to date.
Still, there are sound reasons for concern. First,
30 percent of manufacturing firms report reassessing capital
expenditure plans because of tariff worries, and manufacturing is highly capital intensive. So,
the investment effects of trade policy frictions are concentrated in a sector that accounts for much of business investment. Second,
12 percent of the firms in our full sample report that they have placed previously planned capital expenditures under review. Thus,
the negative effects of tariff worries on U.S. business investment could easily grow .
Third, trade policy tensions between the United States and China have only escalated since our
survey went to field. As of July 6, the U.S. began imposing tariffs on $34 billion worth of Chinese imports with another $16
billion scheduled to take effect on August 23. China responded by imposing tariffs on $34 billion in U.S. exports, coupled with threats
to slap new tariffs on an additional $16 billion. Responding in turn, the President ordered the U.S. Trade Representative (USTR) to
begin the process of imposing a 10 percent tariff on another $200 billion in Chinese imports. China promptly vowed to retaliate. On
August 1, the President directed the USTR to consider raising tariffs on $200 billion of Chinese imports from 10 to 25 percent. China
responded by threatening additional duties on $60 billion worth of U.S. imports, and warning that it could adopt further
countermeasures. These developments
suggest that the negative effects of tariffs and tariff worries
on U.S. business investment could grow much larger.
What about the effects of Trumpian trade policy uncertainty on business investment in other countries? A recent Reuters survey of
Japanese firms offers some evidence. (Many thanks to Arata Ito for alerting me to this survey and for summarizing the results in
English. See here for a related article in English.)
The Reuters survey, which went to field from July 2 to 13, includes the following question: How is your firm likely to change its
previously planned capital expenditure for the [2018] fiscal year in response to rising trade tensions between the U.S. and China and
Europe? 253 large- and medium-sized firms responded.
Three results: First, 24 percent of respondents to the Reuters survey report a wait-and-see stance. That is, they may defer or cut
their previously planned capital expenditures for fiscal year 2018 in response to trade policy tensions. Second, the share of firms
adopting a wait-and-see stance is larger for manufacturing firms, echoing our finding in the SBU. Third, about half the firms that
produce iron and steel, nonferrous metals, textiles, pulp or paper are taking a wait-and-see stance. In short, the survey evidence
says that Trumpian trade policy uncertainty also discourages business investment abroad. This type of response in other countries
dampens the demand for U.S. exports.
Fortunately, the negative investment effects of Trumpian trade policy uncertainty appear to be modest thus far, and they occur
against a backdrop of strong macroeconomic performance – at least in the United States. Under
less favorable
circumstances , or if trade barriers continue to rise, the Trumpian approach to trade policy has
the potential to cause a good deal more economic pain.
In closing, I should note that the harmful consequences of tariff hikes and trade policy uncertainty
extend well beyond short-term investment effects. For other critiques of the Trumpian approach to trade
policy, see the worthy commentaries by Robert Barro, Alan Blinder, John Cochrane, Doug Irwin, Mary Lovely and Yang Liang, Greg
Mankiw and Adam Posen, among others.

The risk of harm is high— even leaving the threat of tariffs on the table sends
shock waves throughout the US economy
Handley and Limão 17 (Kyle and Nuno, 2017, Handley Assistant Professor of Business
Economics and Public Policy PhD University of Maryland 2011 MSc London School of Economics
2006 BS University of Wisconsin 2000 & Nuno Limão- Ph.D. Columbia University, 2001 BSc
London School of Economics, 1996 “Policy Uncertainty, Trade, and Welfare: Theory and
Evidence for China and the United States†” American Economic Review 2017, 107(9): 2731–
2783_
One of the most important economic developments of the last 20 years is China’s integration
into the global trading system. The world’s share of imports from China between 1990 and 2010 rose
from 2 to 11 percent. For the U nited S tates, that increase was even larger, rising from 3 to 19
percent. This has translated into more than a tenfold increase in the share of US manufacturing expenditure on Chinese goods
and there is evidence that this has contributed to declines in both US prices (cf. Auer and Fischer 2010) as well as manufacturing
employment and local wages (cf. Autor, Dorn, and Hanson 2013). Figure 1 shows that most of this trade boom occurred after China’s
accession to the World Trade Organization (WTO), which has led some authors to argue that the accession may have reduced trade
costs faced by Chinese exporters.1 But US-applied trade barriers toward China remained largely unchanged at that time.
We argue that China’s WTO accession significantly contributed to its export boom to the U nited
S tates through a reduction in US trade policy uncertainty . Specifically, China obtained
permanent most favored nation (MFN) status with accession, which ended the annual US threat to
impose high tariffs . China obtained temporary MFN in 1980 and never lost it, but it came
close. In the 1990s, after the Tiananmen Square protests, Congress voted on a bill to revoke MFN status every year and the House
passed it three times. Had MFN status been revoked, the U nited S tates would have reverted to Smoot-
Hawley tariff levels and a trade war may have ensued. In 2000, for example, the average US MFN tariff was 4
percent, but if China had lost its MFN status it would have faced an average tariff of 31 percent. After WTO accession, the Chinese
by establishing “the permanent normal trade relationship with
Foreign Trade Minister pointed out that
China, [the U nited S tates] eliminated the major long-standing obstacle to the improvement of
Sino-US… economic relations and trade.”2
To examine this argument, we build a model that allows us to interpret, measure, and quantify the
effects of trade policy uncertainty (TPU). We obtain structural estimates of key policy uncertainty parameters and use
them to quantify the implications for aggregate prices, the welfare of US consumers, and other outcomes. We focus on the role of
TPU for investment and prices in part because of their importance in the context of the MFN debate. For example, the
US
decision to delink MFN from China’s human rights record was described as having “removed a
major issue of uncertainty” and MFN renewal would have an impact on investment and
reexports that “will remove the threat of potential losses that would have arisen as a result of
revocation.” US business leaders argued that “…the imposition of conditions upon the renewal
of MFN [was] virtually synonymous with outright revocation. Conditionality means
uncertainty .”3 They lobbied Congress to make MFN permanent (Zeng 2003). At the same time, congressional
research reports highlighted the higher consumer prices that would result if MFN was ever
revoked (Pregelj 2001). We will argue that our approach and results have broader important
implications and contribute to the growing literature on the impact of economic policy
uncertainty and the role of trade agreements .
Our model captures the interaction between uncertainty and investment by modeling the
latter as sunk costs and thus generating an option value of waiting. This basic theoretical
mechanism is well understood (see Bernanke 1983; Dixit 1989), and there is some evidence that
economic uncertainty, as proxied by stock market volatility, leads firms to delay investments
(Bloom, Bond, and van Reenen 2007). In the international trade context, there is evidence of
sunk costs to export market entry (see Roberts and Tybout 1997), but most empirical research
on uncertainty’s impact on export dynamics has focused on exchange rate uncertainty and finds
small or negligible impacts (IMF 2010). In a general equilibrium setting, Impullitti, Irarrazabal,
and Opromolla (2013) find a sunk cost model with heterogeneous firms and uncertain efficiency
fits observed aggregate trade dynamics well.
Much less is known about the implications of economic policy uncertainty. Early theoretical contributions to this issue, such as
Rodrik (1991), recognized the difficulty in measuring, identifying, and quantifying the causal effects of policy uncertainty. Recent
work is tackling these difficult issues. For example, Baker, Bloom, and Davis (2016) construct a news-based index of policy
uncertainty and find it helps predicting declines in aggregate output and employment. Our focus and empirical approach are
considerably different. We use applied policy and counterfactual policy measures , both of which are
observable in our setting, to directly estimate the effects of policy uncertainty on economic activity . In
order to identify the effects of TPU, we explore both variation over time and countries (capturing
the differential reduction in the probability of a trade war after WTO accession) and across industries (since they would face
different tariffs if a trade war broke out and differ in their sunk costs).
To guide the estimation and quantification we develop a dynamic heterogeneous firms model with TPU. We build on Handley and
Limão (2015) and extend it in three ways. First, firms can invest not only to enter foreign markets but also to upgrade their export
technology. This allows changes in uncertainty to affect the extensive margin (new exporters) and the intensive margin (continuing
exporters with upgraded technology). 4 Second, the exporting country is allowed to be large enough to affect the importer's
aggregate outcomes. Otherwise, TPU has no significant impact on the importer. Third, entry into production is endogenous and
subject to sunk entry costs such that TPU affects the formation and reallocation of firms. The model provides a number of insights.
We highlight that TPU
has both a direct and indirect effect on firm outcomes . The direct effect of
TPU is to lower entry through an option value of waiting for exporters (fear of higher protection) and
domestic firms (fear of low protection). The effect of these entry reductions is to increase the price
index of the importer, which is central to the welfare gains from reforms that lower TPU. This
price index increase has an indirect positive effect on exporter and domestic entry that can dominate for exporters (if initial
protection is high) or for domestic firms (if initial protection is low).
As preliminary evidence and motivation for why we require a theoretical framework, consider
Figure 2. In panel A we plot Chinese average export growth to the United States between 2000
and 2005 by sector against the (log) difference of the column 2 and MFN tariffs in 2000. On
average, those sectors facing a relatively higher initial tariff threat in the case of MFN revocation
experienced faster export growth and larger declines in prices, as shown in panel B. The exercise
is suggestive, but also raises questions regarding the identification of partial effects and the
quantification of the general equilibrium effects, both of which the model helps to address. First,
what is a theory-consistent measure of uncertainty? The model shows it is the proportion of
profits that Chinese exporters would lose if China ever lost its MFN status. We map this to
observable tariff measures and then find evidence that our measure is relevant to exporters.
Second, what are the necessary controls and assumptions required to identify the TPU effect
and what structural parameters can we estimate? The model generates a tractable TPU-
augmented gravity equation that allows us to consistently aggregate individual firm decisions to
the industry level and identify the change in the probability of MFN being revoked. Moreover,
the model generates a relationship between ideal import price indices and TPU that we also
estimate. Third, the model predicts these effects should only apply to trading partners where
TPU changed and in industries with sunk costs of exporting.
We use variation in policies, export values, and prices across thousands of products to
estimate the effects of TPU. We find nonparametric and parametric evidence that Chinese
export growth in the period 2000–2005 was higher in industries with higher initial TPU . The
effect is robust to controlling for applied tariff and nontariff barriers, transport costs, and
sector-specific growth trends. The effect is only present in industries with export sunk costs ,
which we identify by exploring persistence in export behavior. Moreover, the effect is also robust to allowing for a
broader set of shocks than those present in the theoretical model: namely, unobserved shocks
to import demand (TPU has no direct effect on other US imports) and export supply (US TPU
toward China has no direct effect on Chinese exports to non-US destinations), which rules out a large set of potential
confounding factors .
We also construct industry-level ideal import price indices following Feenstra (1994) and find larger reductions in
industries with initially higher TPU. This is the effect the model predicts due to new imported varieties (for which we
find direct evidence) and technology upgrading. The price effect is also robust to controlling for alternative
variables and unobserved import demand shocks and it is only present in high sunk cost
industries. The partial effect of reducing TPU was to lower the average US industry price indices for Chinese imports by at least
15 log points and the corresponding aggregate index by slightly more.
The significant partial effects of TPU on import prices leads us to quantify its aggregate effects. In Section III we characterize the
general equilibrium effects of TPU by solving for the model in changes. We derive the impacts on firm entry, sales, and prices
(foreign and domestic) and how they depend on key features of the policy regime: current and future tariffs and the probability of
transitioning between them. Combining this framework with a nonlinear estimate of the TPU-augmented gravity equation, we
identify the reduction in the probability of MFN revocation. To
isolate and quantify the aggregate effects of
reducing TPU we then evaluate the impacts of the estimated shock to this structural parameter .
The counterfactual implies an aggregate Chinese export increase of 32 log points, which is about one-third of the observed growth in
this period. The predicted changes in the US import price index, domestic manufacturing firm sales, employment, and entry are also
consistent with the observed changes during this period. The counterfactual import penetration if TPU had remained in place
between 2002 and 2010 would have been substantially lower, as shown by the dashed line in Figure 1.
We also contribute to the long-standing question of the aggregate gains from trade. Recent work by Arkolakis, Costinot, and
Rodríguez-Clare (2012) shows that import penetration and trade cost elasticities are sufficient statistics to compute those gains in a
class of models. That is also the case for the deterministic version of our model, and so the gains from trade, or autarky cost,
provides a useful benchmark. However, under TPU those are no longer sufficient statistics and we require the change in the ideal
price index. We
estimate that TPU increased that US price index (for tradables) by one-half as much as
fully eliminating trade with China, or the equivalent of a permanent tariff increase of 13
percentage points . So the consumer welfare cost from TPU was about one-half of the cost of
prohibiting all Chinese imports.
TPU plays a key role in evaluating the impacts of international trade agreements more
broadly . Promoting trade is a central goal of the WTO, but Rose (2004) argues this institution has not succeeded whereas others
argue it has (cf. Subramanian and Wei 2007). Our work highlights a trade promotion channel that, until recently, was largely missing
from the analysis of trade agreements. The theoretical literature has emphasized that the central role of
the General Agreement on Tariffs and Trade (GATT)/WTO is to internalize terms-of-trade effects (Bagwell and
Staiger 1999). There is now evidence that countries possess market power , so their tariffs can
affect their terms-of-trade, and exploit it before an agreement but less so afterward (Broda,
Limão, and Weinstein 2008; Bagwell and Staiger 2011; Ludema and Mayda 2013). Moreover, the welfare cost of trade
wars in the absence of such agreements are potentially large (cf. Ossa 2014). Recent theoretical work has
focused on TPU. Limão and Maggi (2015) examine the role of risk aversion in the design and impact of agreements that target TPU;
Horn, Maggi, and Staiger (2010) and Amador and Bagwell (2013) rely on TPU and imperfect contracting to explain a specific feature
of such agreements—the use of tariff ceilings or bindings. Handley (2014) provides empirical evidence that reducing bindings
increases foreign product entry. Our framework allows for a quantification of reducing such bindings; we also provide direct
evidence of the welfare gains from reducing TPU and offer qualitatively new predictions .
Specifically, agreements that allow a country to commit to a more stable and predictable
trade policy, as the WTO claims to, can lower the probability of large swings in protection and thus
increase entry not only by foreign firms but also by domestic ones in the import competing
sector (and can also increase their domestic sales and employment). This outcome for domestic firms is possible when tariffs are
sufficiently high, as they were when GATT 1947 was signed, which points to one of GATT’s potential benefits.
The framework can also be applied ex ante to evaluate potential TPU shocks . We illustrate
this through a range of counterfactual exercises where the United States unilaterally
threatens to abandon or renegotiate all its trade agreements, which is extreme but plausible
under the forty-fifth US president’s administration. An increase in the US threat of higher tariffs on all its
partners would generate considerable consumer welfare costs even if no tariffs were actually
changed . If the threat was raised to a level similar to what China faced then the resulting loss
in US consumer welfare would be equivalent to one-third of the cost of trade autarky .
Our research also complements the recent empirical work on the impact of Chinese exports on developed countries. Bloom, Draca,
and van Reenen (2016) assess the impact of Chinese exports on wages and employment in the European Union while Acemoglu et
al. (2016) and Caliendo, Dvorkin, and Parro (2015) focus on the United States. Pierce and Schott (2016) study the effects of Chinese
exports on US manufacturing employment and, as an intermediate step, they estimate the reduced-form effect of column 2 tariffs
on exports.5 Our papers differ in important ways. First, our focus is on the trade, price, and consumer welfare effects. Second, we
provide evidence for the central mechanism: sunk costs of exporting. Third, we develop a theoretical framework that contributes to
the literature on agreements and gains from trade while allowing for the structural identification of parameters. Among other
things, we explore the counterfactual exercises to isolate and quantify the aggregate effects of TPU on several outcomes and
decompose them: e.g., we find that a large fraction of the trade and price changes is explained by a mean-preserving compression of
the tariff and the rest is due to locking in tariffs below the mean.
We present the basic framework and derive the TPU-augmented gravity equation in Section I, followed by the empirical analysis in
Section II. The general equilibrium solution in Section III is used for the structural estimation and quantification in Section IV. The
appendices contain information on extensions, derivations, data, and robustness tests.
The tariff effect is quantifiable –uncertainty sets negative trade exepctations
Kirchner 9/30/18 (Stephen, PHD in Economics from the University of New South Wales.
Program Director, Trade and Investment, United States Studies Centre, University of Sydney. A
senior fellow at the Fraser Institute in Canada. “US foreign investment a casualty of Donald
Trump's trade war” https://www.afr.com/opinion/columnists/us-fdi-a-casualty-of-donald-
trumps-trade-war-20180927-h15z9x )
As the United States and China escalate their trade war, the costs of rising tariff protection
loom increasingly large for the world economy. But these costs are just the start of the
economic fallout. The economic uncertainty generated by an open-ended trade war is also
weighing on cross-border investment.
Foreign direct investment (FDI) in the United States recorded a $US8.2 billion ($11.4 billion)
outflow in the second quarter of 2018. Outflows of FDI are a rare event for a capital-importing country
like the US, even at a quarterly frequency.
FDI in the US fell from a record $US486 billion in 2016 to $292 billion in 2017, a 40 per cent decline. While inward FDI globally declined by 23 per cent over the same period,

this still leaves the U nited S tates underperforming in attracting long-term investment from
abroad.
President Donald Trump hopes his rising tariff wall will motivate US and foreign businesses to

increase their investment and production in the United States. But the uncertainty generated
by the trade war is only likely to harm long-term investment, particularly on the part of
foreign investors, who are wary of the potential disruption to global supply chains.
The data are already contradicting one of the main rationales for Trump's tariffs.
Thanks to the Economic Policy Uncertainty Index developed by Scott Baker, Nicholas Bloom and Steven Davis, we can quantify this
uncertainty and its economic effects on the United States, Australia and the world.
In January 2017, as the newly elected President pulled the US out of the Trans-Pacific Partnership, the Global Economic Policy
Uncertainty Index was higher than during the Asian crisis, the September 11, 2001, terrorist attacks, the 2008-09 global financial
crisis and the 2011 European debt crisis.
In an environment of increased uncertainty, business, investors and consumers become more
cautious . Investment spending is particularly vulnerable because uncertainty increases the
option value of delaying investment decisions.
Investment spending is also a major driver of international trade, which is dominated by trade
in intermediate and capital goods.
In my report, State of Confusion, I quantify the effects of economic policy uncertainty on trade and cross-border investment for the
US and Australia. Consistent with other researchers, I find that foreign
direct investment is very sensitive to
policy uncertainty . A one standard deviation increase in US economic policy uncertainty
reduces FDI in the US by 2.6 per cent after three quarters.
While there are other factors at work, not least the substance of the economic and trade policies actually implemented,
uncertainty is itself costly and has powerful cyclical effects.

Economic decline leads to nuclear war

Stein Tønnesson 15, Research Professor, Peace Research Institute Oslo; Leader of East Asia
Peace program, Uppsala University, 2015, “Deterrence, interdependence and Sino–US peace,”
International Area Studies Review, Vol. 18, No. 3, p. 297-311
Several recent works on China and Sino–US relations have made substantial contributions to the current
understanding of how and under what circumstances a combination of nuclear deterrence and
economic interdependence may reduce the risk of war between major powers . At least four
conclusions can be drawn from the review above: first, those who say that interdependence may both inhibit and
drive conflict are right. Interdependence raises the cost of conflict for all sides but asymmetrical or
unbalanced dependencies and negative trade expectations may generate tensions leading to
trade wars among inter-dependent states that in turn increase the risk of military conflict
(Copeland, 2015: 1, 14, 437; Roach, 2014). The risk may increase if one of the interdependent countries is governed by an inward-
looking socio-economic coalition (Solingen, 2015); second, the risk of war between China and the US should not just be analysed
bilaterally but include their allies and partners. Third party countries could drag China or the US into confrontation; third, in this
context it is of some comfort that the three main economic powers in Northeast Asia (China, Japan and South Korea) are all deeply
integrated economically through production networks within a global system of trade and finance (Ravenhill, 2014; Yoshimatsu,
2014: 576); and fourth, decisions
for war and peace are taken by very few people, who act on the basis
of their future expectations. International relations theory must be supplemented by foreign policy analysis in order to
assess the value attributed by national decision-makers to economic development and their assessments of risks and opportunities.
If leaders on either side of the Atlantic begin to seriously fear or anticipate their own nation’s decline
then they may blame this on external dependence, appeal to anti-foreign sentiments,
contemplate the use of force to gain respect or credibility, adopt protectionist policies, and
ultimately refuse to be deterred by either nuclear arms or prospects of socioeconomic calamities.
Such a dangerous shift could happen abruptly , i.e. under the instigation of actions by a third party – or against a
third party.
Yet as long as there is both nuclear deterrence and interdependence, the tensions in East Asia are unlikely to escalate to war. As
Chan (2013) says, all states in the region are aware that they cannot count on support from either China or the US if they make
provocative moves. The
greatest risk is not that a territorial dispute leads to war under present circumstances
but that changes in the world economy alter those circumstances in ways that render inter-
state peace more precarious. If China and the US fail to rebalance their financial and trading relations (Roach, 2014) then
a trade war could result, interrupting transnational production networks, provoking social distress, and exacerbating nationalist
emotions. This
could have unforeseen consequences in the field of security, with nuclear
deterrence remaining the only factor to protect the world from Armageddon , and unreliably
so . Deterrence could lose its credibility : one of the two great powers might gamble that the other
yield in a cyber-war or conventional limited war, or third party countries might engage in conflict with each other,
with a view to obliging Washington or Beijing to intervene.

Tariffs make even mild economic decline irrecoverable – spooks allies and
makes cooperation impossible – and, Trump reacts with even more tariffs,
spiraling the economy deeper
Rampell 12/24 – Catherine Rampell is a syndicated columnist with the Washington Post
(“Trump is set to make a recession so much worse”, SF Chronicle (originally published WaPo),
Dec. 24, 2018, https://www.sfchronicle.com/opinion/article/Trump-is-set-to-make-a-recession-
so-much-worse-13489619.php)
- 2008 was a close call averted by trade – Smoot-Hawley’s Trump after a downturn
The vital signs aren’t good. The S&P 500 has fallen more than 10 percent since its September peak,
which technically puts us in “correction” territory . In the past few weeks, markets whipsawed over
whether we do or do not have a trade deal with China (we don’t) and whether President
Trump will further jack up tariffs on Chinese-made goods ( still unclear ).
Stock wobbles alone don’t necessarily imply an immediate downturn, of course. (They “forecast nine of the
past five recessions,” Nobel laureate Paul Samuelson once quipped.) But consumers also report rising pessimism to

pollsters . Virtually every independent forecaster foresees a slowdown once the sugar rush of
Trump’s tax cuts wears off in the next year or so. And in a recent survey of economists by the Wall
Street Journal, more than half predicted that we’d have a full-blown recession by 2020 .
Statistically speaking, given how long the economy has been growing, a recession is overdue — and the eventual
collapse may bear Trump’s fingerprints . After all, his new trade barriers have lifted manufacturing costs, closed off markets and
clouded the future for American firms with global supply chains. Economists say Trump’s trade war is the biggest threat to

the U.S. economy in 2019.

Yet there’s one thing we can expect with reasonable conviction: Even if Trump isn’t the direct cause of the next

recession, he’s likely to make it so, so much worse .

There are, alas, many ways the administration is likely to bungle a recession response . The first issue is
that Trump has already shot most of our fiscal bullets, leaving us with less ammunition when we
actually need it.
At times, it’s justified to run up deficits: specifically, during a recession. When the private sector is shrinking, the public sector helps plug the shortfall
(through higher spending and/or tax cuts). When the economy is good, however, economists advise shrinking the deficit as
much as possible or even running a surplus.
Instead, Trump has done the opposite.
Plus, whatever the actual cost, the Trump-led GOP seems poised to block greater spending during the next recession. National Economic Council
Director Larry Kudlow opposed President Barack Obama’s major stimulus package in the last downturn. Outside adviser Stephen Moore recently
counseled the president to “veto every spending bill headed his way between now and the 2020 election.”
Trump might also pursue policies that would inflict even more damage . As he tweeted recently, he’s a
“Tariff Man”; he thinks import duties make America richer by shielding struggling industries from foreign
competition. (Economic research overwhelmingly says this is wrong.)
This beggar-thy-neighbor, protectionist approach has been tried at the start of a downturn
before — during the Great Depression .
What if, in a crisis, Trump somehow received — and then listened to — sound economic advice? Even then, he
would face a nearly impossible task , especially if the advice required enacting expensive and unpopular measures such as
bailouts, which rank-and-file voters on the left and the right have told pollsters they revile.
Speaking of leadership, there’s also the problem of our deteriorating international standing . In the past
financial crises, having good relationships with foreign central banks, finance ministers and
other leaders abroad proved crucial for coordinating fiscal and monetary responses .
But Trump has picked trade wars with adversaries and allies alike . Foreign leaders would
understandably be skeptical of U.S. entreaties for multilateral problem-solving .
If, in fact, we even bother with such overtures. Trump views the world as zero-sum . Anytime
another country is improving, it must be at our expense: If Germany runs a trade surplus, for instance, or if German
economic growth picks up, that must be because it’s stealing business from somewhere else. Given this outlook, he may be suspicious of

any multilateral response to a global downturn .

Finally, there’s this administration’s unusually shallow bench of economic talent. Consider the team that led us out of the 2007-08 financial panic.
Whatever their shortcomings — and not foreseeing the crisis was surely one of them — they collectively offered tremendous expertise, experience and
relationships.
By contrast, Trump chose as his treasury secretary Steven Mnuchin, a guy who had zero policymaking experience and whose top private-sector
achievements include investments in “Avatar” and “The Lego Batman Movie.”
To deal with a financial calamity, you need people in charge who not only actually know stuff but also inspire confidence that they know stuff. Trump
seems to have selected very senior personnel — when he’s selected them, anyway; about half of key Treasury posts remain vacant — based not on
expertise or credibility, but how much they praise him, especially in public.
Trump’s appointments at the Fed, mercifully, have been qualified. If all else fails, these politically independent technocrats, led by Chairman Jerome
Powell, will follow whatever theory and data suggest that economic policymakers should do, regardless of the news cycle or the proximity of the next
election.
Unfortunately, Trump has been busy trying to discredit this one remaining competent economic
institution, too.
And that is what we should be most worried about. Because if Trump destroys the central bank’s hard-won political independence — and convinces
markets that the Fed’s choices are based on political arm-twisting, rather than dispassionate analysis — he could hobble the Fed’s ability to effectively
intercede not only in the next recession but in every single one thereafter.
Uncertainty destroys American farms
Rushe 8/31/18 (Dominic, Pullitzer prize award winning Business Editor at the Guardian. The Guardian, " American
farmers fear being caught up in Trump's trade wars "
https://www.theguardian.com/environment/2018/aug/30/nafta-trump-deal-trade-not-aid-farmers-urge-action-amid-uncertainty)
For months, America’sfarmers have been “at the spear point” of an international trade dispute
started by the Trump administration, says Davie Stephens, a Kentucky farmer and vice-president of the American
Soybean Association. Now there are signs of a breakthrough as Canada and Mexico get closer to cutting a deal.
Even before he started running for office, Donald Trump railed against Nafta – the 25-year-old North American Free Trade
Agreement that guides trade relations between the US, Canada and Mexico – famously calling it “the worst trade deal ever”.
While farmers at Farm Progress have their issues with it, and many voted for Trump, what they really want
is certainty. Corn, and soy, doesn’t grow in a day . Sadly, for them, certainty is not a Trumpian
trait .
Still, Stephens is hopeful about the tentative deal with Mexico, and is impressed with Trump’s team. “The hope is that we are closer
to a resolution. They can call it Nafta or whatever, doesn’t matter to us,” he said.
Stephens’s sentiment was echoed across the 80 acres of Farm Progress, which ended on Thursday. Chatting besides the 600-plus
exhibits of farming equipment – the site is punctuated by colossal spiky harvesters and other Lovecraftian machines that look better
suited to space exploration than food production – farmers seem cautiously optimistic that Trump has their back.
It helps that the Department of Agriculture has
drawn up a $12bn aid package for farmers to help offset
losses from retaliatory tariffs on American exports. But “trade not aid” is what most farmers say
they want. And they want a deal now. Harvesting has already begun in parts of the country. Soon the seed sellers will
be calling and farmers will have to start planning how much – and what – they are going to grow
next year. Commodity prices have collapsed thanks to the tariffs and oversupply. Loans need to be renegotiated.
Farming is a slow business and planning is everything . Disquiet now could soon become
something closer to panic if a deal isn’t done.
“We need a deal sooner rather than later. A deal that will be good for everybody,” says Rich Schwemen, a local crop consultant.
Iowa farmers alone are facing a $2bn loss from tariffs so Monday’s announcement that the US had reached a tentative agreement to
resolve its differences with Mexico was a big deal. But on Friday Chrystia Freeland, Canada’s foreign minister, who had cut short a
trip to Europe this week to try and broker a deal with the US, said talks had hit an impasse and Trump continued to threaten to kill
Nafta and go it alone with Mexico.
That threat may be bluster. Canada is the largest market for US exports and Nafta has allowed the three countries to work in unison
in industries, particularly auto manufacture, that will suffer mightily if a three-way pact is not agreed. And even if Trump does get a
deal, it is not yet clear whether it will have to go through Congress or if Congress would approve it.
The tariffs have been terrible for business, says Dennis Slater, the president of the Association of Equipment
Manufacturers (AEM), and their consequences are spreading far beyond farming. Trump’s steel tariffs, which
started the disputes, added 10%-20% to the cost of manufacturing the huge machines baking in the Iowa sun. Given that those
machines can cost $500,000 and up, that’s a lot of money. “Even if we used American steel, prices are still up,” he says. “The
economy has been strong, there’s no supply, everyone upped their prices.”
About 1.3 million people are employed by AEM members, 350,000 in making agricultural
equipment. The losses farmers face will hit the entire manufacturing sector and the people who rely
on them. “If you lose your job tomorrow, you’re not buying another car,” says Slater. “There’s no dispute that Nafta needs updating
and we need a better deal with China,” he says. But the industry needs certainty otherwise “Americans are going to get laid off”.
Day one of Farm Progress ended early on an ominous note. Sudden thunderstorms turned the site into a slick, black mud bath and
organizers asked visitors to go home. Some of those who hadn’t turned up in farm-ready four-wheel drives (including your reporter)
had to have their cars pushed back on to the road by souped-up golf carts.
‘It’s the whole atmosphere’
On Wednesday the sun was out again and with it came Sonny Perdue, Trump’s avuncular secretary of agriculture and a dead ringer
for Ed Asner. In a softball question-and-answer session Perdue praised farmers (“They embody that great American spirit, risk taking,
entrepreneurship, hard work, the values of faith and family that are inspiring to me wherever I go”) while safely skirting around the
hard questions.
He acknowledged that farmers have told him they want trade not aid . “There’s not a farmer in America that
wouldn’t rather have a good crop at a fair price than a government check,” he said. But the markets are unfair to exporters. Trump
said “enough is enough. We are going to have free trade and fair trade,” said Perdue.
Manyfarmers at the show worry that Brazil and other South American suppliers could step in
and permanently erode their markets in China and elsewhere as the dispute continues . A third of
US soy ends up in China at present and those “unfair” trade practices – and China’s booming economy – have allowed soybean
exports to grow from $400m in 1997 to $14bn in 2017.

Disruption in the U.S. go global --- foments civil conflict.

Aled W. JONES AND Alexander PHILLIPS 16. *Director, Global Sustainability Institute, Anglia
Ruskin University; PhD, Cosmology, Cambridge. **Research Assistant, GSI. “Historic Food
Production Shocks: Quantifying the Extremes.” Sustainability 8: 427. Emory Libraries.
Global food supply is now a complex system. The interconnected nature of inter-country food
dependence has increased dramatically over the last few decades [8]. A globalised market can make the system itself
more resilient to localised shocks when food can be sourced from alternative places not experiencing the particular shock. However,
if there are systemic linked events in different regions or across a wide region, or an event is
of sufficient size, then this system can be perversely more fragile [9,10]. In particular the tele-connected
nature of extreme weather events is becoming an increasing focus of research [9] and while the short to medium term dynamics are
not well understood at present it is important to develop methods that can use the outputs of these models to assess potential
social impacts.
These systemic risks involving significant global losses of food production could have major
societal and economic impacts both through availability and price. Previous production
shocks have been linked to major global events such as civil unrest and, in turn, major upheaval
[11–13]. Understanding the historic causes and transmission of shock through to societal impact is key [14,15]. A recent study
examining the evolution of trade networks over the period 1992–2009 concluded:
The global food system does exhibit characteristics consistent with a fragile one that is
vulnerable to self-propagating disruptions . That is, in a setting where countries are increasingly
interconnected and more food is traded globally over the (last two decades), a significant majority of
countries are either dependent on imports for their staple food supply or would look to imports to meet any
supply shortfalls. [10]
A crop production shock results in a global food supply shock through trade and export
restrictions [16,17]. The responses of markets and governments to production shocks have been the subject of numerous
studies since the 2007/08 price shocks [18–27] and range from short term speculation to more fundamental changes in policies.
While food systems are both inherently local, particularly in the case of subsistence farming, and global a useful unit to explore
production shocks is the country level. An
extreme shock in food production will invariably involve a
response by a government at country level [16,25] in an attempt to manage local price increases and the impact of
the shock. Therefore, developing a detailed understanding of the impact of productions shocks would initially necessitate an analysis
at country level to allow a comparison across different studies. While it has been noted previously that the impact of food
production shocks on an individual country do not seem to be correlated with whether that
country is a net food importer or exporter [11] local infrastructure and processes will of course play an important part including transport, storage, policy
responses and subsidies [9]. A common method to identify production shocks is therefore a first step in assessing whether an extreme loss constitutes a risk for a particular country or not.
There is now a substantial effort underway in academic communities to better model the dynamics of the global food system. However, a pre-requisite to these endeavours is to understand past production shocks
and their impacts. A common baseline to identify and quantify these past shocks in needed if different studies are to be compared. This paper attempts to present a method to quantify the size of previous global
food production shocks to allow an agreed approach to their measurement and use. These production shocks can then be used as a basis for historic event analysis to aid with better model and parameter
development in this space. The paper does not attempt to reproduce the work of others on physical climate or weather modelling to explore the underlying causes of these production shocks nor does it attempt
to match individual loss events with past extreme events. Section 2 presents our method for defining production shocks. Section 3 presents the results and Section 4 discusses these results and the limitations of
our method. Finally we present some conclusions.
2. Production Shock Quantification Method
In this section, we firstly outline the data availability at country level and detail a method to create a consistent database of country level food production trends. We then propose a method of quantification to be
applied to this data to identify production shocks. Ideally our method leads to a list of countries who have experienced a food production shock and the year in which this production shock occurs. This then allows
further research into particular shocks to start from the same basis which is the intention of the work presented in this paper.
Comparison of analysis of the impacts of food production shocks requires a similar assessment of the size of a particular shock. In this paper we outline an approach to quantifying two scales of food production
shock—country level and global. While food production takes place at very local levels, understanding the impact of a physical food production shock on social systems usually involves modelling the impact on
food prices. Changes in food price usually come as a supply-demand response through export markets [28–31] and, therefore, country level analysis is the most appropriate to study, at least initially.
We constrain our choice of food to cereals as defined by the Food and Agriculture Organization (FAO). Cereals are directly impacted by extreme weather events, through droughts, extreme rainfall and
temperature, and quantifying this is a key first step in understanding future climate change impacts on food systems in general. We explore production shocks over annual cycles as a basis for the analysis.
As a baseline we look at global cereal production data over the past 17 years. We take data from the Food and Agriculture Organization Corporate Statistical Database (FAOSTAT) [32] for world cereal production
from 1995 to 2011 and use this data to plot a linear regression line. Figure 1 shows the data and regression line for world cereal production. As can be seen this shows an increase in global cereal production over
this period. If we assume that the trend line represents cereal production under normal conditions then deviations from this trend represent production gains due to ideal conditions or losses due to less
favourable conditions. The standard deviation of the differences between the real (as reported in FAOSTAT [32]) and trend data is 3.84%. The largest production shock observed over this period was in 2002 with a
7.15% shock. Does 2002 represent a production shock? At what level should we categorise a production shock? Given global level data only and using this as a basis for trends it is difficult to see how an objective
quantified measure based on statistical analysis is possible. Therefore, more detailed analysis on a country by country basis may offer a better method to define an objective statistical measure for production
shocks.
To identify food production shocks, yearly cereal production data for 187 countries from 1995 to 2011 was taken from FAOSTAT [32] totaling 3197 data points. To quantify the size of a shock we first need to
identify the underlying trend in production for a particular country.
From the data obtained, linear or polynomial regression lines for each of the countries’ time series were calculated depending on the trends in the data to minimize the coefficient of determination (R-squared).
The form of the regression lines can be seen from Equations (1) and (2): [equations omitted] where x is the year in the time series, β1 and β2 are coefficients of x, ye is the estimated production data and c is a
constant. The data obtained from these regression estimations smooths out any production shocks observed in the raw data. These trend lines are assumed to be the “normal” production for that country
assuming no shocks.
A percentage difference between the raw data and the regression data for each country was then calculated. This was done in two ways—as a percentage of that particular country’s production and as percentage
of global production, as seen in Equations (3) and (4): [equations omitted] where DC is the country level percentage difference, DT is the world level percentage difference, yd is the raw country production data
point, ye is the regression estimation for that country in that year and yt is the sum of all the raw data points for one year in the time series—the total production of cereal globally in that year.
This gives us two tables with percentage of real observed cereal production away from “normal” production trends. These percentage deviations can be both positive—meaning a country has produced more
cereal in a given year than its trend line, or negative—meaning a country has produced less cereal in a given year than its trend line. With no extreme production failures we would expect these production
anomalies to follow a normal distribution around the mean trend lines. These trend lines, on average, have a positive gradient over this period of time meaning that global cereal production in 2011 is higher than
it was in 1995. This is to be expected as food production has expanded over this period—both in terms of agricultural land and farming productivity. However, not all countries show an increase.
We then calculate the standard deviation of these percentage production anomalies. This standard deviation allow us to estimate the expected size of production changes year on year across countries. We
exclude countries that have zero production, and therefore zero percentage production anomalies, so these values do not skew the standard deviations.
To explore shock events we assume a normal distribution in the underlying trend as a first approximation. A shock event is then defined as any deviation away from the trend line that has a significantly low
probability of occurring. We take this point as falling outside of 99.7% of a normal distribution—that is 3 standard deviations. This roughly translates as an event with a recurrence of 1 in every 666 years if the
distribution is truly normal.
Shocks, or “3 sigma events”, were therefore identified as data points that fall below three standard deviations from the estimated regression data for both country and global level shocks.
At country level this represents a significant shock for that country and allows us to classify shocks per country. However, these shocks may be insignificant on a global level but of course represent a significant
local event. At global level the percentage anomalies and their distribution is much smaller than at country level. This is because it is possible for one country to experience a shock of more than 50% of its own
production in any year whereas a particular country’s production contribution to global production is of course much smaller. Therefore a country level 3 sigma event is likely to represent a very significant loss in
production for that country. The global food system experiences much smaller percentage production losses than individual countries due to the diversity of geographic growing areas.
Global shocks occur when a number of smaller countries, or a major producer, experience a shock at the same time. Given this, the anomalies each year for production shocks are likely to have a smaller
distribution at global level and major producers will have a higher impact on global supply than other countries. However, those global production shocks may not represent a country shock in those major
producers using our definition of a 3 sigma event. For example, the US and China are both major cereal producing countries and while a particular event in those countries may be under 3 sigma at country level it
could still represent a higher than 3 sigma event at global level. If the US lost under 50% of its production, while this may not be categorized as a country level shock, it would represent a global shock in
production.
By categorizing shocks both at country level and global level we ensure that any event which will have an impact on country level supply and demand from both the import and export perspective is still
categorized as a shock. If a country is categorized as having a shock this then allows the researcher to further explore those particular events to determine whether that shock represents a political or social risk for
those countries or elsewhere.
3. Results
Here, we present the results from applying the percentage anomaly calculations at both country and global levels. We then identify production shocks at country and global level and explore the difference
between these two approaches. Table 1 shows an example of the country percentage DC for a set of countries.
The standard deviations of the two sets of percentage differences obtained were then calculated. This equates to 19% relative to a country’s own production and 0.2% relative to world production. Using the 3-
sigma definition to identify a shock, at country level this corresponds to shocks in production of 58% while at global level this corresponds to an individual country contributing a shock of 0.6% to global production.
An extreme shock is therefore identified for any country that experiences a drop of 58% or more away from trend or any country that contributes more than 0.6% global production drop below trend by itself.
Figure 2 shows the distribution of percentage anomalies for country level production away from trend. As can be seen from the distribution at country level (Figure 2) there appears to be a small group of countries
that do experience a significant shock event (larger than 58% loss in production) giving the distribution fat tails—a more common phenomenon in probability distributions such as this given the uncertainty of
weather events [33]. Assuming a normal, or Gaussian distribution, will underestimate the frequency of these extreme “3 sigma events” which will be more common than in a normal distribution. However, the first
approximation of a normal distribution for 3-sigma events is still valid as this is only used to identify extreme events for further analysis. We do not attribute likelihoods to those events but use them to explore
further dynamics of the particular country production losses and how they impact on global food systems. To calculate probabilities of such events and the social consequences will require further analysis of the
underlying distribution as well as assigning probabilities to the social responses to those events. This is out of the scope of the current paper.
Figure 3 shows the distribution of percentage anomalies for country level production as a contribution to global production away from trend. Due to the very small standard deviation compared to the furthest
outliers in Figure 3, we use a logarithmic scale to represent the shape of the fat-tailed distribution. Although at global level (Figure 3) we see outliers where production deviating from a country trend line amounts
to nearly ´2% off global production, in fact the largest shock here is ´3.45%, but these outliers are not displayed due to the logarithmic scale. Therefore, we see that a few events have contributed to significant
shocks.
We then classify the particular countries that fall outside the 3-sigma event and the year in which the shock occurs. This classification allows us to produce a list of countries that we highlight as having experienced
a production shock themselves or those that contributed to a shock in global production. The years that particular countries experienced production shocks given the two criteria are listed in Tables 2 and 3.
Table 2 shows the countries experiencing significant shocks relative to their own production are usually not major producers. It instead highlights countries that experience the most variability in their annual food
production are more likely to be smaller producers with less infrastructure and processes to manage major weather or political events that impact food production. These countries are less secure in their food
availability and are more likely to need to increase their dependency on imports during these times of shock. Under usual conditions this may not represent a significant challenge however, if finance was a
problem or their shocks coincided with a global shocks or import restrictions then this could represent a major potential impact on those countries. Furthermore, many of the nations identified are African and
Middle Eastern states, arguably some of the most unstable parts of the world. There are production shocks in these nations in 1995, 1997, 1998, 1999, 2000, 2002, 2005, 2007 and 2008. If a major producer
experienced a food production shock of 58% it would have catastrophic impacts on the global food supply system.

These production shocks ripple

Table 3 shows the countries that experience the largest shocks relative to global production and are, as expected, the biggest producers.

throughout the world’s food system and affect the producing country as well as all other
countries that rely on their exports. Global shocks are experienced in every year except for 1996, 1997 and 2008.
Global production shocks are more often than not the result of a single country experiencing a
production loss. However, if more than one major producer experiences a production shock then the global loss can be very
high. For example, in 2002 there was a loss of 7.98% of all global cereals in that single year. Depending on what else is happening in
the food system, in particular associated with stock levels, these
global losses could lead to significant social
impacts. At country level at least one country experiences a major shock (loss of more than 58% of its production) every other
year.
Using purely global data (Figure 1) we also saw a production shock of 7.15% in 2002, which was less than a two sigma event using
global only trend lines. However, using
this new method we have shown that Australia, Canada, China, India and
United States all having 3 sigma events in 2002 amounting to a 7.98% loss (the overall loss is slightly
higher as the regression lines are done on a country by country basis and therefore the overall trend is
slightly different to a global trend). In conducting this analysis we emphasise that it is the level of detail that is important and not the
overall trend as displayed by the global data. Global 3 sigma events identified using country level data help identify where shocks
took place, explaining possible re-orientations of the trading system of food.
4. Discussion
Rises in global food prices can have a significant impact on societies and have in the past led
to social unrest [11,13]. However, the causes of food price rises are myriad [27] and the subject of a lot of study. One
underlying cause is the physical availability of food. In particular shocks in cereal production are viewed as
one of the causal factors in price shocks [16] although a cereal production shock does not always lead to a price shock and a price shock has not always been
preceded by a production shock [9]. Never-the-less developing a policy response to food security and global food resilience requires a deep understanding of the food system.
Surprisingly there is no one agreed method for quantifying or categorizing when a country has experienced a food production shock. This paper has presented a linked method to categorize a country level
production shock and a shock at country level that leads to a global production shock. We have identified several production shocks over the period 1995–2011 and classed these as country or global shocks while
listing the year and country in which the shock originated.
Research which has explored the food system and price shocks can be better grounded in underlying production shocks by using this method. We argue that this would allow for an easier comparison between
different arguments for causality of food price shocks. In particular in building quantified models having a similar basis for including cereal production shocks would create a better method for validation and
calibration of these models. The simple formulation of identifying 3 sigma shock events presented in this paper should be readily reproducible by other research groups.
Of course several limitations exist with this method when using it for detailed policy development not least the quality of the data contained within the FAOSTAT database. Another key limitation is that food price
shocks are rarely directly linked into overall cereal production but rather a complex interaction with imports, exports and stock levels. Also, as previously highlighted, this method does not identify whether a
particular country is at risk of political or social impacts as a result of the production shock. The risk factors are myriad and include political responses, transport, storage infrastructure, substitutability of grains
with other sources of food, exchange rates and food subsidies, However, we believe an initial categorization of food production shocks using this simple and common method will allow better cross-comparison
between studies while given a common basis for further study into these more detailed responses to production shocks. This method should allow an identification of key countries to examine in further detail as
potential sources of either shocks to import demand or export capability. Identifying a particular country of course is only the first step in understanding the dynamics of the global food system.
5. Conclusions
In this paper we present a method to categorize food production shocks at country level. We
use data from FAOSTAT to
list a set of extreme production shocks over the period 1995–2011 and the countries and years
in which these shocks occur. We show that global cereal production shocks occur as a result of
shocks in major cereal producers including US A, China, Russia, Ukraine, India, Argentina, Canada and Australia.
The largest global shock using our method was a 7.98% shock in 2002. Production shocks when an individual country experienced
more than 58% loss in annual cereal production has occurred 21 times during that period in countries that are predominantly
classed as developing countries.
 1AC – WTO
Tariffs are undermining the core of the WTO – everything else can be overcome,
but Trump won’t dial down his trade wars
Panagariya 10/19/18 — a professor of economics and the Jagdish Bhagwati professor of
Indian political economy at Columbia University. (Arvind, Foreign policy “The Trade War Has
Claimed Its First Victim” https://foreignpolicy.com/2018/10/19/the-trade-war-has-claimed-its-
first-victim/)
The World Trade Organization (WTO) might be the first victim of the trade war between China, the
United States, and the European Union. Today, each is in flagrant violation of its rules, and the
institution’s credibility as the protector of a rules-based trading system is in serious doubt.
U.S. President Donald Trump initiated the trade war in March when he announced the imposition of
a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports from most
countries. In May, he expanded the duty to include imports from Canada, Mexico, and the EU. In a move that surprised few,
China reacted by imposing tariffs of its own on an equivalent volume of steel and aluminum imports from the United States. Canada,
Mexico, and the EU eventually joined China in retaliating, too.
As legal cover for its decision, the
United States invoked a rarely used WTO clause that allows
members to suspend some trade concessions on national security grounds. Trump’s tariffs
undoubtedly violated the spirit of the clause —it is hard to see how steel and aluminum
imports that mostly come from friendly nations endanger U.S. national security . But WTO scholars
agree that Trump did not violate the letter of the law, which means that he will probably get a
pass.
Even so, several WTO members, including Canada, China, Mexico, Norway, Russia, Turkey, and the EU, have requested that the
organization establish a dispute panel to review the United States’ new trade barriers. Washington’s defense has been
quite clear: According to the national security clause, the WTO cannot “prevent any
contracting party from taking any action which it considers necessary for the protection of its
essential security interests,” and only the United States can decide what is required to protect
those interests. As such, not only are its actions valid under WTO rules, but they are also, in fact,
beyond review.
Things aren’t as complicated when it comes to Canada, China, Mexico, and the EU. WTO rules require that whenever one member
country believes that another has violated its trading rights, it must bring the matter to the WTO Dispute Settlement Body. Only this
body can authorize retaliation. Since these countries acted wholly unilaterally in retaliating to Trump’s gambit, there is no question
that they broke the rules. Unsurprisingly, the United States has already formally asked the WTO for a review.
Of course, the
United States hasn’t been as careful to keep on the right side of the law in every case.
Following the steel and aluminum tariffs, by the end of September, the United States had
imposed subsequent tariffs on imports from China worth $250 billion . (China, naturally, responded in
kind.) This time, the president used U.S. law—Section 301 of Trade Act of 1974—to justify the decision. As a result of a 2000 case
brought to the WTO by the EU, though, the WTO had already deemed trade restrictions imposed under this law invalid. As such ,
the United States is not even close to being in the legal clear this time, but it isn’t obvious that it will
matter.
In short, there’s clear writing on the wall for the WTO and the multilateral trading system. I t is
telling, after all, that in instigating the trade war, the United States simply talked its way around longstanding trade rules and that, in
responding, its trade partners didn’t care if they broke them. It is similarly worth noting that the United States was happy to break
the rules itself the second time around. If the WTO does decide to review the United States, then Washington could simply walk
away from the organization. And if it doesn’t, any country could justify future trade restrictions as being in its national interest.
Meanwhile, if the WTO rules that Canada, China, Mexico, and the EU violated its rules while giving a pass to the United States, these
countries may choose to leave the organization themselves.
Even if reviews by the Dispute Settlement Body don’t become a sticking point , the issue of the
larger and more acrimonious dispute between the United States and China remains . By all
 Trump is in no mood to back off his trade war. Indeed, his administration’s recent
indications,
success in renegotiating NAFTA is likely to embolden him. At the same time , China has
become progressively more aggressive and belligerent in promoting its own narrow self-
interest.

Trump’s tariffs spark global tit-for-tat retaliation – tariff removal is the most
symbolically important commitment to multilateral trade
Kirchner 18 (Stephen, 9/4/18 , PHD in Economics from the University of New South Wales.
Program Director, Trade and Investment, United States Studies Centre, University of Sydney. A
senior fellow at the Fraser Institute in Canada. “The global trading system will NOT survive
President Trump’s tariffs” https://www.ussc.edu.au/analysis/the-debate-papers-will-the-global-
trading-system-survive-president-trumps-tariffs)
The global trading system is unlikely to survive the Trump administration’s increasing use of
tariffs as an instrument of international economic policy. This is not just because the tariffs are harmful in
themselves. It is because the tariffs represent a rejection of the idea that international trade is
mutually beneficial . If the world’s leading economy conducts trade policy on the basis of the
mercantilist notion that trade is a zero-sum game, it will become increasingly difficult for the
existing global trading system to function, much less for new free trade agreements to be struck.
The beginning of the end
It is worth reviewing the damage the Trump administration has already done to the global
trading system nearly half-way through its first term. On day one, President Trump withdrew from the Trans-
Pacific Partnership (TPP), dramatically reducing the scope of this free trade agreement from 40 per cent of world output to just 13.5
per cent.9 While the remaining TPP partners, including Australia, were able to salvage an agreement, the TPP-11 falls short of the
aspirations originally held for it.
The TPP was potentially a vehicle through which the United States could lead regional efforts to foster a free and open Indo-Pacific,
giving increased economic content to its security alliances within the region. It was also a vehicle through which member economies
could have directly challenged China’s increasingly discriminatory, state-led economic development model by setting higher
standards for trade and investment. Having withdrawn from the agreement, the political, legal and other obstacles to future US
accession will be difficult to surmount.
The high-profile demise of the original TTP overshadowed the demise of the less well-publicised but equally important Transatlantic
Trade and Investment Partnership (TTIP) negotiations between the United States and the European Union, notwithstanding recent
efforts to re-start these trade talks.
How we got here
Starting in 2018, the administration has introduced tariffs on imports of solar panels, washing
machines, steel and aluminium, as well as a broad range of imports from China . It has further
threatened higher tariffs on automotive imports, as well as higher tariff rates encompassing almost the total
value of Chinese imports to the United States.10
While the individual measures are not in themselves unprecedented, the rationale and policy instruments applied
are significant departures from the spirit and letter of both US and international trade law .
Invoking national security as a justification for imposing tariffs on steel and aluminium imports is an
abuse of both domestic and international trade law. If the World Trade Organization (WTO) is forced
to rule on the legality of the national security justification in these cases, it could set a
dangerous precedent . In the future, other countries could invoke this exception in bad faith or
the United States could ignore the WTO’s ruling or even withdraw from the WTO .11
Other countries have retaliated against the US tariffs with their own measures, compounding
the damage to America and the world economy. China’s announced retaliation alone covers
around 85 per cent of its imports from the United States 12 and has largely unwound the significant
reductions in the average level of tariffs on US imports since China became a member of the WTO in 2001. The retaliation
seen to date discredits the idea that higher tariffs will lead other countries to enter
negotiations to lower their trade barriers.
The Trump administration’s deal(s)
The Trump administration has engaged in trade talks with China and Europe while also renegotiating the North American Free Trade
Agreement (NAFTA) with Canada and Mexico. Yet all of these talks have so far ended in failure, largely because the
administration approaches them with a mercantilist, zero-sum mindset that is fixated on
economically-irrelevant measures such as bilateral trade balances , making agreement difficult
if not impossible to achieve.

And, only multilateral pressure through an invigorated WTO solves Chinese IP

theft – bilateral efforts fall prey to the collective-action problem
Brown 12/11 – Chad P. Bown, Reginald Jones Senior Fellow at the Peterson Institute for
International Economics, previously served as senior economist for international trade and
investment in the White House on the Council of Economic Advisers and most recently as a lead
economist at the World Bank (“Why the US Needs Allies in a Trade War Against China”,
published also in the Harvard Business Review, December 11, 2018,
https://piie.com/commentary/op-eds/why-us-needs-allies-trade-war-against-china
But a change in approach is conceivable. In what would be a stunning policy plot twist of the Trump

presidency, it is possible that American negotiators could join forces with their previously
rebuffed counterparts in Europe and Japan to form a collective front , all pushing for Chinese
reform. Although the White House has yet to signal anything like this, it's worthwhile to consider how such a strategy
might play out.
This coalition of market-oriented economies would make three fundamental demands . First,
Beijing would have to commit to a crackdown on state-sponsored cyber-espionage and theft of
commercial trade secrets. Second, the Chinese government would also need to move away from its
legacy system of coercing western companies to form joint ventures with domestic firms, as this has created
tension with companies being compelled to transfer their technology on noncommercial terms . Finally, China would have to cut
its industrial subsidies and the excess credit it has used to prop up state-owned enterprises .
In fact, European and Japanese trade ministers have been working behind the scenes —with the

support of President Trump's US Trade Representative, Robert Lighthizer—to develop new rules to address
each of these joint concerns with China. The three publicly announced the initiative almost exactly
one year ago on the sidelines of a W orld T rade O rganization conference, coincidentally also in Buenos Aires. The trilateral group
revealed further progress after meeting in March in Brussels, in May in Paris, and in September in New York.
The December 1 announcement created a moment for this trilateral group to put their plan
into action. Trump could take it, reunite with European Commission president Jean-Claude Juncker and Japanese Prime Minister
Shinzo Abe, and confront China en masse . And proceeding as a bloc is more likely to work, mainly

because it capitalizes on the right economic incentives .

To see why the three must work together , remember that American negotiators have already

tried to press Beijing on their own . Though it received strikingly little public attention at the time, the Obama
administration undertook sustained attempts to negotiate a bilateral investment treaty with
China. This one-on-one effort sought an agreement to protect foreign companies from
suffering from the same problems Trump purportedly now wants to fix. Such a treaty might have addressed the
coercion and theft of American intellectual property, as well as some of the concerns over China's massive subsidies, through new rules and better
enforcement.
However attractive this all sounds, the US-China bilateral treaty approach was probably doomed for
failure . It is a deceptively simple example of what the Harvard-trained economist Mancur Olson popularized as the collective-action
problem. The "harm" caused by China's unfair trade practices is spread out across all of its
trading partners, each of whom has only a minor incentive to act . Therefore, on its own, America simply
does not possess enough incentive to ask China to do the structural change required to make
a difference.
The problem is something of a paradox. America would not reap all of the benefits if China took on all of the reforms being demanded. Beijing can't
improve intellectual property protection in a targeted fashion that would only advantage American companies, scientists, and workers—its efforts
would also end up helping German, Japanese, and British entrepreneurs. And a Chinese agreement to cut back on subsidies improves conditions facing
steel and aluminum companies also operating in Europe and Japan, not just in the American Midwest. The sheer inability to prevent others from
benefiting from Chinese reform means that an America that goes alone will tend to underinvest in efforts to push for change.
Understanding the limits to negotiating alone is critical . Beijing recognizes that the U.S.
doesn't have the stomach to put up a big enough fight on its own to fully play out a war of
attrition . Why should American automobile workers in South Carolina have their exports shut
out of the Chinese market due to Beijing's retaliation to Trump's tariffs when the main
beneficiaries are car plants in Europe or Japan? American soybean farmers have noticed that this fall's tariff on their crop
means China will switch to sourcing from competitors in countries like Brazil.
Even if the Trump administration feels emboldened to inflict the pain of tariffs on American
consumers, the next president may not be. So, the Chinese can simply wait . The implication of
Olson's free rider problem is that, just like Obama had insufficient leverage to get China to do
structural change, Americans are likely unwilling to suffer the pain of President Trump's unilateral
tariff war for long enough to get the job done.
Nor should they have to. China's biggest fear is one of collective action by the Europeans, Japanese,

and Americans . Beijing will likely soon present Trump with a deal to simply agree to buy more American agricultural or industrial products,
but not make much movement of reform. This offer will be tempting. Selling off the growing stockpile of American soybeans or the cars in the
overflowing parking lots at the docks will appeal to an American president who has been interested thus far in deals in which only the Americans
benefit.
But this would be short-sighted. China importing more agriculture or cars from America without reform may simply come at the expense of someone
else. And that someone else may be exports from an ally like Europe or Japan. So not only would falling for the seductive but poisonous offer not fix the
long-term problem with China, it would further weaken an already fragile trilateral partnership. It would also be China's way of buying itself out of the
needed systemic reform from which the Europeans and Japanese benefit, too.
All of this does assume the Trump administration is serious about fixing the trade relationship with China. The next 90 days could also reveal whether
its true intention is instead to limit China's rise based on some perceived national security or other non-economic concern.
Now, the first two years of the Trump presidency do make the likelihood of collective action
seem remote. And yet, the opportunity to capitalize on the moment is now there for his
taking . The failure to do so may be a waste of Trump's best, and potentially only remaining, opportunity on this issue.

The US-China tech race has existential implications – growing Chinese

innovation hijacks deterrence, empowers revisionism, and causes nuclear war.
Economist 18—The Economist, The Leaders (“The Next War: The growing danger of great-
power conflict,” January 25th, https://www.economist.com/leaders/2018/01/25/the-growing-
danger-of-great-power-conflict)
IN THE past 25 years war has claimed too many lives. Yet even as civil and religious strife have raged in Syria, central Africa,
a devastating clash between the world’s great powers has remained almost
Afghanistan and Iraq,
unimaginable.
No longer . Last week the Pentagon issued a new national defence strategy that put China and Russia above
jihadism as the main threat to America. This week the chief of Britain’s general staff warned of a Russian attack. Even
now America and North Korea are perilously close to a conflict that risks dragging in China or escalating into nuclear catastrophe.
long-term shifts in geopolitics and the
As our special report this week on the future of war argues, powerful,
proliferation of new technologies are eroding the extraordinary military dominance that
America and its allies have enjoyed . Conflict on a scale and intensity not seen since the second
world war is once again plausible. The world is not prepared .
The pity of war
The pressing danger is of war on the Korean peninsula, perhaps this year. Donald Trump has vowed to prevent Kim Jong Un, North
Korea’s leader, from being able to strike America with nuclear-armed ballistic missiles, a capability that recent tests suggest he may
have within months, if not already. Among many contingency plans, the Pentagon is considering a disabling pre-emptive strike
against the North’s nuclear sites. Despite low confidence in the success of such a strike, it must be prepared to carry out the
president’s order should he give it.
Even a limited attack could trigger all-out war . Analysts reckon that North Korean artillery can
bombard Seoul, the South Korean capital, with 10,000 rounds a minute. Drones, midget submarines and
tunnelling commandos could deploy biological, chemical and even nuclear weapons . Tens of
thousands of people would perish; many more if nukes were used.
This newspaper has argued that the prospect of such horror means that, if diplomacy fails, North Korea should be contained and
deterred instead. Although we stand by our argument, war is a real possibility (see article). Mr Trump and his advisers may
conclude that a nuclear North would be so reckless, and so likely to cause nuclear proliferation, that it is better to risk war on the
Korean peninsula today than a nuclear strike on an American city tomorrow.
China stays out of a second Korean war, both it and Russia are entering into a renewal of great-
Even if
power competition with the West . Their ambitions will be even harder to deal with than
North Korea’s. Three decades of unprecedented economic growth have provided China with
the wealth to transform its armed forces , and given its leaders the sense that their moment has come. Russia,
paradoxically, needs to assert itself now because it is in long-term decline. Its leaders have spent heavily to restore Russia’s hard
power, and they are willing to take risks to prove they deserve respect and a seat at the table.
Both countries have benefited from the international order that America did most to establish and guarantee. But they see its pillars
—universal human rights, democracy and the rule of law—as an imposition that excuses foreign meddling and undermines their own
They are now revisionist states that want to challenge the status quo and look at their
legitimacy.
regions as spheres of influence to be dominated . For China, that means East Asia; for Russia, eastern Europe and
Central Asia.
they are using
Neither China nor Russia wants a direct military confrontation with America that they would surely lose. But
their growing hard power in other ways, in particular by exploiting a “grey zone” where aggression and
coercion work just below the level that would risk military confrontation with the West. In Ukraine Russia has blended force,
misinformation, infiltration, cyberwar and economic blackmail in ways that democratic societies cannot copy and find hard to rebuff.
China is more cautious, but it has claimed, occupied and garrisoned reefs and shoals in disputed
waters.
China and Russia have harnessed military technologies invented by America , such as long-range
precision-strike and electromagnetic-spectrum warfare , to raise the cost of intervention
against them dramatically. Both have used asymmetric-warfare strategies to create “anti-access/area denial” networks.
China aims to push American naval forces far out into the Pacific where they can no longer
safely project power into the East and South China Seas . Russia wants the world to know that, from the Arctic
to the Black Sea, it can call on greater firepower than its foes—and that it will not hesitate to do so.
If America allows China and Russia to establish regional hegemonies , either consciously or because its
politics are too dysfunctional to muster a response, it will have given them a green light to pursue their
interests by brute force. When that was last tried, the result was the first world war .
Nuclear weapons , largely a source of stability since 1945, may add to the danger . Their c ommand- a nd- c ontrol
systems are becoming vulnerable to hacking by new cyber-weapons or “blinding” of the satellites they
depend on. A country under such an attack could find itself under pressure to choose between
losing control of its nuclear weapons or using them .
Open trade prevents conflict and decreases arms racing
Garfinkel & Syropoulos 18 (Michelle R. Garfinkel University of California, Irvine Constantinos Syropoulos Drexel
University "On Trade and the Stability of (Armed) Peace" www.pages.drexel.edu/~cas86/Garfinkel-Syropoulos-2.pdf)
- War is costly because it decreases trade
- Other studies neglect endogenous effects of arming on world prices – even when conflicts are settled peacefully, arming
is itself costly. Countries can optimize distribution of resources in multilateral systems to allow for trade + avoid arming
Abstract: We consider a simple environment in which two
sovereign states with overlapping ownership
claims on an insecure resource/asset can choose to resolve their dispute either violently
through war or peacefully through settlement under the threat of war. Both approaches to conflict
resolution depend on the states’ military capacities, but their outcomes are very different. War precludes trade between the two
states and can be destructive; however, once a winner is declared, arming is unnecessary in future periods. By contrast, a peaceful
resolution avoids destruction and supports mutually advantageous trade through negotiation; yet, settlements must be renegotiated
and the states must continue to arm in future periods to resolve their ongoing dispute. Paying special attention to the importance of
trade in this context, we explore the conditions under which war and peace arise as perfectly coalition-proof equilibria over time. In
Our
addition to examining the prospects of “armed” peace, we study the effects of trade on arming incentives and welfare.
analysis reveals that, depending on time preferences, more liberal (open) trade regimes can
have a pacifying effect on international relations. Furthermore, uneven ownership could be more conducive to
the stability of peace.
1 Introduction
To what extent does trade between countries induce more peaceful relations between them? There is, of course, the
time-
honored hypothesis advanced and extensively tested by scholars of international relations
that, because war significantly reduces or completely destroys opportunities for trade , the cost of
war rises with increasing integration of national economies (e.g., Polachek, 1980). The so-called “liberal”
view, then, suggests that, with globalization and/or trade liberalization, we should expect extended
peace. 1
Although the liberal hypothesis builds on a very basic principle in economics—namely, that trade is mutually beneficial—research by
economists on this hypothesis is relatively scant. Aside from Polachek’s seminal paper, Skaperdas and Syropoulos (2001) augment a
Heckscher-Ohlin model of trade with a conflict over resources between two identical and small countries. In that setting,
depending on the world price, trade can amplify arming incentives and thus the associated security costs
to such an extent so as to swamp any gains from trade. The analysis, however, considers just the case of two
small countries that trade with the rest of the world , and thus does not really get at the
possible influence of interdependence between them .2 Garfinkel and Syropoulos (2017) explore
the importance of economic interdependence between two large countries that compete for
claims to a resource and subsequently trade with each other . In this setting, where the
endogeneity of arming and the accompanying resource costs impact world prices, trade for
the most part induces lower arming and greater payoffs. Yet, neither of these analyses considers the cost of
conflict to disrupt trade. Martin et al. (2008) consider this disruptive effect, but they do not model the
endogeneity of arming and thus the resource costs of conflict (however resolved) that can
influence the terms of trade and thus the gains from trade.3
In this paper, we combine these approaches, in an effort to gain further insight into when and
how greater trade openness matters for international relations . Our analysis builds on a model of trade
where, along the lines of Armington (1969), each country has a unique and inalienable technology for producing a tradable
intermediate input to produce a final good for consumption. Diversity of inputs enhances each country’s ability to produce that final
good, and herein lie the possible gains from trade. We augment that model with conflict over claims of ownership to a resource used
to produce the intermediate goods. A key feature of the analysis is the distinction it makes between the mobilization of resources to
arm and the deployment of those arms in open conflict, along the lines of Garfinkel and Skaperdas (2000) and McBride and
Skaperdas (2014).4
The basic setup of the model is as follows. Once the contending countries have made their arming decisions, they choose how to
resolve their dispute over the sum of their remaining resources, what we call the “residual” resource. One option involves open
conflict or war, modeled as a winner-take-all contest, with some fraction of the residual resource being destroyed as a result. At the
same time, open conflict destroys the possibility of trade between the two countries.5 The other option involves armed peace.
Specifically, the two countries try to negotiate a peaceful division of the residual resource, leaving open the possibility of subsequent
 Whatever arms they
trade. If they come to a peaceful agreement, arms are not deployed and thus there is no destruction.6
choose, the contending countries always have a short-run incentive to negotiate a peaceful
settlement , as that option allows them to divide the contested resource without either having
to deploy arms and suffer war’s destructive effects or to foreclose on trade.
But, when the countries take a longer-run perspective, settlement need not emerge as an equilibrium. The reason is that settlement
in the current period concerns the division of resources in that period only. Absent the possibility for the two countries to commit to
a division of the contested resource in the future, settlement requires some diversion of resources away from the production of
goods for consumption both in the current period and in the future. As assumed in Garfinkel and Skaperdas (2000) and McBride and
Skaperdas (2014), open conflict in the current period, by contrast, gives the victor a strategic advantage in future conflict, so that
fighting today reduces future arming costs relative to those under settlement.7
In fact, despite its effect to rule out trade, open conflict is always a subgame perfect, Nash equilibrium in a multi-period setting.
Peaceful settlement, too, can be a subgame, perfect equilibrium outcome. But, depending on the possible gains from trade, the
shadow of the future, and the degree of conflict’s destructiveness, open conflict could Pareto dominate settlement. In such cases,
open conflict is a “strong perfect equilibrium” or, equivalently (in the two-country setting we consider), a “perfectly coalition-proof”
equilibrium (Bernheim et al., 1987).8
A central component of our analysis involves the characterization of the set of conditions under which peaceful settlement is
immune to both coalitional and unilateral deviations and, thus, emerges as the stable equilibrium outcome. Consistent with the
findings of other analyses that distinguish between mobilization of resources to produce guns and the decision to use those guns in
open conflict, we find that peaceful settlement is more likely to be a stable equilibrium outcome, when the shadow of the future is
weak and the destructive effects of war are large.
The main contribution of this paper, however, is to characterize the importance of trade
openness in each country’s optimizing choices as they depend on the international
distribution of factor ownership. The key to this link is summarized in the per-period gains from trade, which as in
standard trade models depend negatively on the elasticity of substitution between the two differentiated inputs in the production of
final consumption goods, the level of trade costs, and the initial distribution of resources.
Our analysis shows that there exists a threshold level of the destructiveness of war such that for levels above that neither trade nor
trade openness matters . If large
the initial distribution of asset ownership matter for the stability of peace. Otherwise,
enough, the gains from trade alone render armed peace stable, for all possible initial resource
distributions . More generally, however, the initial distribution plays an important role —along with the
destructiveness of war, the strength of the shadow of the future, as well as the other factors that influence the gains from trade.
Interestingly, in this case, while armed peace dominates open conflict for sufficiently even and for sufficiently uneven distributions of
resources, unilateral deviations are profitable for at least one and possibly both countries when the distribution is sufficiently even.
Accordingly, peace could be stable only for sufficiently uneven resource distributions.

