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The Devil is in the Details: Protectionism and the Implementation of Stimulus Packages

The Devil is in the Details: Protectionism and the Implementation of Stimulus Packages. Simon J. Evenett www.evenett.com. Introductory remarks. Many countries have implemented sizeable stimulus packages during the crisis.

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The Devil is in the Details: Protectionism and the Implementation of Stimulus Packages

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  1. The Devil is in the Details: Protectionism and the Implementation of Stimulus Packages Simon J. Evenett www.evenett.com

  2. