Back in mid-October, USTR asked the ITC to carry out a two-part investigation of the distributional effects of goods and services trade and trade policy. The ITC just announced that it would undertake this investigation. The Notice of Investigation is here.
There has been a lot of good economic literature on the impact of recent U.S. protectionist measures. For the most part, the ones I've seen weren't designed to look at distributional effects, but I'm sure they could be adapted to do so.
The ITC's full explanation in its announcement was as follows:
The U.S. International Trade Commission (USITC) is undertaking a two-part investigation that will catalog existing information and develop new research and analysis capabilities to better identify and measure the potential distributional effects of U.S. trade and trade policy on U.S. workers, including by skill, wage and salary level, gender, race/ethnicity, age, and income level, especially as they affect under-represented and under-served communities.
The investigation, Distributional Effects of Trade and Trade Policy on U.S. Workers, was requested by the U.S. Trade Representative (USTR) in a letter received on October 14, 2021.
As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will provide a two-part response to the USTR.
Part 1: Public Report
The USITC will prepare a public report that catalogs information on the distributional effects of trade and trade policy on under-represented and under-served communities. The report will:
- include information gathered through roundtable discussions among representatives of under-represented and under-served communities that have been identified in the Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, as well as think tanks; academics and researchers; unions; state and local governments; non-federal governmental entities; civil society experts; community-based stakeholders, such as minority-owned businesses; business incubators; Historically Black College and Universities (HBCUs); Hispanic Serving Institutions (HSIs); Tribal Colleges and Universities (TCUs); other minority-serving institutions (MSIs); and local and national civil rights organizations;
- include information gathered through a symposium focused on academic or similar research on the distributional effects of trade and trade policy on under-represented and under-served communities, including results of existing analysis, evaluation of methodologies, the use of public and restricted data in current analysis, identifying gaps in data and/or in the economic literature, and proposed analysis that could be done with restricted data;
- include information gathered through a critical review of the economic literature on the distributional effects of trade and trade policy on under-represented and under-served communities, including among other things, the data limitations raised in these analyses; and
- identify information on effects on U.S. workers by the groups specified, identifying their specific U.S. region, and make recommendations on future research.
The Commission expects to submit its report to the USTR by October 14, 2022.
Part 2: Expansion of USITC research and analysis capabilities
The USITC will expand its research and analysis capabilities so that future probable economic advice includes estimates of the potential distributional effects of trade and trade policy, including goods and services imports, on U.S. workers.
This capacity building will include the further development of models capable of analyzing:
- the potential distributional effects of trade and trade policy, including with respect to goods and services imports, on U.S. workers;
- the effect of expanded market access for U.S. goods and services products abroad on affected U.S. exporting industries; and
- to the extent practicable, the “indirect” effect on U.S. exports of intermediate inputs when final goods receive preferential access to the U.S. market.
Through this capacity building, the USITC will also identify any data limitations that, if removed, could substantially speed the time to complete the analysis or allow for improved analysis.
The USITC will provide a briefing to USTR on the results of its capacity building on these issues during the course of its work.
Public participation
The USITC expects to hold a public hearing, a series of public roundtables, and a public symposium in connection with the investigation. Information concerning these events will be announced as details are finalized. Interested individuals are encouraged to monitor the investigation-specific web page being maintained for the investigation for up-to-date information.
The USITC will also accept written submissions for the record. Information concerning written submissions will be announced when details are finalized. Interested individuals are encouraged to monitor the investigation-specific web page being maintained for the investigation for up-to-date information.