Only multilateral and free trade stops war – interdependence and opp-costs
Lee & Rider 16 (Hoon Lee a PhD in Political Science from U of Iowa and Assistant Professor of Political Science at Texas Tech
U; Toby J. Rider a PhD in Political Science from U of Illinois and Associate Professor of Political Science at Texas Tech U “Evaluating
the Effects of Trade on Militarized Behavior in the Context of Territorial Threat,” Foreign Policy Analysis, 22 April 2016,
https://fpa.oxfordjournals.org/content/early/2016/04/21/fpa.orw009.full)
As previously discussed, liberal peace scholars have long argued that trading states are less likely to fight each
other . Among several mechanisms suggested to drive this process, we focus on two possible causal mechanisms in order to
explain that increasing trade reduces territorial conflict.6
First, trade
may increase states’ opportunity costs of violence. Under this argument, exemplified by Polachek
(1980), conflict
is avoided by trading states because both states enjoy the benefits of economic
exchange, an increase in welfare, and conflict threatens to disrupt that relationship .7 Knowing this,
states must weigh the costs and benefits of the trading relationship versus potential gains from territorial conflict. We note that a
number of studies view territory as one of the top sources of national power and capabilities. Territorial reallocation is an important
way to preserve the balance of power (Morgenthau 1985) and the conquest of territory is considered a critical objective of states in
realizing other interests, for example, economic prosperity and security (Gilpin 1981; Liberman 1993). Territorial issues, thus, are the
key to understanding the steps by which states engage in war (Vasquez 1993; Senese and Vasquez 2008).
Nevertheless, the long-term payoffs that states gain from a peaceful exchange of goods and services do not play a small part even in
the domain of territorial disputes. Rosecrance (1986) argues that international trade replaces territorial conquest as a means of
exchange as well as a source of national power. What was previously gained through war can now be gained through trade,
removing economic-based incentives for territorial conflict. Stopford and Strange (1991) and Strange (1996) also argue that
competition for global market has replaced competition for territory or natural resources. Seizing
the wealth of another
nation by conquest is no longer an efficient or sustainable instrument for a state to increase
its own wealth in a transformed global economy (Angell 1933). The recent study by Lee and
Mitchell (2012) in fact provides empirical support for the idea that there are declining benefits of
territorial conquest in an economically globalized world . They show that increasing world foreign
direct investment (FDI) levels decrease the likelihood that states will make new diplomatic claims
to land or maritime territories. Economic interdependence through FDI flows also reduces the
probability of severe militarized disputes over territory claims (Lee and Mitchell 2012). On the other hand,
settled borders not only make economic integration more likely (Anderton and Carter 2001) but also produce joint
economic gains for trading states by reducing uncertainty, transaction costs, and negative
externalities (Simmons 2006). Given the long-term payoffs of trade, and consequently the high
opportunity costs of foregone trade, states thus are expected to seek nonviolent resolution to
territorial issues . In particular, increasing trade encourages specialization in the production of
goods and services, rendering private traders and consumers more dependent on foreign
markets. As a result, these actors have an incentive to (put pressure on governments to) avoid
militarized conflict with trading partners (Stein 1993).
We find many examples in which private businesses act in precisely this manner. In 2009, Japan Business Club and the Russian Union
of Industrialists and Entrepreneurs (RSPP) put pressure on both Japanese and Russian governments to settle a border disagreement
peacefully (The Moscow News 5/8/2009). Similar cases are found between Croatia and Slovenia and between Thailand and
Cambodia, respectively, where business
groups put pressure on their governments to resolve their
border disagreement through peaceful mediation (BBC News 3/3/2009; The Nation Thailand 11/13/2009).
Meanwhile, examples where states successfully resolved border issues, like the recent settlement between Mali and Burkina Faso
after a decade (1974–1985) of conflict, enjoy increased trade (The Monitor 6/7/2011). This is again consistent with Simmons’ (2006)
finding that territorial conflict reduces contiguous countries’ bilateral trade, whereas trade increases with settled borders.
 1AC – Plan
Plan: The United States federal government should increase restrictions on the
United States’ presidents’ congressionally delegated authority to impose
restrictions on Chinese imports without approval from a fully staffed World
Trade Organization Dispute Settlement Body
 1AC – Solvency
Congress should restrict the President’s authority to unilaterally impose tariffs
Griswold 18 (3/15/18. Daniel Griswold is a senior research fellow and co-director of the
Program on the American Economy and Globalization at the Mercatus Center at George Mason
University. “Can Congress reclaim its powers over trade and tariffs?”
https://www.washingtonexaminer.com/opinion/can-congress-reclaim-its-powers-over-trade-
and-tariffs)
President Trump’s recent announcement of sweeping tariffs on imported steel and aluminum is bad economic and
foreign policy, but even more seriously it tramples over the intentions of Congress and the separation of
powers in the Constitution. Our trade policy framework was simply not designed to work with a president who has gone
rogue on trade against the national interest.
Article 1, Section 8 of the Constitution delegates to Congress sole authority “to regulate
commerce with foreign nations.” Yet in this latest trade drama, Congress has been relegated to a
passive role

as the president abuses the intent of U.S. trade law to impose steep tariffs on tens of billions of
dollars of imports. Congress must reclaim its rightful authority over trade policy before more
damage can be done — to our economy, our standing in the world, and our constitutional system of government.
Congress has delegated authority to the executive branch over the decades to impose certain
duties under certain conditions. The steel and aluminum tariffs were imposed under Section 232 of the
Trade Expansion Act of 1962, a Cold-War-era provision that was intended to allow the president to
curb imports that “threaten to impair the national security.”
In this case, “ national security” was only a smokescreen for the Trump administration to protect the politically
connected steel industry from normal foreign competition. The move was opposed by the U.S. defense establishment, which only
consumes about 3 percent of annual U.S. steel production. Most of the imports affected by the tariffs are produced by our close
allies, including Japan, South Korea, and the NATO countries in Europe.
Section 232 and other administrative trade laws were predicated on a responsible chief
executive who would act in a way that represents the national interest . Practically speaking, presidents
have almost always been more pro-trade than Congress, since the president answers to a national constituency while congressmen
and senators represent more parochial interests. But now, perhaps for the first time in American history, Congress is confronted
with a president determined to impose his own protectionist agenda independent of the legislative branch.
In the face of this constitutional challenge, Congressional leaders should move quickly to negate the steel and aluminum tariffs
announced by President Trump. Such action would protect the economic interests of the United States while also guarding the clear
constitutional authority of Congress to determine U.S. trade policy.
Congress should require congressional approval for any future tariffs or other
Just as importantly,
trade restrictions the president may seek to impose on American consumers and downstream
industries . The president could still recommend tariffs under Section 232 or other
administrative trade laws, but Congress would retain the ultimate authority to approve or
disapprove, as the Constitution intended.
During his speech announcing the tariffs, President Trump further threatened to impose “reciprocal taxes” on our trading partners. If
another country imposes a 50 percent tariff on cars or motorcycles exported from the United States, for example ,
the United
States will impose a “mirror tax” of the same rate on the same type of products we import
from the other country. Tellingly, the president said nothing about seeking legislation from
Congress.
Such a reciprocal tariff approach would blow up nearly a century of established U.S. trade policy
and would exponentially complicate U.S. trade relations . It would violate policy established by
Congress in 1922 and enshrined in our international trade agreements that commits the
United States to “ unconditional most-favored nation status” in our trade relations. Under this policy, the
United States applies a uniform tariff rate on each import category no matter where the products originate, with the reciprocal
guarantee that U.S. exporters will be on an equal footing with competing exporters in other countries.
For decades after World War II, U.S. trade policy was a bipartisan effort, with both major parties working
together in Congress and with presidents of either party to expand the freedom of Americans to trade and engage in business with
people around the world. Republicans have been integral to this effort. Every major free-trade agreement the United States has
joined in the past 30 years, including the North American Free Trade Agreement, was negotiated by Republican presidents and
approved with strong GOP support in Congress.
The result has been a reduction of trade barriers worldwide, rewarding both American
consumers and producers with lower-priced imports, and American exporters with greater
access to global markets. The world has become a more prosperous, peaceful, and hospitable
place because of this bipartisan policy.
Congress cannot stand idly by while this trade policy achievement is dismantled by
presidential decree.

Plan effectively limits unilateral tariff authority – makes violating WTO rules
illegal
Theodate 18 (Magda, 6/1/18 a senior international lawyer, previously has worked with Inter-
American Development Bank, the World Bank, and UNDP. “Trade & a Crisis of Unilateralism:
Where Is Congress?” www.globalexecutivetrade.com/PDF/TradeandUnilateralism.pdf)
Second, Congress ratified and implemented the Marrakesh Agreement creating the World Trade Organization (WTO) in 1994,
through legislation binding the U.S. on the rules governing international trade (formerly GATT rules). It
can support that legislation by requesting the President use the WTO rules-based, multi-lateral
system to pursue trade grievances, rather than implementing high tariffs based on the
national security assertions . It's unlikely Congress would pursue this route, but that doesn't mean
it shouldn't .
After arguing the merits of free trade for years, the U.S. about-face is brutal! When the U.S. supported the creation of the WTO,
business was supposed to be good for everyone and free trade would supposedly bring about tickle down economics. Over the last
two decades, the results of free trade have been mixed.
The WTO remains the only global forum for countries to work collaboratively to develop trade
engagement rules, and offers established and viable procedures for managing trade disputes
between its members. The U.S., like other members, committed itself to conforming its domestic laws,
regulations, and procedures with the obligations in the treaty establishing the Geneva-based Organization.
Any disputes brought by a member through the Organization's Dispute Settlement Body,
would be evaluated by a dispute panel , and countries faced with a negative decision against
them would either change the action that led to the dispute or face permissible retaliation by
the member(s) bringing the dispute. The Dispute Settlement Body cannot change the domestic rules that are deemed unfair, but it
can permit other countries to retaliate against the action that negatively impacts them.
The U.S. trade tariffs imposed will no doubt see WTO members , who believe the U.S. has
sidelined the WTO, press ahead for retaliatory action for a perceived violation of WTO treatment rules. Those
same members will likely also pursue unilateral or regional bloc action to sanction the U.S. for
its own unilateral tariff impositions.
Only WTO enforcement solves—China has a high record of compliance, there’s
an effective dispute-settlement mechanism for every Trump claim about
Chinese IP theft, and unilateral tariffs fail.
Bacchus 18 (James, 11/30/18 Distinguished University Professor of Global Affairs and director
of the Center for Global Economic and Environmental Opportunity at the University of Central
Florida. “The WTO and the China Challenge” https://www.heritage.org/trade/report/the-wto-
and-the-china-challenge)
There may be things outside the scope of the WTO that we need to address on a bilateral basis. But even on those things, I think
we need to proceed with facts, not with impressions of the WTO and rhetoric about how we
got to where we are today. To get a fuller understanding of this issue, the role of the WTO in this dispute with China, and
to address the larger challenges that China poses to the international system, I reached out to someone who knows these issues
better than almost anyone—former two-time chairman of the appellate body of the WTO, James Bacchus. By way of introduction,
let me also say that Jim is the Distinguished University Professor of Global Affairs and director of the Center for Global Economic and
Environmental Opportunity at the University of Central Florida.
He’s also a former U.S. Congressman. He’s very well-published, including two books—Trade and Freedom from 2004, and the just-released, The Willing World: Shaping and Sharing a Sustainable Global Prosperity.
I have to say, though, that the affiliation that most recommends him to me personally is the one with the Cato Institute. All those other accomplishments are great, but when I saw that, I thought, we’ve got to get
him over here. Cato is doing, in my opinion, excellent work on trade. Really indispensable at this point in the debate. So, Jim, I’m going to turn the podium over to you and let you talk to us about this issue, and
then we’ll hear from our other guests. I’ll introduce them, and we can get a conversation going. Thank you.
James Bacchus: Thank you so much, Walter, and thank you all for coming this morning. It’s a pleasure to be at The Heritage Foundation, you do great work, too. Heritage has always understood that when we
speak of human freedom, we have to include trade. Free trade is an opportunity for more human freedom. One of my roles in the world that Walter did not mention is my role as a professor of international law at
Zhejiang University in Hangzhou in China, which has the largest law school in China. I teach there from time to time about international law, international trade law, and the international rule of law, which I
believe is important to freedom everywhere.
After my last visit to Zhejiang University, I was escorted back to the airport by one of my brightest students, a young man who always had many questions. As we were riding to the airport, he turned from the
front seat and asked me, “Professor, who is your favorite American President?” I replied, “Abraham Lincoln.” He smiled and said, “Abraham Lincoln is my favorite President too.” Then he proceeded to quote the
Gettysburg Address in its entirety, word for word. I thought to myself, How many of us in the United States can do that? I also realized that my young student shared the American idea of freedom.
China can only rise ... if the Chinese people become more free, including economic freedom.
It is my impression that the Chinese people do not want to become Americans, but they are yearning to be free. They want to be Chinese, but they want to be free and it is very much in our interest, as Americans,
for the Chinese to be free. To be free, they have to rise economically, because only with economic opportunity, trade, and commerce can there be more opportunities to be free. So, the question is, How should
China rise? More particularly, How can China rise?
In my view, China can only rise, it can only climb the ladder of competitive advantage in the world, if the Chinese people become more free, including economic freedom. The vast amount of the economic growth
in China over the past generation has come from the embrace of private enterprise and the innovations of a growing private sector in China. It does not come from the inefficient, debt-ridden state-owned
enterprises. Yet, the Chinese focus, at this point, seems to be away from the market, away from economic freedom, and back toward state control, state-driven efforts at growth, and discrimination against foreign
participation in growth. All that, in my view, will not lead to a lasting and shared economic growth for the Chinese people.
So, my comments today are offered as a friend of the Chinese people, because I believe that what they should be doing is what the U.S. should be asking them to do. It is something in our mutual interest, and that
is to embrace free trade and economic freedom, both in China and the United States.
When I was a young man at the Office of the United States Trade Representative (USTR) as a trade negotiator, I had the privilege of helping to implement the first bilateral trade agreement between China and the
United States. Later, while I was in the Congress, I was a strong supporter of getting normal trade relations, called “most favored nation” status at the time, to China. This was even before China became a member
of the WTO. While I was with the WTO, I was a strong supporter of Chinese membership. As a judge on the appellate body of the WTO, I had the responsibility of judging the first appeal in a dispute that engaged
China in a WTO settlement, and I happened to rule in favor of China and quite a few other complaining parties in a dispute over steel safeguards imposed by the United States.
I don’t want to disillusion you, but the United States of America does not always fulfill every one of its obligations under the WTO treaty. So, I have watched as China has become a member of the WTO and has
benefited from membership in the WTO enormously. As I go back and forth between here and China several times a year, I realize that China has a much better understanding of the benefits it derives from
membership in the WTO than we do here in the United States, and that is especially so now. This underlies the current trade confrontation between the two
countries.
How is it that we can help China rise while also helping ourselves to continue to grow
economically and sustainably? The best way is certainly not to build walls between China and
the United States. It is not to impose new tariff barriers . In my view, virtually all of the tariffs that
the current Administration has applied, not only to China, but to many other countries during the past two years,
are illegal under international law. Seventeen cases have been filed against the United States of America so far this
year in WTO dispute settlement. We’ll see what my successors on the appellate body have to say, if indeed there is an appellate
body in the next year or two. At the end of this week, because of inexcusable, shameful political intimidation by the United States of
America and its refusal to join the consensus to appoint and reappoint members of the appellate body, the final court of
appeals in WTO dispute settlement will be down to just three judges.
It takes at least three judges to decide an appeal, and we now have the interesting situation in
which the U nited S tates of America is stone-walling efforts to provide the appellate body with its
full complement of seven judges and at the same time, criticizing the appellate body and WTO panels for the fact that
their process of dispute resolution is getting slower because they don’t have enough judges.
What should we be doing with respect to our relations with China? We should be relying
more on the WTO and not less . Instead of undermining WTO obligations, instead of circumventing
WTO rules, instead of violating WTO rules, we should be employing WTO rules to secure the changes that
we seek in China. China has a right to rise; China does not have a right to violate its WTO obligations.
The Chinese tell us that they are strong supporters of the WTO and they are intent on
complying with their WTO obligations. This assurance should be put to the test.
It has become a truism in the U.S. media that the WTO does not offer any opportunities for
resolving our very real concerns about how China is treating American products and American businesses.
Nowadays if you say something often enough that’s not true, it seems that people begin to believe it. This is just one example of
how we’re being told things that simply are not true.
Certainly, the WTO is in need of improvement and modernization. Certainly, there are places where we need to improve WTO rules,
butthere are many WTO rules that right now offer opportunities for us in engagement with
China and dispute settlement . We should proceed with even more dispute settlement against
China in the WTO, even as the Chinese should do what they are doing, which is to respond to our illegal actions with WTO
complaints of their own.
The purpose of the WTO is to provide an arena for the peaceful settlements of trade disputes. The
WTO has resolved, in
the course of the past 20 years and more, a total of more than 500 international trade
disputes, positively, successfully, lastingly. Moreover, the mere presence of a rule-based global
trading system provides an atmosphere in which most countries comply with most all their
trade obligations, in most all of their commerce every day. Disputes are resolved because the disputing
parties know that there is a binding dispute settlement system backed by the last resort of
economic sanctions. These disputes never get to the WTO.
The Chinese, when they have been brought to the WTO and found not to have acted consistently with their obligations, have
had a good record of complying with WTO rulings against them . Indeed, in some respects they have a
better record of compliance than the U nited S tates of America, which drags its feet endlessly in compliance. Think
of the zeroing disputes over anti-dumping rules.
What are some of these opportunities that we should be pursuing in the United States, in our disputes with China over trade? First
of all, many people say, “Well you can’t really pin down the Chinese because so much of what
they do is elusive.” It’s hard to challenge them by identifying the measure in WTO terminology that must be challenged, the
measure being the actual action by the state that consists of a WTO violation. But the truth is that the jurisprudence
in the WTO takes a broad view of what a measure can be, and there have been any number of
cases in which the United States itself has been able to do a great deal of excellent legal work in
identifying measures that are elusive in China and elsewhere . I am confident that this can be
done by the USTR, the legal office for trade disputes, if it is charged with doing so.
Look, for example, at the “Made in China 2025” industrial strategy of the Chinese. A strategy that, I believe, will not lead to lasting
economic growth or technological leadership by China, but will take the Chinese in the opposite direction; then we can see a number
of opportunities for the United States to challenge it. Where there are, for example, local content requirements, where
there are requirements that Chinese goods and services be used instead of imported goods and services. These
requirements are illegal under WTO rules. They can be challenged and there is a whole string of WTO cases in which
local content requirements have been held to be in violation of WTO rules.
There’s also the issue of technology transfer. We’re told that there’s simply no recourse in
WTO rules for challenging requirements of the Chinese for technology transfer, yet if you look
at the Accession Agreement that China signed, it binds China. As a member of the WTO, you
find there are specific provisions prohibiting forced technology transfer. These provisions can
give rise to claims in WTO dispute settlements against such required technology transfer.
We’re concerned about the loss of trade secrets, and we should be. This is a big concern of U.S. companies doing
business in China. We say there’s no recourse in the WTO, and yet there is a specific article in the WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) that provides protection for trade
secrets. In fact, the protection provided for trade secrets in the WTO intellectual property (IP)
agreement, the TRIPS Agreement, goes considerably beyond anything that has been said about trade secrets in other
international intellectual property conventions. Yet, we’re ignoring the opportunity provided by this article to
support claims in WTO dispute settlement against China where China has violated this
obligation.
I’m also of the view that there
is an opportunity for the U nited S tates to bring a systemic case in the
WTO against China relating to the continuing failure of the Chinese government to protect
intellectual property rights throughout China. A whole section of the TRIPS Agreement deals with enforcement. Most
WTO obligations are negative obligations—what I refer to with my law students as “don’ts.” Don’t do this. Don’t do that. For
example, don’t discriminate against foreign providers and foreign goods in favor of local providers and local goods— but
the
intellectual property convention has a section on enforcement of intellectual property rights.
Patents, copyrights, trademarks, trade secrets and more, and this section of the TRIPS
Agreement is an affirmative obligation—it’s a do, not a don’t.
It says you must protect intellectual property rights . That article, that section, has been in the TRIPS Agreement
for 25 years. We have had the opportunity all along to bring a systemic case of intellectual
property violations against China and we have refrained from doing so. There is also the issue of
subsidy. We’re told that WTO rules are inadequate to challenge the subsidies that are provided, through the Made in China 2025
program and through other efforts by the Chinese government to prop up state-owned enterprises. I think we need more subsidies
rules. We need to improve our agreement that relates to subsidies and countervailing measures in the WTO treaty. But there are
many provisions in that agreement that exist right now, and can be used to give rise to claims against Chinese subsidies. A week
before he left office, President Obama had his trade team file a case against China’s agricultural subsidies, which are rising and often
not notified to the WTO as they should be. This case is in process. The United States has a strong case. I’m sure China will do a
thorough job in defending it. The Chinese have an excellent team of trade lawyers in Beijing.
This is the way to resolve disputes about subsidies. Subsidies provided by the Chinese can be challenged by many aspects of the subsidies agreement where they are conditioned on export performance, or where
they’re conditioned on using local inputs, not foreign inputs, into the making of products. Government subsidies are automatically illegal under WTO rules. And where there is a subsidy that is specific to certain
industries or enterprises and that has adverse effects in the marketplace, those subsidies are also illegal under WTO rules. There are, at this point, dozens of cases in the WTO that have been resolved under the
subsidies’ agreement where such subsidies have been found to be illegal, and where countries have then withdrawn them.

In bringing these cases, the U nited S tates should not go it alone. United States should enlist
the European Union, Japan, Canada, and others that are equally concerned about some of
these issues. And it’s my belief that, if China is found to have violated these obligations in the WTO
treaty, and if China then complies with the rulings of the WTO as it has generally done quite
well over the past 17 years, then China will be more likely to grow economically and the Chinese
people will be more likely to rise.
There’s much else that can and should be done in negotiations. The U.S. needs to proceed with a bilateral investment treaty with China. China needs to keep its pledge to sign the WTO government procurement
agreement. We need new negotiations in the WTO as part of this WTO reform effort that is now beginning to address some of the gaps that do exist in the rules. I could cite many examples, but to cite just one: To
what extent should government be able to require investors to engage in joint ventures as a condition of entering their marketplace?
Beyond this, we need to act now in ways separate and apart from dispute settlement, but also within the WTO. The United States and China are far apart in their efforts, somehow, to resolve this trade impasse.
Negotiations are going nowhere. At this point, there are no plans to resume negotiations. The latest round of tariffs imposed by the United States, illegally, has caused the Chinese to cancel a planned visit here.
They have, since that time, rejected an offer to engage in new negotiations. Just yesterday they said they feel the United States is engaging in bullying tactics. I think it is. The Chinese have imposed retaliatory
tariffs, which I think are also illegal, and everything is beginning to get out of hand. There’s a danger that all this will spin out of control. We’re seeing some early signs in the United States that investors are
postponing some of their investment plans. We’re hearing warnings from Walmart and other retailers about price increases on the near horizon. We’re seeing the beginnings of some disruptions in the supply
chains of U.S. technology and other companies. The stock market has not yet internalized what’s happening in international trade.
It seems like 2018 will be a good year for the stock market and the U.S. economy, but we should be thinking about 2019. The Chinese are continuing to struggle with their efforts to find the right balance between
growth and stability. Their recent retreat from market forces to more state control of the economy, I think, will not produce lasting economic growth or technological advances. There is a burden of debt in China.
Infrastructure is slowing, in terms of its increase. Growth overall is slowing. This trade confrontation has, to date, not done much to affect the Chinese economy, but it is not a welcome development for China as it
continues to try to rise.
One of the little-noted provisions in the WTO dispute-settlement understanding is Article V, which provides for mediation. Any party to any dispute, any member of the WTO engaged in a dispute with another
member, or members, can request mediation in the WTO at any time. This is an alternative to standard dispute-settlement mediation. It can occur even as litigation occurs. It offers the opportunity for some type
of agreed settlement between the United States and China that can resolve their trade concerns, mutually, without violating the rights of other WTO members.
For example, if the Chinese were to agree that they were going to direct more of their purchases to American producers, they would then be discriminating against producers from other countries that are
members of the WTO. This would be a WTO violation. Managed trade is generally not consistent with WTO obligations. I believe the United States and China should give some thought to seeking WTO mediation. A
thoughtful, objective, neutral mediator might be able to help the two countries find the common ground for a positive solution to this trade dispute.

