In the wake of the Great
Recession of 2008–09, economists feared that protectionist policies might sweep
the world economy, echoing the wave of tariff escalations during the Great
Depression of the 1930s. To some surprise, officials were more restrained and
largely avoided traditional forms of protection (tariffs and quotas), leading
some observers to underestimate the incidence of new protectionism. In
fact, policymakers increasingly turned to more opaque behind-the-border
nontariff barriers (NTBs). Using a combination of statistical analysis and case
studies, the authors show that local content requirements (LCRs), a form of
NTB, have become increasingly popular. How much was global trade actually
reduced on account of LCRs? A conservative estimate might be $93 billion. Case
studies featured cover the healthcare sector in Brazil, wind turbines in
Canada, the automobile industry in China, solar cells and modules in India, oil
and gas in Nigeria, and “Buy American” restrictions on government procurement
in the United States.
For more than 50 years the United States has attempted to destabilize and isolate the Castro regime in Cuba with the use of trade and financial sanctions, a policy that has fallen short of its objective. In this Policy Analysis, Gary Clyde Hufbauer and Barbara Kotschwar suggest that the sands of time may accomplish what economic pressure did not. Raúl Castro, president of Cuba since 2008, plans to step down at the end of 2018, implying a new regime in five years. Various forces are starting to emerge favoring economic normalization if Cuba appears ready to change its policies as well as its leadership. The authors caution, however, that a unilateral dismantling of US sanctions without insuring that proper institutions are in place in Cuba could squander a golden opportunity for US companies. They argue that a new US-Cuba relationship must entail a lifting of Cuba's barriers to trade and investment, liberalization of its economy, and the adoption of democratic institutions. They offer a roadmap for a future US-Cuba rapprochement.