The Chinese have professed, over and over again, their support for the WTO and for free
trade. Mediation would be an opportunity for China to prove that it means what it says. It would put this Chinese pledge to the
test. The Chinese should be willing to mediate. Of course, the President of the United States has shown nothing but disdain for the
WTO. He denounced the WTO again yesterday in his remarks at the United Nations. Yet, others in his Administration profess to
continue to support the WTO. The President himself says that the WTO needs reform. He seems to be seeking new ways for the
WTO to make the right kind of difference in the world. Why not agree to mediation? After all, he could always denounce the
mediator.
So, in my view, we should be proceeding on two fronts within the WTO. We
should be engaging in dispute
settlement. The U nited S tates should be bringing the claims it has against China in WTO
dispute settlement. And, in turn, China should be bringing the claims it has against the United States in WTO dispute
settlement. And both countries should comply with the rulings.
Our studies are robust – territorial diversion increases the risk of conflict
escalation
Tir 10 (Jaroslav, PhD, professor of political science at University of Colorado at Boulder,
“Territorial Diversion: Diversionary Theory of War and Territorial Conflict,” The Journal of
Politics, Vol. 72, No. 2, April 2010, pp. 413–425)
Neglecting to link territorial and diversionary research is important because the link could be
used to address important critiques leveled against the theory. The critiques have emerged from the
literature’s inability to produce a set of unambiguous, supportive findings. Even though domestic problems may be encouraging
leaders to contemplate diversions, other factors may prevent these incentives from being acted upon. Consequently, a reliable
pattern between diversionary incentives and use of force may not be detectable. Below, I identify the two most
relevant types of critiques and argue that they can be addressed successfully in the context of
territorial diversion .
First, Levy (1998; see also Tir and Jasinski 2008) observes that suitable diversionary targets are quite
difficult to find. For just about all the states in the international system, the loss of strength gradient (Boulding 1962) is so
serious that they are only able to interact militarily with their immediate neighbors. This would limit diversionary opportunities
significantly for all but the most powerful states. Furthermore, many countries would make poor targets because they are important
economic, security, or diplomatic partners or because the attack would go against the constraints posed by the democratic peace
(Russett and Oneal 2001). Cognizant
of these issues, Mitchell and Prins (2004), for example, focus on diversions
between enduring rivals. Enduring rivals (e.g., India-Pakistan) have a history of antagonism, which indicates that they are
willing and able to interacting militarily. Moreover, the context of rivalry can provide an aura of credibility to the leader’s claim that
their actions are conducted not out of selfish interest but for the benefit of the country. And given their already poor relations, the
The problem , however, is that rivalry-related
attacks would not be particularly damaging to their relationship.6
diversionary opportunities are available to only few countries. Enduring rivals constitute only
5.4% of dyads that experience militarized international conflict (Diehl and Goertz 2000) and an even
smaller fraction of all dyads (.4% to 3.75%, depending on how politically relevant dyads are
defined).
The above concerns may be lessened in the context of territorial diversion . First, the power
projection capability is not necessarily an issue because most territorial conflicts take place
precisely between neighboring countries (Tir 2003, 2006; Vasquez 1993). Second, diversionary action
has to be perceived by the population as so important that it is persuaded that the confli ct (i.e.,
the diversion) is worth the cost of damaging or even breaking the otherwise important ties . Territorial
diversion is arguably in a good position to help the leader do this because territorial issues are seen as so central to the matters of
national survival and protection of identity that economic, diplomatic, and other considerations can be subordinated. These
important points suggest that diversionary behavior could be a cross-national phenomenon, not limited to the most powerful or
rival states.
The second critique challenges diversionary theory’s core logical mechanism, which is rooted in the ingroup, outgroup premise (Coser 1956). Diversions are launched to unify a fractured society (i.e., transform it
into the ingroup) by painting the foreign enemy as the outgroup.7 Morgan and Anderson (1999; Morgan and Bickers 1992), however, argue that overcoming the societal division to create a cohesive ingroup is no
easy task. If the leader calculates that surmounting this important obstacle is unlikely, then they would presumably be deterred from diverting. I argue below that territorial diversion provides what is probably the
most promising option for unifying the society, because territorial issues have the unique ability to speak to and ‘‘connect’’ with the broad swaths of the population.
Theoretical Argument
In this section, I present arguments specifying why territorial diversion may be particularly attractive for an embattled leader. I contend that territorial diversion can provide the leader with certain advantages,
which are unlikely to be found in the realm of conflicts over other issues. People have unique and strong bonds to land, which can be manipulated by the unscrupulous leader them to mask the true intents of their
actions, which include rally effects and retention of power.
In explaining why researchers have repeatedly found territory to be the most war prone issue (seeHensel 2000; Tir and Vasquez 2010), Vasquez (1993) notes that humans’ tendency to define themselves as
territorial creatures is deeply ingrained into their collective genetic and/or cultural inheritance—arguments well known in the sociobiological and evolutionary psychology literatures (e.g., Buss 1995; Valzelli 1981).
The tendency is seen in the great willingness of people to fight over economically and strategically worthless land, which suggests that the pursuit of territory is more than just about rational, calculating behavior.
It may be either a function of how humans are wired or of learning ‘‘that territorial issues . . . are ‘best’ handled by the use of force and violence’’ (Vasquez 1993, 140). While the related literature debates whether
the traits are more inherent or learned, the point is that the bond people feel to land, their anxiety over who controls it, and their willingness to support the use of force to act on territorial disagreements can all
potentially be manipulated and exploited by the leader who is seeking to distract the people’s attention from the real problems plaguing the country.
A related argument focusing on how people develop their conceptions of self is offered by the constructivist school of thought. Among others, Gottman (1973), Sack (1986), and Touval (1972) find that people
become socialized and emotionally attached to the territory they think of as belonging to them. The land becomes an integral part of their identity, ingrained in the national psyche. This even holds in cases where
there are only weak objective claims to the land in question. Witness, for example, the fervor by which ordinary Chinese respond to suggestions that Tibet is not legitimately Chinese territory. Or consider the
Serbian attitude toward Kosovo. Despite the fact that few Serbs remain there, Milosevic successfully rallied the Serb nation in the late 1980s by arguing that it could hardly afford a repeat of the 1389 Battle of
Kosovo where that land was lost. Such predispositions suggest that disagreements over territorial control quickly turn into highly emotionally charged affairs where objective facts hold little sway. In fact, the
territorial conflict literature argues that the emotional connections and related proclivities feed into the perceptions of land as zerosum, indivisible, and unsubstitutable, where compromises are seen as
improbable, territorial disputes are thought of as irresolvable, and brute force is counted on as the only real means of obtaining (temporary) control (Hensel and Mitchell 2005; Tir 2006; Vasquez 1993). Critically
for this project, the emotions connected to the land are something the unscrupulous leader can attempt to tap into, manipulate, and exploit for their own gain—much like Milosevic did.
Further relevant insights can be derived from prospect theory (e.g., Jervis 1992; Kahneman and Tversky 1979). According to the theory, people are risk acceptant when they perceive that they are losing (as
opposed to gaining) something they value, that is when they are operating in the domain of losses.8 The reference point separating gains from loses is set according to whether one is trying to protect existing
ownership versus acquire something new. Yet, if an individual believes that the object outside of their control rightfully belongs to them, this would imply that the ‘‘loss’’ of the object took place at some point in
the past and the person would be in the domain of losses. The psychological reference point is hence not the objective status quo but rather a mental image of the ‘‘rightful’’ distribution of valued resources
(Berejikian 2004). Undoing the ‘‘loss’’ thus becomes a priority, even if it involves highly risky actions, because accepting the objective status quo would mean accepting the certain loss.
Connecting these arguments with those of constructivism implies that the tendency to become emotionally attached to the land people think of as their own sets their reference point to the domain of losses,
irrespective of whether the defense of currently held land (i.e., an objective loss) or acquisition of land that someone else is controlling (i.e., an objective gain) is in question. That is, by perceiving the disputed land
as rightfully theirs, the people interpret not controlling it to mean a loss—regardless of whether this land ever belonged, or how long ago, to them. Consequently, the people become willing to support risky
courses of action in the belief that they would be ‘‘retaking’’ the land.
A series of important inferences follows from the above insights. The most basic one is that the above attitudes and tendencies toward territory are common human responses. As such, they apply to the
populations of states, which opens them up for manipulation and exploitation by unscrupulous leaders for personal gain. The leader can manufacture, use, or escalate a territorial conflict with another country in
an attempt to manipulate the people’s emotions into becoming willing to give the leader carte blanche or at least a greater benefit of the doubt for taking what under more objective circumstances may be seen as
an unnecessary, questionable, and risky action. The end result, the leader hopes, is that via the mechanism of territorial conflict, the population will increasingly support and rally behind them. Importantly, the
above indicates that the leader can expect their manipulation to be more successful when territorial issues are at stake, rather than some more poorly defined threats to the country, including low politics issues
that can distract people’s attention but not elicit the same level of passion.
Furthermore, because territorial issues are at the heart of human perceptions of identity, they can be used by the leader to overcome societal divisions. The leader can argue that the society as a whole is the
ingroup with a common territorial interest and cast the state controlling, or attempting to control, the land that ‘‘rightfully’’ belongs to the leader’s country as the outgroup. Few other issues are expected to
provide as strong of a bonding experience for a population. Examples of societies like South Korea, which is plagued by deep political divisions, suggest that in the face of territorial crises such as the dispute over
the Dokto Islands with Japan, the society becomes more unified. Territory could therefore be one of the few issues that could, at least temporarily, be used by leaders to overcome internal divisions— including
those that may be caused precisely by controversy over the leader’s rule.
The traditional diversionary argument also relies on portraying the diversionary action as protecting a vital national interest. Yet, the leader’s initiation of a crisis with a far-away, unknown-to-the-public foreign
enemy (a scenario satirized in the movie Wag the Dog) and over an issue not clearly vital to the national interest would have a hard time capturing the public’s attention and creating belief in—and let alone
fervent support for—the leader. After all, many ordinary people know about the diversionary theory, so the leader has to overcome the public’s—and particularly the political opposition’s—natural skepticism that
the action is a mere diversion meant to manipulate the populace. The issue of land control, via the above-described mechanisms—stands a much better chance of accomplishing these tasks.

In sum, territorial
diversions are able (1) to capture the public’s attention, (2) to tap into the
people’s instincts and/or and feelings about their identity, and (3) to help the leader unify a
fractured society behind them. The logic of territorial diversion is thus arguably more compelling and plausible than that
of the more standard version of the theory. The discussion leads to the following hypothesis.
H1: Domestic unpopularity problems that threaten the leader’s ability to retain effective control over their office are associated with an increased likelihood of territorial conflict initiation.
Given the relative ease with which the leader can exploit the population’s instincts and/or attitudes toward territorial control may make territorial diversion appear a relatively risk-free, no-cost option. Yet, this is
certainly not the case. The leader does not know that the diversion will for sure have the desired popularity-boosting effect. They are acting with the hope of a rally, but the rally is by no means guaranteed; prior
research generally reports only small and short-lasting rallies (e.g., Lian and Oneal 1993; see also Chiozza and Goemans 2004, 424). Furthermore, engaging in prolonged or frequent diversions would likely outlast
the desired rally effect, as the public tires of the issue and costs and casualties mount (Gartner and Segura 1998). The leader is hence expected to use diversion sparingly, such as during times when their leadership
abilities are in question—just as the hypothesis suggests. Moreover, the diversion carries with it the inherent risk that the action will not go as planned. Becoming embroiled in protracted, escalating, stalemated,
costly, or losing conflicts is likely to hurt the leader’s popularity (Bueno de Mesquita et al. 2003). Their calculus should therefore be affected by a variety of constraints; the key ones are considered control variables
and are discussed in the next section.
Research Design
Dependent Variables, Spatial-Temporal Domain, and Method of Analysis
In the diversionary research, diversionary activity is not measured directly but rather by associating governmental use of force with diversionary incentive variables that tap into domestic discontent with the
government. I follow a similar approach but focus on uses of military force9 that concern the issue of territorial control. To check the findings’ robustness, I utilize three different operationalizations of my
dependent variable. The first two versions rely on the Militarized Interstate Dispute (MID) data set (Ghosn, Palmer, and Bremer 2004), which identifies militarized disputes between countries, their timing, the
dispute initiator, whether a territorial revision was sought, and fatality numbers.10 Combining this information, I identify (1) all territorial MID initiations (my main dependent variable) and (2) fatal territorial MID
initiations; I use the fatality restriction because disputes involving fatalities may have an easier time capturing the public’s attention and inspiring a rally. Finally, the International Crisis Behavior (ICB) project
defines a foreign policy crisis as a situation in which the highest-level decision makers perceive ‘‘a threat to one or more basic values [to their state], along with an awareness of a finite time for response to the
value threat, and a heightened probability of involvement in military hostilities’’ (Brecher and Wilkenfeld 2000, 3). The project notes the timing of the crisis, perceived initiator (i.e., in this case the state from which
the crisis-related threat is emanating), and whether a territorial threat is involved (i.e., threat of integration or annexation of a part of the target’s territory). By matching perceived initiators with territorial threats,
I derive a list of (3) territorial crisis initiations. Each of the three dependent variables enters into the below-defined data set dichotomously, depending on whether the relevant event took place in a given year.
The directed dyadic approach, which can simultaneously capture conditions within the prospective initiator country as well as the identity of and relationships with potential target states, is utilized. Monadic
design, popular in early studies of diversion, is equipped to perform only the first task (Bennett and Stam 2000b). With the help of the EUGene software (Bennett and Stam 2000a), I create a directed dyad-year (my
unit of analysis) data set of all contiguous (up to 400 miles of water)11 pairs of states. The analyses are restricted to the post-World War II period due to availability of economic data.
Given the dichotomous structure of the dependent variables, I rely on logit for my analyses. Robust standard errors are employed to account for the observations from the same dyad being related. I use the Beck,
Katz, and Tucker (1998) binary timeseries cross-section correction to account for the fact that my data are composed of several cross-sections (i.e., dyads) and to deal with potential duration dependence as these
cross-sections are observed over time. To save space, the associated years of peace and natural cubic spline (with three interior knots) variables are omitted from the table. And finally, all the right-hand-side
variables (with the exception of elections) are lagged by one year, in order to make sure that the presumed causes actually precede the use of force; such a setup is also reasonable as it may take a little bit of time
for discontent to spur the leader into a territorial diversion.
The Main Independent Variables
The ideal indicator of the diversionary incentive, the leader’s popularity rating, is either unavailable for a broad range of countries or cannot be trusted as it is subject to governmental manipulation. As a
substitute, I rely on two proxy indicators of the leader’s (un)popularity. The first one captures the extent to which the citizens of a country are visibly dissatisfied with their government. I sum the incidents of
protests, strikes, and riots from the Cross-National Time-Series (CNTS) Archive (2005) into an index reporting the number of unrest activities in a given country in a given year.12 Pickering and Kisangani (2005;
Kisangani and Pickering 2007) have a similar approach. The second indicator, the economic (GDP) growth rate is typically used in the diversionary research (e.g., Hess and Orphanides 1995; James and Oneal 1991;
Oneal and Tir 2006; Pickering and Kisangani 2005) because the state of the economy is seen as an important predictor of leaders’ popularity (Hibbs 1987; MacKuen, Erikson, and Stimson 1992). To check the
robustness of my findings, I rely on two different sources for the growth rate, Gleditsch (2002), abbreviated below as KSG, and the CNTS Archive (2005).13
Control Variables
I control for several influences that have been found to affect the likelihood of dyadic conflict. To capture countries’ relative power, I use the Correlates of War project’s combined index of military capabilities
(Singer 1988) and create a measure that takes the natural logarithm of the ratio of the stronger country’s capabilities to those of the weaker member of the dyad. I control for whether the dyad is democratic by
noting whether both member states achieve a score greater than 6 on Polity IV’s (Marshall and Jaggers 2002) scale. Allies may fight each other less because they share common security interests; I control for this
with data from Gibler and Sarkees (2004). To capture the potential deterrent effects of trade, I divide the sum of the initiator’s exports and imports with the prospective target by the initiator’s GDP (all from
Gleditsch 2002); the measure captures the extent to which the initiator’s economy is dependent on the target. Because for most states the ability to fight is determined primarily by geographic proximity—I control
for the effects of distance between the dyad members (Stinnett et al. 2002); see also note 11. Finally, diversions are thought to be the most likely right before elections, because this is when the leaders are the
most likely to need a boost in their popularity ratings (e.g., Hess and Orphanides 1995; Smith 1996). I code upcoming elections by using the CNTS Archive (2005).
Results and Discussion
Each Model in Table 1 employs a different combination of territorial conflict (the dependent variable) and economic growth (an independent variable) operationalizations. Starting the evaluation of H1 with the
government unpopularity variable, its coefficient is consistently significant and positive in Models 1–6. The likelihood of territorial conflict initiation increases significantly as the government becomes more
unpopular, and this finding is robust to all the alternate specifications of the dependent variable. With the hope of deflecting attention from domestic unrest and creating a rally effect, embattled leaders initiate
territorial conflicts. By focusing on territorial diversions, my findings thus provide clear support for the detrimental effects of domestic unrest. Other than in Tir and Jasinski’s (2008) work on diversion against
domestic ethnic groups, findings for domestic unrest proved to be elusive in Rummel (1963) and Tanter (1966) and inconsistent in Pickering and Kisangani’s (2005; see also Kisangani and Pickering 2007) study.
None of these works, however, consider the possibility of territorial diversion.
Empirical support for the economic growth rate is much weaker. The finding that poor economic performance is associated with a
higher likelihood of territorial conflict initiation is significant only in Models 3–4.14 The weak results are not altogether surprising
given the findings from prior literature. In accordance with the insignificant relationships of Models 1–2 and 5–6, Ostrom and Job
(1986), for example, note that the likelihood that a U.S. President will use force is uncertain, as the bad economy might create
incentives both to divert the public’s attention with a foreign adventure and to focus on solving the economic problem, thus
reducing the inclination to act abroad. Similarly, Fordham (1998a, 1998b), DeRouen (1995), and Gowa (1998) find no relation
between a poor economy and U.S. use of force. Furthermore, Leeds and Davis (1997) conclude that the conflictinitiating behavior of
18 industrialized democracies is unrelated to economic conditions as do Pickering and Kisangani (2005) and Russett and Oneal
more in line with my findings of a significant relationship (in Models
(2001) in global studies. In contrast and
3–4), Hess and Orphanides (1995), for example, argue that economic recessions are linked with
forceful action by an incumbent U.S. president . Furthermore, Fordham’s (2002) revision of
Gowa’s (1998) analysis shows some effect of a bad economy and DeRouen and Peake (2002)
report that U.S. use of force diverts the public’s attention from a poor economy. Among cross-
national studies , Oneal and Russett (1997) report that slow growth increases the incidence of
militarized disputes, as does Russett (1990)—but only for the United States ; slow growth does not affect the
behavior of other countries. Kisangani and Pickering (2007) report some significant associations, but they are sensitive to model
specification, while Tir and Jasinski (2008) find a clearer link between economic underperformance and increased attacks on
domestic ethnic minorities. While none of these works has focused on territorial diversions, my own inconsistent findings for
economic growth fit well with the mixed results reported in the literature.15
Hypothesis 1 thus receives strong support via the unpopularity variable but only weak support via the economic growth variable.
These results suggest that embattled leaders are much more likely to respond with territorial
diversions to direct signs of their unpopularity (e.g., strikes, protests, riots) than to general background
conditions such as economic malaise. Presumably, protesters can be distracted via territorial diversions while fixing
the economy would take a more concerted and prolonged policy effort. Bad economic conditions seem to
motivate only the most serious, fatal territorial confrontations . This implies that leaders may
be reserving the most high-profile and risky diversions for the times when they are the most
desperate , that is when their power is threatened both by signs of discontent with their rule
and by more systemic problems plaguing the country (i.e., an underperforming economy).
Next, I conduct a series of follow-up tests suggested by an anonymous Reviewer; results based on the reanalysis of
Model 1 are presented in the online appendix. Evaluating the implication that territorial diversions are indeed
more likely to result from diversionary conditions than nonterritorial diversions , I set up a
multinomial logit model that contrasts the initiation of territorial MIDs versus nonterritorial MIDs (base outcome). The results show
a positive and statistically significant coefficient for the government unpopularity variable (first column of Table 3), meaning that
higher levels of government unpopularity are more likely to produce territorial rather than nonterritorial MIDs. Further
checks
include performing rare events logit (King and Zeng 2001) and population-averaged logit analyses to
verify whether the rare events nature of the dependent variable or cross-sectional
characteristics of the data alter the findings, respectively . The findings for the two
independent variables remain unchanged (see Table 3, columns two and three). Finally, protesting behavior in
more populous countries could be considered more ‘‘normal’’ and less threatening to the government, potentially lowering the
incentive to divert. Dividing the government unpopularity variable by the log of country’s population (from the Correlates of War
National Capabilities data set, Singer 1987) reveals that the population size-standardized government unpopularity variable remains
positive and significant; see Table 3, final column.
Concerning the control variables, the effects of power and distance are consistent with expectations and across the Models in Table
1. Democracy, alliance ties, and trade coefficients have mostly the expected dampening influence on territorial conflict initiation; but
only trade exhibits a significant impact and only when the dependent variable is the fatal territorial MID (i.e., in Models 3–4). 16
These results are somewhat surprising, but the reader is reminded that the effects of alliance are highly contested (see Maoz 2000),
while the impact of trade has not been established in the domain of territorial conflict. Similarly, recent research shows that the
democratic peace weakens considerably in the context of territorial conflict (James, Park, and Choi
2006) and that the democratic peace may be epiphenomenal to territorial peace (Gibler 2007). 17
Importantly, the control variable results imply that some of the related interests (e.g., security,
regime ties) may indeed be subordinated to the territorial diversion impetus.
Revisiting the link between regime type and diversion, some scholars argue that democratic
leaders have a greater motivation—due to the need for popular support—for diversion (e.g., Gelpi 1997; Russett
1990; Smith 1996). Yet, others (e.g., Downs and Rocke 1994; Miller 1995; Pickering and Kisangani 2005) assert that
authoritarian leaders need popular support in order to appear legitimate . Because they cannot derive
legitimacy from democratic institutions and elections, they look to diversions to help them achieve this goal. Autocrats can also
divert with greater impunity due to the lack of institutional checks and balances. In follow-up tests available from the online
appendix, Table 4, I restrict the set of initiator countries in Model 1 to democracies only, autocracies only, all nondemocracies, and
all nonautocracies. That the
findings hold suggests that both democratic and autocratic leaders value
territorial diversions . Nevertheless, resolving the broader debate is beyond the scope of this study.
2AC
 2AC Protectionism
Status quo is net more protectionist—Congress results in less special interest
lobbying
Meyer and Sitaraman ’18 (6/26/18. Timothy Meyer is a Professor of Law FedEx Research
Professor Director, International Legal Studies Program, Vanderbilt University. Ganesh
Sitaraman is Chancellor Faculty Fellow Professor of Law Director, Program in Law and
Government, Vanderbilt University. “A Trade Policy for All: Market Liberalization Should Be a
Means, Not an End,” https://www.foreignaffairs.com/articles/2018-06-26/trade-policy-all)
Not since the end of World War II has international trade policy been so central to global politics for such a sustained period of time.
As a presidential candidate, Donald Trump campaigned against trade agreements, winning the election with the support of
midwestern states devastated by the loss of their manufacturing base. The United Kingdom’s decision to leave the European Union
was motivated in part by a sense that decisions affecting its domestic economy should be made in Britain, not Brussels. Across
Europe, right-wing parties skeptical of the international institutions that have promoted and supported trade liberalization are
enjoying electoral success not seen since the 1930s.
These events have initiated yet another round of clashes in the long-running battle between self-described free traders and so-called
protectionists. But their debates have proven tired at best and counterproductive at worst. For one thing, neither side believes in
truly free trade or true protectionism. Both recognize that trade has had significant consequences for the distribution of wealth and
that, at the same time, many communities depend on export markets.
Meanwhile, policy elites on both sides have tried to distance themselves from the fray, subscribing
instead to a modern consensus in favor of ever more trade liberalization , and they continue to invoke
economic growth as the primary justification. To the extent individuals lose jobs or find wages suppressed
by overseas competition, the argument goes, new, better-paying jobs will be created
elsewhere in the economy, while the overall gains can be used to compensate the losers.
The bipartisan acceptance of this justification is baffling . In domestic economic policy, trickle-
down economics has become a pejorative term. Few believe that simply cutting taxes, for
instance, creates widely shared benefits. Instead, debates about tax reform are driven by arguments
about winners and losers , not overall benefits to the economy. Yet in international economic policy, a
bipartisan consensus has until recently favored cutting trade barriers such as tariffs, which are
simply taxes on imported products, and letting the market distribute the gains . The ongoing
anti-trade backlash is the inevitable result.
The United States needs a new approach to trade policy , one that does more than seek to
maximize overall economic growth, particularly when the benefits go disproportionately to
global corporations and the wealthy. We call this new approach “trade policy for all,” and it involves three core
principles. First, trade policy should strengthen the middle class and support foreign policy goals .
Second, it should seek to reform domestic and international trade institutions , both of which are
rigged to serve elite interests. And finally, redistribution needs to be central to trade policy rather
than an afterthought.
A MEANS TO AN END
Although economic growth is an important objective of trade policy, it is a means to an end, not an end in
itself. The framers of the U.S. Constitution believed that trade policy should serve a variety of U.S.
interests and thus assigned power over tariffs and foreign commerce to Congress , the federal
institution most in touch with local communities’ diverse needs and wishes . Few would support a
trade policy in which 100 percent of the benefits of growth go to a single individual, however much GDP rises. Economic
growth is a tool for bettering the quality of life for all Americans . And it provides an engine that
allows the United States to defend its interests abroad while remaining the land of opportunity at
home. In this vein, a new trade policy should adopt two primary goals: building a strong middle
class and serving U.S. foreign policy.
In the past, support for the middle class was, in fact, one of the paramount aims of trade policy.
In the nineteenth century, the U.S. government used trade policy to push workers’ wages up and develop infant industries. In the
middle of the twentieth century, trade policy expanded U.S. exports abroad, creating more jobs at home. The
goal of a
strong middle class need not dictate liberalization or protectionism . Either, or both, might be
appropriate depending on the context. But what is clear is that it is not enough to simply assume that
what’s good for big business is good for the U nited S tates.
In recent decades, sustained trade liberalization has consistently favored capital at the expense of labor .
Today, large U.S. corporations make many of their products and a great deal of their profits overseas. As a
consequence, corporations often lobby the government for trade deals that allow them to cut
wages at home and offshore jobs. Companies that rely on intellectual property, such as pharmaceutical
firms, might lobby the U.S. government to lower trade barriers on products in exchange for stronger
intellectual property protections overseas. As a result of these trends, the gains from trade liberalization in
the United States come disproportionately in the form of returns to the shareholder class , while
institutions that support the middle class, such as labor unions and pension programs for
workers, have languished . The economists Christoph Lakner and Branko Milanovic produced a chart—dubbed the
“elephant chart” because of two peaks in the middle and one at the very right that resemble a head and a trunk—showing that the
lion’s share of economic growth from 1988 to 2008, the period in which trade liberalization accelerated with
the creation of the World Trade Organization (WTO) and the spread of preferential trade agreements, went to the global
elite and the middle class in emerging markets, most notably China. Meanwhile, incomes among the lower-middle
and working classes in countries such as the United States stagnated.
The second primary goal of trade policy should be to advance foreign policy aims. Trade policy has always
been a tool for geopolitics. Trade liberalization helped rebuild Europe and Asia after World War II and was a central part of the
strategy that won the Cold War. Restricting trade can also be part of a coherent negotiating strategy. Critics cry “protectionism”
when an administration raises trade barriers, but raising
barriers to give countries an inducement to
negotiate (on trade or other matters) can be entirely consistent with using trade as part of a successful
diplomatic strategy. Consider, for example, the use of economic sanctions on Iran or North Korea in order to
force those governments to the negotiating table. Economic sanctions are quintessentially a restriction on trade, used to accomplish
a geopolitical aim. Few have a problem with this from a “free trade” perspective.
In recent years, U.S. leaders have adopted foreign policy rhetoric more widely with respect to trade agreements, but the geopolitical
aims of the agreements have become obscured. If
trade agreements are linked to diplomatic objectives, the
connection between the trade agreement and diplomatic strategy must be clear. Negotiating trade agreements with
countries such as Australia, Jordan, and Israel to shore up support for important military allies—with minimal impact on the U.S.
economy—makes sense. Entering into the Trans-Pacific Partnership makes less sense when justified by vague references to
encircling China. The Obama administration resorted to this anti-China justification after the government’s own estimates of the
TPP’s impact projected virtually no benefit to the U.S. economy as a whole—less than half a percent increase in U.S. GDP by 2032—
while exposing certain sectors of the U.S. economy, such as textile manufacturing, to increased foreign competition. If
a trade
agreement is meant to have foreign policy goals, it should be designed, negotiated, and
justified on the basis of those specific objectives.
INNOVATING FOR BETTER TRADE
Part of the reason trade policy has not focused on the right goals is that trade institutions , both
domestic and international, have been set up to privilege the most powerful economic actors. By way of
example, consider how the Office of the U.S. Trade Representative negotiates agreements. The USTR gives a variety of
industry advisory committees privileged access to the proposed text of trade agreements. During the
recent TPP negotiations, even members of Congress were not allowed to debate these provisions in
public because the government classified the proposals. The effect of this system is to skew trade-policy making in
the interest of specific industry groups . The interests of ordinary workers and small businesses
that don’t have such access fall by the wayside.
 trade-policy making needs to change . The USTR’s process must become
Domestically and internationally,
more transparent and more responsive to the interests of ordinary Americans . The U.S. International Trade
Commission, which already estimates the effects of U.S. trade agreements on the national economy and specific sectors, should also
be required to perform impact assessments on a geographic basis to provide a sense of how individual communities and states will
fare.
 AT: Navy Impact
Their impacts are all industry garbage – all military requirements are less than
1% of domestic steel, shipbuilding capcity is an alt cause
Hasik 5/10/17 (James Hasik is a senior fellow at the Brent Scowcroft Center on International Security at the Atlantic
Council. Is Imported Steel a Threat to American National Security? https://www.atlanticcouncil.org/blogs/defense-industrialist/is-
imported-steel-a-threat-to-american-national-security)
In the US, industry likes to talk up its game , alluding to a frightening future without domestic
steel production. In its somewhat dated flyer “Backbone Industry in National Defense,” the
American Iron and Steel Institute reminds us that “the ten [aircraft] carriers constructed in
recent years consumed 500,000 tons of steel. ” If recent years means the last half century, then that’s about right.
The US Navy buys about one super-carrier every five years , so annual requirements are about
10,000 tons. Add in the rest of American naval shipbuilding—roughly two destroyers, two submarines, two
frigates, an assault ship, some cutters, and a few cargo ships each year—and the annual total does not exceed 100,000 tons.
Important speciality steels go into aircraft production; the tonnages are just trivial in this context. Add in the ground
forces’
needs for vehicles, and in sum American military requirements still draw considerably less than one
percent of domestic steel output .
But should Defense and Commerce worry in this regard about the Chinese? As noted, they have half the world’s steel
output, almost half the world’s shipbuilding, and a large and growing navy. This sounds roughly like the problem that the Japanese
Empire faced in choosing to attack in 1941—just in reverse for the United States. Today, the US isn’t in the middle of a massive war
that consumes steel for vast quantities of tanks, ships, and armaments. But could it be? And then what would the Army and Navy
do?
For context, note also that the
American steel industry is producing more steel product today than it
was during the Second World War. The wartime peak was just 60.5 million tons in 1943. At the end of that war, the US
was producing about 70 percent of all raw steel worldwide, but the difference was in the denominator: German and Japanese steel
had been bombed out of existence. Today, the
US is producing roughly the same amount of raw steel as it
did then; the excess was exported, as American foundries were feeding factories and
shipyards in Canada and Britain. All of this was enough for the huge armadas that defeated the
Axis Powers, and the US actually has more capacity today . If anything, it’s shipbuilding capacity
that the Navy lacks for an emergency . If there is to be a future bottleneck in a global war, it
will be found in skilled shipbuilders and graving docks, far before we’re searching for more
steel plate.
Summary. So how should we assess the effect of steel imports on national security? In the short run, anticipate that foreign suppliers
will respond—and maybe faster than Americans—just as they did during the Iraq War. In that regard, steel imports haven't impaired
the national security. On the contrary, they have improved it. In
the future, if there are any difficulties with
existing overseas suppliers, those “intergovernmental discussions” can be helpful . In the long run,
relative to its current and future military needs, the US has vast excess capacity for steel
production . If there is an issue, as evidenced by the MRAP experience, it is that the US may lack the specialized capacity for all
its military needs. As the commerce secretary investigates, he might profitably direct efforts into the details; defense-industrial
problems are often not as simple as the headlines might suggest.
T
 2AC T – Restrict
We meet -- the aff prohibits Trump tariff power.
Restrict means a limit- not just prohibition – only our interp is in the context of
commerce
Espa 15 (Ilaria, Assistant Professor of International Economic Law at USI Lugano, Senior Research Fellow and Lecturer at the
World Trade Institute and at the University of Milan. Formerly awarded a Marie Curie fellowship from the European Commission for
her post-doctoral studies, Ilaria was a member of the NCCR Trade Regulation Programme from 2013 until 2017, in addition to acting
as Scientific Coordinator of the WTI Doctoral Programme. She holds a PhD in International Law and Economics from the Department
of Legal Studies of Bocconi University and was a visiting scholar at Columbia Law School in 2012. She also holds a BA in Political
Science and an MA in International Relations from Luiss University, Export Restrictions on Critical Minerals and Metals, pg. 170-171)
A consistent body of WTO case law has broadly interpreted the term 'restrictions' to cover a wide
range of measures not solely including measures that may be considered formal quantitative restrictions, such as quotas,
but also a whole variety of means that can have a limiting effect on trade, that is, the effect of reducing the
Volume of imports or exports. In India-Quantitative Restrictions, the Panel posited that 'the scope of the term
"restriction" is broad, as seen in its ordinary meaning, which is "a limitation on action, a
limiting condition or regulation'".' In India- Autos, the Panel endorsed this interpretation and further elaborated on the
meaning of the term 'restrictions': On a plain reading, it is clear that a 'restriction' need not be a blanket
prohibition or a precise numerical limit. Indeed, the term 'restriction' cannot mean merely 'prohibition' on
importation, since Article XI:l expressly covers both 'prohibition and restriction'. Furthermore, the Panel considers that the
expression 'limiting condition' used in India- Quantitative Restrictions to define the term 'restriction' and which this Panel
endorses, is helpful in identifying the scope of the notion in the context of the facts before it. That phrase suggests the need to
identify not merely a condition placed on importation, but a condition that is limiting, i.e. that has a limiting
effect. In the context of Article XI, that limiting effect must be on importation itself.' It inferred that 'any form of limitation imposed
on, or in relation to importation constitutes a restriction on importation within the meaning of Article XI:1'.3 In Col0mbz'a-Ports of
Entry, the Panel further clarified that the term 'restrictions' in the sense contemplated by Article XI:1 encompasses 'measures that
create uncertainties and affect investment plans, restrict market access for imports, or make importation prohibitively costly'.4 In
China-Raw Materials, the
Panel further added that any measure having 'the very potential to limit trade constitute[s] a "restriction" within the meaning of
Art. XI:1 of the GATT 1994'.5
WTO CP
 2AC Stock Market
Unilateral tariffs sink the stock market
White 12/19/18 (Ben, Politico Analyst, "Trump can’t have his tariffs and the stock market too"
https://www.politico.com/story/2018/12/19/trump-stock-market-tariffs-1038383)
President Donald Trump
loves two things very much: tariffs and a rising stock market. It’s becoming
increasingly clear he can’t have both. Free-traders inside and outside the White House are now hoping that Trump’s
love for new highs on Wall Street will temper his commitment to trade battles and help bring the current fight with China to a soft
landing rather than total war next year. “I think Trump the Dow Jones Man is ultimately going to eat Trump the Tariff Man,” said one
former senior administration official intimately familiar with the president’s stock market obsession, citing Trump’s touting of a
recent agreement to hold off on increased tariffs after a dinner with Chinese President Xi Jinping. “What he agreed to after that
dinner had basically been on the table for two years. He knew he had to give Wall Street something.” Both markets and Trump are
fixated on the Federal Reserve this week, with the central bank expected to raise rates by another quarter point on Wednesday. But
no matter what the Fed does, investors early next year will pivot to the showdown between
Trump and the Chinese . And pressure from Wall Street could push Trump to cut a deal. “The question is, what is Trump’s
pain threshold? And what is China’s pain threshold? It’s almost like two cars zooming toward each other. Which one is going to turn
first?” asked Stephen Moore, visiting fellow at the Heritage Foundation and an outside Trump adviser. “If the stock market fell
another 1,000 points it would give him pause. He does love a bull market and hate a bear market. But he also feels this is the fight of
our lifetime.” The tensions between Trump’s commitment to tariffs and his love for a soaring stock market are at the highest of his
presidency. After
markets soared in 2017, Wall Street hit a wall, with stocks dropping in recent
weeks in part on fears that China and the U.S. will not reach an agreement by a March 1
deadline and Trump will slap tariffs as high as 25 percent on everything China exports to the
U.S., inviting significant retaliation. The Dow Jones is now down around 1,000 points, or close to 5 percent, for 2018.
The Standard & Poor’s 500 is also lower for the year, as is the Nasdaq, home to tech stocks like Apple that are highly sensitive to
tensions with China and potential tariffs. All three indices are now in “correction” territory, meaning a drop of 10 percent from their
recent highs. And investors blame trade tension for much of the declines. “It’s really all about the
global economy slowing down, and that’s directly linked to the trade dispute between the
world’s largest economy and the world’s second-largest economy ,”said Jack Ablin, chief investment
officer at Cresset Capital Management. “What market participants thought was just tactics from Trump on
China could turn into policy, and if that’s the case then investors are going to be held hostage .”
Trump and other senior administration officials, including Treasury Secretary Steven Mnuchin, have long considered the stock
market a scorecard on White House performance. Trump has touted a rising market over 30 times on Twitter since taking office. And
senior aides say he watches market moves throughout the day on cable news and regularly asks how his potential decisions will
impact Wall Street. “You walk in the Oval and he wants a stock market quote, I give him that,” Larry Kudlow, Trump’s top economic
adviser, said in a recent interview. When the market is falling, Trump wants to know precisely why, Kudlow said. The recent standoff
with China has highlighted the tension between Trump’s love for tariffs and his fixation on higher stock prices as a measure of his
success. Immediately after the meeting with Xi in Buenos Aires, markets shot higher. When it became clear that the two sides
remained far apart on key issues, and that the White House itself was divided on the path forward, the rally fizzled. Trump tried to
reassure investors on Dec. 3. “President Xi and I have a very strong and personal relationship. He and I are the only two people that
can bring about massive and very positive change, on trade and far beyond, between our two great Nations,” he tweeted. Just a day
later, Trump issued one of the biggest market-moving tweets of his presidency, killing much of the post-China meeting rally. “I am a
Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing
so,” Trump tweeted the morning of Dec. 4. “It will always be the best way to max out our economic power. We are right now taking
in $billions in Tariffs. MAKE AMERICA RICH AGAIN.” The Dow closed the day down nearly 300 points. Trump then issued a series of
tweets the following day expressing much more optimism about getting a deal with China, signaling to investors that he cares at
least as much about propping up the stock market heading into 2019 and his re-election campaign as he does about truly cracking
down on China. The Trump administration, led by U.S. Trade Representative Robert Lighthizer, is demanding big structural changes
from the Chinese on policies ranging from forced transfer of technology to intellectual property theft. China has indicated it is
unwilling to give in on some of these areas. That could leave Trump with the options of maintaining a hard line and upsetting Wall
Street or taking a more modest deal, declaring victory and potentially setting up a big stock market rally. Wall Street traders and
strategists are counting on Trump’s obsession with the stock market to ensure that the president either accepts some modest
concessions or at least decides enough progress has been made to avoid escalating the trade conflict. Because the alternative — a
stalemate on March 1 that leads to increased tariffs from the U.S. and retaliation from China — could completely tank
an already fragile stock market. “There is room from the Chinese to yield some ground in terms of open markets and
for a negotiated settlement where both sides get to take a victory lap,” said Scott Clemons, chief investment strategist at Brown
Brothers Harriman. “There is a risk that Trump could turn back into Tariff Man and prolong this. But it’s one of the few areas where
the White House could get a big win in the first half of 2019. And if it goes on it’s really going to start hitting people in the
pocketbook.”

Only stock market crashes can cause major depressions---empirical analysis

proves---these collapses are especially prone to cause war
Barro ’17 (Robert J. Barro – PhD in Economics @ Harvard University, Paul M. Warburg Professor
of Economics @ Harvard University, senior fellow of the Hoover Institution of Stanford
University, and a research associate of the National Bureau of Economic Research. José F.Ursúa
– PhD candidate in Economics @ Harvard University, “Stock-market crashes and depressions,”
Research In Economics, Volume 71, Issue 3, September 2017, ScienceDirect)
5. Conclusions and future research
The long-term history for 30 countries indicates that stock-market crashes (cumulative real
returns of –0.25 or worse) have substantial predictive power for depressions (cumulative
macroeconomic declines by 10 percent or more). In a non-war environment, the realization of a
stock-market return of –0.25 or worse implies that the probability of a minor depression
(macroeconomic decline by 10 percent or more) is 22 percent, and the probability of a major
depression (decline by 25 percent or more) is 3 percent. When the stock return is –0.40 or
worse, the corresponding depression probabilities are 30 percent and 4 percent. The
probabilities are 46 percent and 8 percent, respectively, when a stock-market crash of –0.25 or
worse in a non-war period is accompanied by a currency or banking crisis and occurs during a
time of global economic turmoil. Given the stock-market crashes for the United States and other
countries in 2008 (characterized as non-war, featuring a currency or banking crisis, and
occurring during a global event), these last probabilities applied at the beginning of 2009.
The long-term data also show that the majority (67 percent ) of minor, non-war depressions
are accompanied by stock-market crashes, whereas most major , non-war depressions (83
percent) are accompanied by these crashes. Therefore, in the absence of a stock-market
crash , the occurrence of a depression is highly unlikely .
The full history of 3037 annual observations reveals 71 matched cases of stock-market
crashes and depressions, of which 41 percent are associated with war . The years contained in
the 71 cases constitute 12 percent of the overall sample (because the average duration of a
crisis was 4.9 years). The co-movement between stock returns and macroeconomic changes for
the 71 cases may be sufficient to explain the observed equity premium of 7 percent, assuming
that the coefficient of relative risk aversion is between 3.5 and 4. The required coefficient falls to
3.5 or less if we bring in the additional 19 percent of the sample that features a stock-market
crash or depression but not both. A crucial aspect of this analysis is that the computed
covariances allow for a flexible timing pattern between stock returns and macroeconomic
changes. In future research, we plan to assess this flexible covariance approach in more detail.
Part of this research involves the roles of missing data and wartime price controls, which can
distort the covariances calculated from a rigid timing structure.
China IP DA
 No Deal now

Chinese leaders feel miffed by the US– lightzer and trump keep going back and
forth and reneging on deals—tensions are more likely to INCREASE. –that’s
Bryan

No china deal—terrible negotiations, Huawei charges, and unilateral nature

makes it impossible for China to acquiesce
Mitchell 1/30 (Tom, The Financial Times “Commentary: Huawei charges are killing prospects
of a US-China trade deal” https://www.channelnewsasia.com/news/commentary/huawei-
charges-united-states-trump-kill-prospects-us-china-trade-11179242)
BEIJING: Fool Liu He once, shame on you. Fool him twice? How dare you!
Such is the outrage that erupted in Beijing just hours after the Trump administration decided
to issue criminal charges against Huawei Communications and its former chief financial officer,
Meng Wanzhou, on the eve of a possibly make-or-break round of trade negotiations between
the world’s two largest economies.
A PERFECT STORM
Vice Premier Liu, President Xi Jinping’s lead trade negotiator, is due to sit down with US trade
representative Robert Lighthizer on Wednesday for two days of talks aimed at reaching a trade
war settlement by Mar 1.
If an agreement cannot be reached by then, President Donald Trump has said he will more than
double the punitive tariffs currently assessed on about half of all Chinese exports to the US.
The chances of reaching an agreement just got a lot worse , in part because the perfect storm
Mr Liu has just flown into in Washington will bring back bitter memories of his last trip to the
US capital.
BAD MEMORIES
The last time the vice premier was in Washington, in mid-May last year, he and Treasury
secretary Steven Mnuchin both said they had agreed, at least temporarily, not to raise tariffs
on each other’s exports.
Within days of Mr Liu’s arrival back in Beijing, Mr Trump embarrassed him by contradicting
that assertion.
The lack of trust this episode engendered was the main reason Mr Liu waited so long before
agreeing to go back to Washington for substantive trade talks. It will also make it much
harder for him to agree to difficult “structural” economic reforms that Mr Lighthizer is
demanding , but are viewed by Chinese officials as potentially threatening their famously
successful development model.
CATCH-22
US officials argue that their criminal case against Huawei, which erupted when Ms Meng was
detained by Canadian officials late last year, and the trade talks are on two separate tracks and
have nothing to do with each other.
The US did indeed have to formally notify their Canadian officials of their intention to proceed
with Ms Meng’s extradition by the end of the month, which raises the question why either side
thought Jan 30 to 31 was a good time to schedule this critical round of trade negotiations.
Mr Xi, Mr Liu and other senior Chinese officials won’t be inclined to view it as a coincidence. To
them, it is further evidence that a “China hawk” faction in Washington is intent on
constraining Beijing’s emergence as first-rank technological power.
They will also be sorely tempted to walk away from this week’s scheduled talks.
But they also know that would probably kill any hopes of reaching a trade agreement by Mar
1, which is exactly what many China hawks want.

Any Chinese concessions under unilateral tariffs are a smokescreen—they’re an

unenforceable, calculated bet that Trump will just give up
Taylor 1/31 (Adam, University of Manchester, BA in economics with a focus on international
relations; Columbia University Graduate School of Journalism, MA “How Trump’s trade war with
China could heat up” https://www.washingtonpost.com/world/2019/01/31/how-trumps-trade-
war-with-china-could-heat-up/?noredirect=on&utm_term=.63b1da8036fa)
But while there is optimism that resolution may be at hand, there are also indications that
tensions could heat up instead .
The case against Chinese telecom giant Huawei may be the biggest stumbling block . On Monday,
the Justice Department announced criminal charges against the company and one of its top
executives, Meng Wanzhou. The allegations included bank and wire fraud, attempts to violate U.S. sanctions on
Iran and the theft of intellectual property from a rival firm.
There have been concerns about Huawei’s business practices and its links to the Chinese government for years, but even seasoned
China watchers were surprised by the damning details in Monday’s indictment.
“Whatever the outcomes of the cases,” wrote The Post’s Emily Rauhala, “the allegations presented
Monday look sure to shape U.S.-China relations, adding a layer of uncertainty to trade talks
this week and setting a more combative tone for months , if not years, to come.”
The ramifications may go far beyond U.S. courts. Even before the indictments were announced, a number of
countries, including the United States, had banned Huawei from being involved in installing 5G networks, the next generation of
cellphone systems.
“Considering just how patently unethical Huawei looks, money isn’t the only thing it stands to lose — international trust in the
company is eroding already,” wrote Chris Velazco in an article for Engadget that was simply titled: “How screwed is Huawei?”
Steve Dickinson, writing for China Law Blog, suggested the Huawei case is a sign foreign companies and governments are
increasingly unafraid of retaliation if they take action on Chinese intellectual-property theft. “With the deterioration of US-China
relations, this concern seems to be melting away and decades
of pent-up resentment against China’s IP
practices could well spill out in a cascade of claims from the US and the EU and others ,” he wrote.
But that could still be a dangerous tactic . The Chinese response to Meng’s arrest has shown how Beijing is
willing to use its own justice system in diplomatic and trade disputes.
Two well-known Canadians, Michael Kovrig and Michael Spavor, were detained in China shortly
after Meng was taken into custody in Vancouver on Dec. 1; another Canadian was sentenced to death not long after. China has not
yet targeted U.S. citizens, but there’s no guarantee that will last.
Additionally, seemingly positive developments in the U.S.-China trade war may also prove to be
less than they seem. Beijing’s new foreign-investment law is noteworthy, but the speed with
which it is happening could actually work against foreign firms.
“While the current draft responds to some longstanding criticisms from foreign firms, vowing to protect their intellectual-
property rights and ban coerced technology transfers, it contains vague language on national security
reviews, government expropriation and other matters officials could use against foreign firms ,”
the Wall Street Journal’s Chao Deng wrote.
China sees the White House’s demands as a bottomless pit—They won’t
acquiesce
Leonard 1/2 (Jenny, Bloomberg. “U.S. Stays Mum on China Trade Concessions Ahead of
Beijing Talks” https://www.bloomberg.com/news/articles/2019-01-02/u-s-stays-mum-on-china-
trade-concessions-ahead-of-beijing-talks)
“We need structural changes on this fundamental issue of non-economic technology transfer.
It can’t be just vague promises that we’ve seen over the last 25 years,” Lighthizer told CBS’s
Face the Nation on Dec. 9. “There is a long history of having things not work out.”
Chinese officials are voicing a complaint that has accompanied the trade war for months:
They’re not sure what is asked of them and it’s not clear the U.S. side knows what it wants ,
people familiar with the matter said. Officials are planning for alternative retaliatory measures
in case talks collapse, they said. Trump administration officials on the other hand said they
have clearly laid out their demands to Beijing.
“The key obstacle to a deal is whether the U.S. demands are a bottomless pit ,” said Lu Xiang,
an expert in bilateral ties at the state-run Chinese Academy of Social Sciences in Beijing.
According to Kennedy at CSIS, the White House is unlikely to comment on any of China’s
economic announcements before it’s presented with a final package of commitments, and
“Lighthizer’s bar is extremely high .”
“I expect the White House to keep a poker face up until the end. There will be no reassurance
until there is a lot coming,” he said. “The question is how much more will come? We need to
take a wait-and-see approach with a skeptical eye.”
 2AC Tariffs Increase IP Theft
Unilateral Tariffs incentivize IP theft– they deck negotiation, harden China’s
position, and make SCS conflict inevitable
Dollar and Petri 10/5/18 – PHD in Economics, NYU and senior fellow in the John L.
Thornton China Center at the Brookings Institution. Petri has a PHD in Economics from Harvard.
(David and Peter, 10/5/18, “Why it’s time to end the tit-for-tat tariffs in the U.S.-China trade
war” https://www.brookings.edu/blog/order-from-chaos/2018/10/05/why-its-time-to-end-the-
tit-for-tat-tariffs-in-the-u-s-china-trade-war/)
Trade war as a tactic
The rapid, wide-ranging escalation of tariffs in the U.S.-China trade war has no precedent in the years since the Great Depression.
The war began in early 2018 with U.S. tariffs on solar panels and washing machines, and has now escalated to covering $250 billion
of U.S. imports from China (see table below). China, in turn, has imposed tariffs on the bulk of its imports from the United States.
These actions—mostly unilateral and pointedly discriminatory—are almost certainly
inconsistent with World Trade Organization (WTO) rules.
The tariffs applied by the two countries are not “remedies” in the sense of correcting market
distortions , nor are they preventing, say, sharp adjustments in a declining industry. On the contrary, they will
cause dislocations, raise costs, and increase uncertainty . Their value lies in the possibility that they will force
the other side to make concessions, or at least deter it from even worse behavior. If that doesn’t happen— if neither side
capitulates to the other’s demands—the tariffs will prove to be costly, mutual mistakes.
And that seems to be where the U.S.-China trade war is headed. These are large, domestically oriented
economies that depend lightly on each other’s markets, so punitive tariffs have limited macroeconomic effects. The value added in
China’s exports to the United States amounts to about 2 percent of the country’s GDP, down significantly from just a decade ago.
United States exports to China amount to only about 1 percent of GDP. In the short run, these tariffs will subtract only a small
amount from each economy’s growth. Capitulation on either side is very unlikely.
Over time, the costs of these tariffs will grow. The United States is apparently confident in
threatening China because U.S. imports from China exceed U.S. exports to China . But the
asymmetry is illusory; tensions are already spilling into areas where the two countries are
both consequential, including relations on the Korean Peninsula and between the Chinese and
U.S. militaries in the Western Pacific. In these new spheres the potential for mutual damage is
still higher.
Meanwhile, rapid-fire retaliations have all but closed off meaningful negotiations . The real issues,
noted above, are complex and cannot be resolved by tweaking a ready template , such as existing trade
agreements in the case of the South Korea-U.S. free trade deal (KORUS) and the North American Free Trade Agreement
(NAFTA). In mid-September, Chinese and U.S. officials apparently agreed to efforts to launch
negotiations, but were then undermined by President Trump. With capitulation as the only
option, Chinese decision makers halted discussions.
Seeking better results
The self-defeating cycle of tit-for-tar tariff escalation is in neither country’s interest. Even if the
U.S. goal were to disengage—an objective that we think would be wrong—that could be accomplished firmly and with fewer side
effects with widely based tariffs and prohibitions on specific trade and investment flows. And
if the United States does
intend to solve genuine problems, it can suspend punitive tariffs while negotiations make
progress. Current tariffs are hardening positions rather than producing meaningful effects.
They are taxes that make American producers less competitive and ultimately fall on
consumers; they are bound to become unpopular over time.
Avoiding ineffective tariff escalation is not capitulation but smart policy, the first step toward
achieving the goal of disengagement or negotiation. An end to tit-for-tat responses—what the Hudson
Institute’s Herman Kahn described in 1965, for nuclear war, as the “orgiastic spasm of destruction in
which all the buttons are pressed and the commanding officers go home ”—will offer
immediate economic benefits to both sides and improve the climate for negotiation.
Stopping tit-for-tat escalation is beneficial even for a single country. The value of avoiding an “own goal”
–imposing costs on the home economy—is self-evident. In addition, there may well will be advantages for China
from some steps advocated by the United States, but it is hard to pursue these ideas in the
trade war environment. The trade war plays into the hands of those who want to bolster state enterprises and maintain
protectionism. By putting tit-for-tat policies in the rearview mirror, China can focus on long-term priorities. These may include
policies that have little to do with the United States, including the China-led Regional Comprehensive Economic Partnership (RCEP)
and the Belt and Road Initiative, as well as opening sectors to improve China’s competitiveness. Along these lines, China recently cut
tariffs on more than 1,500 products and eased investment restrictions to signal its continued economic opening.
Fruitful agreements between China and United States , however dim they may appear today, are possible.
Many in China recognize that recent trends toward centralization have backfired, and that
continued growth will depend on renewed “opening up” in sectors ranging from financial
services to technology. China can take numerous unilateral steps that will benefit its domestic
economy and be welcomed by Americans.
 2AC Tariffs Wreck US Tech
Tariffs wreck US tech industry – make us less competitive and don’t stop IP
theft
Poletti 10/15/18 – tech journalist at MarketWatch, masters degree at Columbia University
(Therese, “Trump’s tariffs against China are hurting U.S. tech companies instead”
https://www.marketwatch.com/story/trumps-tariffs-against-china-are-hurting-us-tech-
companies-instead-2018-10-11)
The latest tariffs enacted by the Trump administration against China are not expected to help
solve the problem of i ntellectual- p roperty theft from American companies, and instead could hurt U.S.
companies, especially in the technology sector.
When corporate earnings-reporting season begins this week, investors will hear from companies about what kind of impacts they
expect to see or are seeing from the tariffs on $200 billion in Chinese goods, whether on their bottom lines or their overall
businesses. So far, a
few tech companies have begun to warn about issues in the supply chain , the
need to raise prices or take hits to their profits , due to the extra costs that tariffs of initially 10% on a wide-
ranging list of goods.
The tariffs will affect a huge range of products , from baby cribs to printed circuit assemblies, and prices are bound
to rise, unless companies decide to take a hit to their profit margins instead. In the next few weeks, investors will get a better idea of
the impact.
“You are going to see a lot more comments about tariffs,” said Dan Hutcheson, president of VLSI Research Inc. “Here are two ways
tariffs will slow industry growth: Prices
will be raised, and it will create uncertainty . Higher prices across
all goods affected will cause companies to be uncertain about demand for electronics
products in the upcoming holiday season. If they are not confident that the market will be
there, they will hold off buying semiconductors to build inventories for the holidays.”
Some investors believe worries about the U.S.-China trade war are among the reasons that tech stocks
are one of the big contributors to the current market rout this week.
In a survey conducted in mid-September by Blind, an anonymous workplace social network, 75.5% of tech employees responded
negatively to a question about whether the tariffs would be good for business. Many employees were from companies that wrote
letters to the U.S. Trade Representative during the public-comment period about how the tariffs would be bad for their companies
and tech innovation, such as Apple Inc. AAPL, -0.10% AAPL, -0.10% AAPL, -0.10% , Cisco Systems Inc. CSCO, -0.37% and Intel Corp.
INTC, -0.02% .
Already, a few tech companies have made cautionary comments about the impact. Memory-chip maker
Micron Technology Inc. MU, +0.10% warned that its profit margins will take a slight hit due to the tariffs on Chinese goods. The
Boise, Idaho–based company has an assembly plant in China where its memory modules are assembled.
Last week, at its annual meeting with analysts, HP Inc. HPQ, +0.29% said that it included the impact of the tariffs in its forecast.
“We’re expecting a gross headwind before mitigations,” HP Chief Financial Officer Steven Fieler said. “However, we’ve been actively
working mitigation plans to anticipate the net headwind to decline throughout [fiscal] 2019 as our strategies take full effect.”
An HP spokeswoman said the company will “continue to manage” but did not expand on that remark.
“Mitigation” is likely a reference to price increases . Price hikes, especially if they come around
the holiday shopping season, could backfire with consumers looking at consumer electronics
as a gift idea. Another mitigation option could be moving some manufacturing or assembly facilities.
With the tariffs, the U.S. appears to be trying to punish China for some of its trade policies, such as forcing
U.S. companies to share some intellectual property, so-called forced technology transfers, in exchange for
gaining access to the Chinese market, the world’s largest market. “Rather than hitting the administration’s
intended target — Chinese firms that may have unfairly obtained American technology — the proposed tariffs
would actually inflict damage on U.S. high-technology sectors ,” wrote Mary Lovely and Yang Liang of the
Peterson Institute for International Economics in a policy brief this year.
Venezuela DA
 2AC No Lashout
No lash out—North Korea, Mueller Probe, and Cohen investigation all disprove
Collinson 18 (Stephen, 7/23/18, a reporter for CNN politics covering the White House.
"Rattled or frustrated, Trump is lashing out all over."
https://www.cnn.com/2018/07/23/politics/donald-trump-russia-vladimir-putin-robert-mueller-
cohen-north-korea/index.html)
President Donald Trump is lashing out in all directions as the fallout from his summit with Vladimir
Putin becomes ever more toxic, the Russia investigation grinds on with no end in sight, and
his frustration boils over on a lack of progress on North Korea.
The tensions reached a new level Sunday night when the President issued an all-caps threat
against Iranian President Hassan Rouhani, who had warned the US that war with Tehran would be
the " mother of all wars ." Trump tweeted that Iran would "suffer consequences the likes of
which few throughout history have ever suffered before" if its government again threatened the US,
immediately ratcheting up tensions.
Exacerbating a sense of a White House under siege is the President's full-out assault on his
former lawyer Michael Cohen, who recorded a conversation with Trump about a payment to a former Playboy model who alleges
she had an affair with the former real estate tycoon before he entered politics.
The controversies raging around the Oval Office underline how the President is increasingly
taking control of his own defense and is willing to dictate high-risk political and legal
strategies. But his incessant and often false attacks on special counsel Robert Mueller's investigation also give
the impression of someone who fears its ultimate conclusions and is unsettled that his fate may be out of
his hands.
The most surreal aspect of the latest lurches of this unparalleled presidency is the intensifying public debate
over the once implausible idea that the President of the United States is compromised by a
hostile foreign power.
But Trump is vehemently defending the summit in Helsinki, Finland, seven days ago as a great success, despite
lingering mystery over what went on in his private one-on-one meeting with Putin and amid uproar over his invitation to the Russian
leader for a second summit at the White House.
He is also facing increasing scrutiny about the results of another major summit: his encounter
with North Korean leader Kim Jong Un in Singapore last month, which ended with Trump declaring he had solved the
isolated nation's nuclear threat.
Since then, Pyongyang has returned to its characteristic strategy of diplomatic obfuscation and
delay. The Washington Post reported Sunday that despite publicly talking up the success of the summit, Trump was
fuming to aides in private that there had not been more dramatic steps forward in denuclearizing the Korean Peninsula.
 2AC No Defectors

hardcore Trumpists will never defect---AND, media shields.

Kevin Drum 18. Political blogger for Mother Jones. 4-2-2018. "Why isn't Donald Trump polling at
0%?," Mother Jones. https://www.motherjones.com/kevin-drum/2018/04/why-isnt-donald-
trump-polling-at-0/
Nancy LeTourneau asks the eternal question: is there any amount of fuckuppery that will cause
Donald Trump’s supporters to abandon him? There will always be the hardcore support for
Trump—that can be expected in a country as large and diverse as the United States. But the
fact that Trump’s approval rating continues to hover in the 40 percent range is appalling. Is
there anything that could chip away at that? I see both good news and bad news on that front.
When it comes to good news, the one frame of reference for me is that my father, a staunch
conservative Republican, continued his support for Richard Nixon through all of the revelations
about his lies, corruption and obstruction of justice. In the end, dad finally abandoned him when
the Oval Office tapes were published in book form because he couldn’t abide the frequency with
which the president swore. Holy hell. This is the good news? That even historically insane
levels of corruption and abuse of power aren’t likely to move the Republican base ? Of
course, this isn’t much of a surprise, especially these days. As LeTourneau points out (this is the
bad news), conservative media mostly shields Trump’s base from even knowing about this
stuff in the first place. But I’m not sure that’s really crucial anyway, since it affects only the
hardcore Republican base, and that isn’t enough to keep Trump in office. The question is why
Trump retains substantial support even from centrist conservatives. For now, I think the answer
is this: nothing much has gone wrong . What I mean by this is that despite the endless wailing
of liberals like me, your average Republican voter hasn’t really seen anything falling apart .
They still have jobs . Their 401(k) accounts are doing fine . North Korea is coming to the
negotiating table. The Middle East is the same as always. Global warming continues to seem
like no big deal. We’re sticking it to China. On TV Trump seemed pretty reasonable about both
guns and immigration, so it’s not his fault that nothing is happening o

n those fronts. And look: for people who are right of center and don’t eat and breathe politics,
this is a perfectly sensible worldview . Sure, maybe these folks would prefer that Trump tone
down the rhetoric and lay off the tweets, but at least his heart is in the right place. Why not
give his policies a chance? That said, Trump’s support has fallen over the past year: since his
inauguration, Gallup has him down 6 points; 538 has him down 3.4 points; and Pollster has him
down 2.4 points:
Modern American politics is played at the margins. It takes a lot to move voters by as much as
5-10 percent, especially when the economy is doing well. Right now, it looks like there’s a
good chance of a huge blue wave in the November midterms even though the economy is
growing and unemployment is low, and that says a lot . Trump’s support is more fragile than
it seems at first glance.
Mouffe K
 2AC AT Cap Collapsing Now
Cap sustainable, no movements now, and perm do both solves best
Cap “collapsing” doesn’t mean it’s gone tomorrow – might take hundreds of years – we need a
strategy for the intermediate period
Calhoun 16 (Craig, Director of the London School of Economics and Political Science, “The
future of capitalism,” Socio-Economic Review, 2016, Vol. 14, No. 1)
Does capitalism have a future? Of course , it does. But it is not necessarily pretty. Wealth can be generated in
evermore extensive and intensive ways even in a world full of crises and challenges. And because
capitalism is the dominant economic system in the world, it could continue to contribute to climate change,
conflict, inequality and instability. But this does not mean it will collapse. The USSR collapsed
as a state following a long period of stagnant growth and expensive arms race. This was bracing,

perhaps a warning to other states, but not necessarily a model for the end of capitalism.

Much critical engagement with capitalism has focused on its internal contradictions and potential
collapse. Contradictions are real and collapse is possible, but the language is misleading. We speak of the
collapse of the Roman Empire, but this took 300 years of decline, instability and conflict. We speak of the collapse
of feudalism, but it would again be more accurate to see a long process of transformation as feudal structures were less able
to organize social, economic and even military life, and less able to reproduce key elements of their power structure while gradually states and what we
now call capitalism grew. Capitalism has already proved that although it is prone to generating crises, it is not merely a short episode between
feudalism and socialism, as the Communist Manifesto implied. It has
endured much longer than Marx and Engels
thought, and along with the nation-state system dominated global geopolitics and economics for some 400 years. It may well last
much longer—but this continued existence could be marked by both growing systemic diffi- culties internal to capitalism and upheavals beyond
capitalism that are exacerbated by it and pose challenges to it.
Capitalism is more than just markets or economics in general. It is a system of production based on
ever more intensive deployment of capital and pursuit of productivity (and profit)— and hence a driver of
both expansion and technological and organizational innovation. It is a system of relations between states and other economic actors in which states
guarantee forms of property, security of contract and regimes of accumulation. Together these make it a system that drives not only expansion, but
also accumulation and concentration of capital.
But capitalism is not always the same. In the first place, it always exists in social and political
contexts, not in a ‘pure’, abstract form. In the real world, capitalism is always shaped by state support,
regulation and mediation of conflicts; states may carry the costs of capitalism’s negative externalities. In addition, capitalism’s
internal character varies. Of most immediate importance, since the 1970s, capitalism has seen a dramatic ascendancy of both finance and service work.
Industry has not disappeared any more than land lost all value during the industrial revolution. But where perhaps a quarter of capital was held in the
form of financial assets 40 years ago, the figure now is about three-quarters. There has been similar proportionate growth in service employment.
There may yet be a productivity revolution in service work— though in what proportion that will bring freedom and
opportunity ( probably only for an elite) or only low wages and unemployment (for the rest of us) remains to be seen. The claim that we are moving
into a ‘sharing economy’ points to some new developments, but fails to address basic structural dimensions of capitalism.
To be sure, there is also variation in the forms of enterprise. The development, expansion and international spread of corporations have been remarkable innovations. Corporations may be organized through legal
fictions—as artificial persons ‘without a soul to damn or body to kick’—but also as basic social institutions. Firms are almost as important as states. So ubiquitous are corporations (even though legal regimes vary)
that it is now hard to recall capitalism before corporate capitalism. More recently, however, corporations have themselves have become commodities bought and sold. From IPOs to mergers and acquisitions, this
has enriched financial institutions. It has also made both capital markets and labour markets less stable. And it has brought a real cost in social solidarity. This is shaped by a decline in longterm employment,
undermining of ties between firms and their localities, and financial pressures—ever more intensive and short-term—against the provision of health care, pension and other benefits to employees.
Likewise, capitalism in any one time or place may be shaped more or less by entrepreneurs and the formation of new enterprises. Entrepreneurs were crucial to the rise of merchant capitalism and in the industrial
revolution. They were important in the ‘gilded age’, not just among the robber barons but also in launching a host of family businesses. And entrepreneurs played a central role in the rise of new industries in the
last 40 years. There should be appreciation for the creative, enterprising spirit of entrepreneurs. But we should not be blinded by either the hagiography of individuals or the celebration of entrepreneurship in
general to think that entrepreneurial successes are quite as individualistic as the ideology suggests. Entrepreneurs depend on social networks and whole ecologies of support from universities to venture
capitalists. Much of the achievement of technology firms in the last 40 years has been grounded in commercializing scientific advances that were funded by governments during the cold war—and then, quite
remarkably, made publicly available with no claim to property rights by the government on behalf of citizens.
The term entrepreneur can be used so elastically as to encompass both those acquiring great fortunes by building companies in Silicon Valley and those working at a near subsistence level as contractors in new
service economy businesses—like drivers organized through online booking agencies. Typically paid a fee for each service, these are entrepreneurs only in the same sense that ‘independent’ knitters and weavers
were during the industrial revolution. As mechanization of spinning and expansion of markets drove up demand, knitters set up shop in their own homes, often enlisting family members as assistants. They
provided their own equipment, sometimes bought on credit, including knitting frames (machines that were human-powered but able to produce much more than simple handwork). They sold their work to
intermediaries who ran ‘putting out’ businesses, distributing thread to knitters and collecting finished cloth. As intermediaries, these were arguably the 18th and early 19th century counterparts to Uber and other
firms organizing services through ‘apps’. Framework knitting was initially a good occupation, requiring only modest skill though intense concentration and physical labour. But it was an easy business to enter and
knitters were eventually driven to work longer and longer hours both to repay their capital costs and to support their families. The creators of self-exploiting tiny businesses, more stable small businesses and
‘start-ups’ that might grow with venture capital and successful public offerings are all important. However, lumping them under the single term ‘entrepreneurs’ can be misleading as can an overly rosy picture of
the ‘sharing economy’.
Not least of all, states may themselves pursue capitalist ends like expansion of markets and accumulation of capital. They may either own capitalist
firms or actively try to manage capitalist enterprise and finance. Even countries in which liberal capitalist separation of state from market was
celebrated have used such models. The US accomplished projects like rural electrification partly through state-owned enterprises and partly through
preferential financing and state-guaranteed monopolies. Railroads that were initially private ventures were in many countries consolidated as public
service companies. Only rarely was there clarity about whether to run them as for-profit firms (thus subsidized the state) or as services funded partly by
the state. Still, they demanded investment and generally became more capital-intensive. More strikingly, the Soviet Union was arguably as much an
example of state capitalism as of socialism. And today, China is arguably the model for a capitalist future in which the boundary between state and
economy is not celebrated—as it has been in the ideology of liberal capitalism. State-related enterprises and direct state organization of finance may be
as basic to the near-term future of capitalism as, say, entrepreneurs.
Still, capitalism works. Certainly it only works more or less, and not always as well or in the ways we might wish. But
it works well enough that it need not reach an end at any specific point. It is a good bet that it will still

dominate global economics tomorrow, next year, and when the next crisis comes. But, capitalism is
not an order of nature. It is a humanly created historical system. So, it will change

. It will likely end, change beyond recognition or continue to exist. It will almost certainly lose its capacity to dominate.
Capitalism is good at some things, not others, and actively bad at some. It is good at creating wealth and driving
innovation, indeed extraordinarily good. Even Marx and Engels praised capitalism for this (though
they thought it was important at some point to say ‘we have enough, let’s concentrate on how wealth is shared’). Capitalism’s capacity to create wealth
is why less developed countries are betting on it today. But by comparison, capitalism is bad at equitable distribution. It is not
necessarily worse than all other systems: feudalism and slave societies are hardly models of equitable distribution of wealth. But arguably because
capitalism depends on consumer markets it needs distribution of wealth to survive. It thus operates in an uneasy (or outright denied) collusion with
trade unions and other mechanisms that increase returns to labour and with states that ensure some levels of distribution of wealth. High employment
industries may make distribution of wealth (and thus funding of consumer markets) easier; the erosion of industrial employment makes this harder, at
least temporarily.
Of course, capitalism’s extraordinary ability to generate wealth is not counterbalanced only by problems of distribution. Capitalism also produces the
opposite of wealth—which is not poverty but what John Ruskin called ‘illth’. Illth is bad stuff: accumulation of waste, pollution of air and water and
even climate change offer good examples. But so do erosions of social solidarity and mutual support systems. States often step in to
deal with illth and other negative externalities of capitalism. This is what Karl Polanyi analysed as the ‘double-
movement’ of capitalism that led to the rise of the welfare-state. There are also market-based solutions, however, like insurance companies. And
philanthropy is also sometimes important, channelling privately accumulated capital to public purposes. But one way or another, illth and negative
externalities demand attention.
So, what challenges capitalism now?
There is still risk—indeed high probability—of systemic financial crises. Addicted to finance and growth, the world continues
to hope that the source of so much recent upheaval can become the source of salvation from it. The dominance of finance in contemporary capitalism
ties every country into a global system that has risks built into its very architecture.
Some apparent solutions—like the spreading of risk through markets for derivatives—create new and intensified risks. So far, ‘financial engineering’ has
helped create great fortunes but it has not produced the equivalent of bridges that do not collapse. And when financial crises have come, the prevailing
pattern of response is to turn private problems into public ones— for example by nationalizing the toxic assets of failing banks. And yet we do not know
what to do except invest.
Risk can be mitigated, though this depends on both good analyses and organizational will. Financial markets, instruments and contractual agreements are extraordinarily complex. Unfortunately, the financial system is poorly understood even though it is the product
and object of brilliant research. This reflects not just complexity, but the extent to which the study of finance is bound up with the production of ‘financial engineering’ products that can actually work in practice. For example, unrealistic assumptions like unlimited
liquidity are embedded into algorithms that price derivatives (and indeed to some extent organize derivatives markets). This is not an error; it is a way of accomplishing effective pricing—except in those times where liquidity limits do become significant, in which
cases the system is prone to crisis.
Both the complexity of the global financial system and its systemic risk are increased by organizational factors. The system is not the product of some moment of rational planning. It grew by accretion and incremental if rapid change. Different actors set out to solve
different problems: expanding mortgage availability to expand home ownership, for example, or attracting funding to new business ventures, or building transportation and communication infrastructures. These are organized through different firms and government
agencies. There is innovation in law (derivatives are contracts) as well as in finance per se, so different professions are involved with their different perspectives. The development of regulation usually lags, but so does the development of organizational competence
even in private firms. Senior executives may not have full understanding of what subordinates—say traders—are doing and how it creates risks. ‘Silos’ separate different functions within firms, for example, and give different knowledge and incentives to traders, risk
officers and general managers.
The risk is also exacerbated when international regulation and risk management is weak. This can also be a problem of inadequate understanding (and inadequate access to information, which is largely in the hands of firms with proprietary interests in it). But there
is a deeper problem. International cooperation is weak on a number of different dimensions and policy areas, even while it is as crucial as ever. The financial crisis showed how difficult it was to generate effective cooperation for changes to financial processes, not
just at the global level but even within Europe—which found its institutions unexpectedly inadequate even after decades of development. The Bretton Woods institutions face new challenges, including a proliferation of alternative mediators of global finance from
the BRICs bank to the Asian Infrastructure Investment Bank led by China and the US development of alternative regional trade agreements. But insufficient international cooperation in finance is mirrored by weaknesses in other areas: refugee and security policies
are notable examples at the moment. In any case, difficulty organizing effective and efficient regulation and support institutions for global finance multiplies risks. But the risks do not just concern financial collapse. They concern the possibility that no solutions will be
found to paying for the costs externalized by capitalist firms.
Another challenge for capitalism, also made evident in the financial crisis, is the huge scale of what we might call ‘unofficial capitalism’. This is wealth and flows of wealth that are unrecorded or incompletely recorded, and perhaps more importantly unregulated or
ineffectively regulated. Some of this derives from organized crime, including trafficking in drugs, arms and people. But some of it derives simply from tax evasion. Whatever the provenance of illicit capital, it amounts to trillions of euros trading in dark or at least
obscure markets, and sometimes mingling with more legitimate capitalism in destabilizing ways. The flow of Russian money into Cyprus before the crisis of 2012–2013 was an example. Of course, unofficial economic activity helped many people survived financial
crisis and austerity policies. There are relatively benign, small-scale forms of off-the-books enterprise in certain businesses and ‘alternative economies’. Even these, however, deprive states of revenues that could be used to finance social expenditure. The impact of
large-scale illicit capitalism is much greater.
Diversion of funds into illicit capitalism and weak international cooperation are both factors in widespread destruction of the political and social conditions for capitalism. Even more basically, this is driven by financial capitalism itself and accompanying market
fundamentalist ideology. There has been a weakening of welfare states. This is often a matter of explicit state policy. Privatization may be driven by pro-market views, but also by criticism of inefficiencies in actual bureaucracies. It is also often driven by state fiscal
challenges, which are in turn shaped by difficulty collecting taxes (not least where it is easy for money to flow across borders). Another way of looking at this is that it costs a lot of money to deal with capitalism’s externalities. There are the costs of coping with illth,
and there are the costs of providing education, health care, unemployment benefits and community services that not only sustain national populations and thus stabilize society, but also lower costs to capitalist firms—e.g., of skilled and healthy workers.
The weakening of welfare states is only one example of much more pervasive institutional deficits. Corporations themselves can be important social
institutions that provide their members with what amount to welfare benefits and even some sense of community. But long-term corporate
employment and benefit structures are in decline, subjected to shortterm financial market pressures influenced by the ideology of ‘shareholder value’.
In other words, institutions of basic social importance are being made responsive only to one class of interests—those of investors. Assertions of value
for other stakeholders are generally less effective. Other directly economic factors also challenge capitalism, such as unemployment, inequality and
slow (or negative) growth. These are potentially disruptive to the capacity to realize profits, but also to social solidarity.
At the same time, we should not underestimate how hard people try to make existing systems work ,
to find their way to enough material resources and social integration for their own lives. They do this in part by continuing to
participate in capitalist system. It is a source of frustration for many, though they do not always identify their personal problems
with this systemic source. It also a widespread source of hope—not least in many poorer and developing countries. People continue to seek jobs and
start businesses. And this is a matter of emotional attachments as well as economic practicality.
To those optimistic about revolutions , I would stress that these do not often turn out very well. In addition, one

distinctive feature of the recent and in some ways continuing financial crisis has been the near-absence of
anti-systemic movements. There have been occupations of public spaces, though these have been focused more
on failures of government and power of global finance than on capitalism as such. There are populists on
both Left and Right, but almost no real socialist mobilization. There are remarkable experiments in
local-level alternative economies of barter and mutual support. But there are not large-scale movements
for truly transcending capitalism and replacing it by an alternative scalable economic system.
So, what could happen?
Well, yes, capitalism could collapse. If this happens, purely economic calamity will likely be entwined with war and environmental disaster. If any
historians survive this apocalypse, they will argue over whether capitalism caused the catastrophe, or only exacerbated other problems like climate
change failures of international cooperation or decline in social solidarity. There could also be technological or other innovation that reinvigorates
aspects of capitalism and deals with some of its costly externalities. Opportunities for expansion of capitalism’s reach are shrinking as it reaches the
whole world. Still, there could be indefinite continued intensification.
The liberal hope that capitalism and democracy are somehow naturally linked is likely to be proven specious. Capitalist democracies may persist, but
more state-authoritarian versions of capitalism are at least as likely to prosper. Global integration will not bring homogeneity, but diversity of political,
economic and social arrangements.
Governments will attempt to compensate for problems created by capitalist development. This
may bring aspects of Polanyi’s double movement, but probably not a renewal of the welfare state project—and ( perhaps ironically) particularly not in
democratic states. How much states can do and how well will depend on how they are linked in international cooperation, at regional as well as global
levels. In any case, though, it is important to look at whether compensation for illth and positive virtues of solidarity may be produced in other ways,
including in business institutions, philanthropy and social entrepreneurship.
Small achievements in mitigating problems are worth the effort and worth cherishing. But neither
reducing inequality nor stemming climate change is easy, and neither is likely without trade-offs with freedom or growth.
What seems very unlikely is a pure collapse or revolutionary transformation creating
socialism. If capitalism is to be replaced by a new dominant economic form, this is likely to
come about through a prolonged period of ambiguity , difficulty and conflict. The end of capitalism
may be more like the end of the Roman Empire or of feudalism than like the end of the Soviet Union. In
this context, creating and defending islands of civility, solidarity and relative social justice may be a challenging but crucial project.
 2AC – Trade Good – Environment
Trade decreases emissions – cleaner tech (yellow)
Irwin 15 – economics professor at Dartmouth, research associate of the National Bureau of
Economic Research, former staff of the President’s Council of Economic Advisers (Douglas A.,
Free Trade Under Fire, fourth edition, pgs. 65-67, Princeton University Press, 2015,
http://press.princeton.edu/titles/10486.html)
Fortunately, the objectives of free trade and a cleaner environment often work together . For
example, numerous studies have traced the re- lationship between pollution emissions and a
country’s per capita in- come. They have generally found a relationship shaped like an
inverted U : as per capita incomes rise from low levels, pollution increases, but beyond a certain point (about
$5,000), further increases in income tend to diminish pollution .70 The initial increase in pollution is due to
industri- alization, while the decrease is due to cleaner production technologies and more effective
environmental regulation that come with higher in- comes. Both Delhi and New York City have traffic jams,
for example, but the locally made cars and scooters in developing countries tend to belch out worse fumes than those with cleaner
exhaust systems in the United States.
Beyond the threshold, higher incomes do not mean more pollution and lower incomes do not mean less pollution. To the extent that
trade increases a country’s income beyond the turning point in the inverted U relationship, it helps indirectly to improve the
environment. More directly, new
technology is cleaner technology and trade facilitates the diffusion of
new technology. Furthermore, the “dirty industry migration” hypothe- sis, that polluting
industries will move to developing countries where environmental regulations are lax, has
received little empirical support. There is no “race to the bottom” in environmental standards
because the costs of abating pollution are not a significant determinant of industries’
location, and consequently not a significant determinant of trade flows.71 One important
study examined three channels by which trade can af- fect sulfur dioxide (SO2) emissions : the
scale effect (increases in eco- nomic activity increase SO2 emissions), the technique effect (increases in income lead to cleaner
production methods and reduce emissions), and the composition effect (trade alters the composition of activity and hence the
average pollution intensity of national output). The
authors were surprised to conclude that free trade is
good for the environment be- cause, as an empirical matter, the technique effect outweighs
the scale and composition effects.72 The effect of income growth on pollution de- pends
largely on the underlying source of growth: growth achieved through capital accumulation
tends to raise pollutants, while growth achieved by trade and technological change appears
to reduce pollutants . This could also account for the inverted-U-shaped relationship of pollution to income—developing
countries initially tend to achieve growth through (dirtier) capital accumulation, whereas growth in devel- oped countries is based on
human capital accumulation and technology (cleaner methods).
Another study focused on the issue of causality in estimating the effect of trade on the
environment for a given level of income.73 This study looked at the links between trade and
seven measures of environmental quality and found that trade had a strongly beneficial
impact in reducing SO2 emissions, and a less significant but still positive impact in reducing
NO2 emissions and total suspended particulate matter. Trade also reduced energy depletion
and increased access to clean water , while having no impact on deforestation . The one exception
was CO2 emissions, where increased openness was related to greater emissions, perhaps because of the free-rider problem afflicting
countries that seek to limit greenhouse gas emissions. But the study found no evidence for a “race to the
bottom” in environmental standards or the “pollution haven” hypothesis , in which trade encourages
some countries to specialize in dirtier industries. In terms of the United States, real manufacturing output
has increased by more than 70 percent over the past thirty years, while pollution emis- sions
have fallen significantly (ranging from 30 percent for nitrogen ox- ides to 66 percent for sulfur dioxides). The United States
even reduced its carbon dioxide emissions from energy sources by 12 percent between 2005 and 2012, although those emissions
rose 2 percent in 2013. Most
of this overall decline is due to improved production technology or
abate- ment processes, not importing dirtier products from abroad to avoid domestic
regulation. Indeed, the average pollution content of U.S. im- ports has fallen over time, and the United States does not seem to
have been offshoring pollution by importing polluting goods.74

Legal reform is possible

Bannan ‘16 (Natasha Lycia Ora, president of the National Lawyers Guild, second youngest
president in the Guild’s history and its first Latina. She is also Associate Counsel at LatinoJustice
PRLDEF, a national civil rights organization that advocates and litigates on behalf of Latinos
experiencing discrimination and systemic exploitation, “BUILDING ON 80 YEARS OF RADICAL
LAWYERING IN THE AGE OF TRUMP,” 73 Nat'l Law. Guild Rev. 189)
Eighty years from now, when future generations look back at the Trump candidacy and presidency and
reflect on how institutions responded to the spread of neo-fascism and the attack on fundamental rights, I am
confident that the Guild will stand out as a clear example of what social justice lawyering means. We
will have stood with those who refused to be silent or complicit in state-sanctioned oppression. We
have been doing this since our founding in 1937. For eight decades we have defended social justice movements and
protected constitutional and human rights fearlessly in the face of tyranny and state violence. The advent of the Trump
administration will only mean a rededication and continuation of our work -perhaps in ways we did not
expect, but that we are prepared for.
The election of Donald J. Trump
brought to light some tendencies in our national fabric many of us
thought had been driven deep underground. For veteran Guild lawyers and activists, the 2016 election
environment hearkened back to the days of McCarthyism , when constitutionally-protected speech questioning U.S.
policies or expressing sympathy with groups and individuals targeted by the government could be branded as "un-American" and
lead to prison. Others were reminded ofthe '60s, when anti-war protestors and draft resisters refused to
fight in an unjust war because they believed in peace and an alternative political model, while our government
deemed them a threat to "democracy." Each of these eras of repression from the last century were
backed by our legal system. It comes as no surprise then that, in response to Trump's racist, sexist,
homophobic, and Islamophobic speeches , as well as his initial moves to consolidate his power, Guild
members have begun to draw upon these past experiences.
As an anti-racist organization, we have long fought white supremacy and the laws and policies
it engenders, regardless of who occupies the White House. We have called out the folly of
trickle-down economics used as an excuse to eliminate social protections. We have fought against
militarism , the expansion of empire, drone strikes, targeted assassinations , CIA black sites, and
torture. We have pushed back against the war on drugs and its destructive effects on either side of the U.S.-
Mexico border. We have challenged the surveillance and harassment of other countries' socially
progressive movements. We continue to challenge in the courts ( and in the streets ) the
unlawful concentration of power into the executive branch of government. In essence, we've been
fighting Trumpism, before the term was coined, since 1937.
Because of our history, we will be ready to challenge this administration even before its threats and rhetoric become policy. We will
continue to challenge the normalization of racism and sexism in the public arena. Trump has called the largest group of people of
color in this country, Latinos, "rapists" and "criminals." He has questioned the ability of a federal judge to adjudicate a case in which
he was a defendant because of the judge's ethnicity. He has bragged about sexually assaulting women. And yet his language-
regardless of how insulting, degrading, or hostile-has always been framed as American patriotism. For Trump, anyone who disagrees
with him is "un-American." In this way, Trump has tapped into dangerous sentiments that have erupted periodically throughout this
country's history. These reactionary sentiments, rooted largely in the ideologies of white supremacy, xenophobia, and patri- archy,
are still felt every day in communities across the country.
We see the structural racism Trump embraces and seeks to exacerbate in the widespread police
occupation and violence against communities of color , in the detention of immigrant families ,
in the warrantless wiretapping and surveillance of Arab and Muslim communities , in the over-
regulation of poor citizens and in the under-regulation of corporations. While shocking to some, the signs
of what is coming are no surprise to the many Guild members who represent, or are
themselves part of, these over-policed and under-resourced communities , particularly communities of
color. Economic and state violence has always operated in these communities, and we have
always been ready to challenge the unregulated exercise of state and corporate power. And we
are ready now.
The promise to "Make America Great Again" is the language of imperialism and war. It is language that sends chilling signals to who
may be targeted by a Trump administration. Once we clearly identify the "us" against "them," any variations on dictated behavior
and conduct can lead to harassment, discrimination, abuse, torture and aggression against other nations and peoples. We will
be called upon to defend these communities in the streets, courtrooms, schools , ch

urches, homes, and community centers. Our mass defense work, for which we have become renowned over the past decade, must
and will be prepared to respond to the potential criminalization of dissent, speech, and assembly, all of which are basic rights
guaranteed by the First Amendment.
The imperialist and racist campaign promise to "Make America Great Again ," clearly implies who the
country is intended to be "great" for, as well as who will continue to be exploited, harassed, detained, and criminalized in their labor
and in their lives. If
transformed into policy, this promise will forcibly remove many immigrants who
work low-wage jobs in often abusive conditions. Workers, regardless of their immigration status, will continue to
be exploited as attacks on labor rights escalate, while the drive to concentrate wealth in the
hands of a few will become official domestic and foreign policy. Anti-immigrant rhetoric will heighten the
prejudice and fear in vulnerable communities in order to redirect their justifiable frustration with their eco- nomic position, lack of
opportunities, and an unresponsive political system towards scapegoats. They will take their anger out on those "others."
The Guild is prepared for the incoming administration because we were there during the Second Red Scare. During this period,
when anti-communist hysteria peaked and spread its tentacles into all sectors of society, Guild members
represented those most directly and famously under attack- the Hollywood Ten, the Rosenbergs, the
leaders of the Communist Party, Paul Robeson , and many more. We also defended thousands of
others suspected of "anti-American activities." This work led to the Guild being labeled
"subversive" by the House Committee on Un-American Activities. The heart and character of our organization has been tested
as no other legal organization's has. Our commitment to defending First Amendment freedoms still informs the work of our
organization today-work that will undoubtedly continue as attacks to our fundamental freedoms and rights only intensify.
Trump has shown that he demands the full allegiance of those around him. When it is not given he resorts to disparaging,
humiliating, bullying or worse. He relishes personal attacks and deploys them, however false, at the slightest provocation. He has
used social media to publicly malign art- ists, journalists, and activists who've shown the temerity to disagree with him. He has
misused the courts to sue those who criticize him in an effort to silence opposing voices. He has threatened to jail protestors-
violating a basic tenet of dissent and democracy and a founding principle of our country that the Guild has fought to preserve for 80
years.
Trump's actions and rhetoric foreshadow an effort to privatize public services and facilitate
the corporate takeover of government. The Guild has long recognized that neither democracy nor social
justice is possible anywhere where dramatic economic stratification exists. His threats to cut the
social safety net for millions of people, to roll back labor protections, and to make it harder to earn a living wage threaten
democracy and violate core principles of international human rights laws that the Guild has long supported. The Guild's new Human
Rights Framework Project will be working across committees and chapters to educate members on how to hold the United States
accountable for violating its legal obligation to promote economic and human rights abroad while never violating them
at home.
The tactic of the Trump administration to rule based on fear, domination, power, and privilege
is something we've seen before. We've fought against politicians , here and abroad , who have
deemed themselves unaccountable to anyone but themselves. Challenging unchecked presidential
power and its inevitable abuses is at the core of the Guild's long history of international solidarity
work, especially in countries and regions where the United States has intervened militarily and
economically to prop up oppressive regimes, finance coups, and install dictators. We are familiar
with with the hand of the state in silencing dissenting voices and squashing opposition through the violent tactics of state
We've fought alongside the Occupy movement and #BlackLivesMatter . We've
repression, here and abroad.
Puerto Rico and defended Water Protectors in Standing Rock ,
represented independentistas and freedom fighters in
North Dakota. We are prepared to work with our social justice allies around the world to challenge
any efforts to reach beyond the constitutional limits of the Executive branch or use state
resources to sup- press, repress, punish, isolate, humiliate, or torture those who refuse to stay
silent in the face of a government hostile to the genuine democracy we seek to promote.
As unprecedented as this election is, the National Lawyers Guild has withstood 80 years of attempted repression, surveillance, wars,
attacks on social services, state-sanctioned or -administered violence, imprisonment and political persecution. Guild members have
The political and legal landscape
a deep history of resistance to draw upon. Many of our elders remain to guide us.
may shift, but as movement lawyers, law students, and legal workers, we will not relent in
our defense of fundamental rights nor in the pursuit of a righteous justice.
We will undoubtedly be called upon to think more expansively and creatively about our work.
We will need to look beyond the courts for remedies , as well as to the international community, to
organizing and people's tribunals and to legislative strategies . Perhaps we'll need to look at economic
boycotts, technological support, at funding our work differently, building new alliances, and finding new leaders. But, whatever
happens, this much is certain: we will be called upon and, as the people's advocates, we will show up,
as we always have. There is no doubt that there are trying times ahead and our communities will be attacked in a myriad of
ways. But we will prevail and we will do so under a united and expanded front. As dif- ficult as the years ahead will be, !venceremos!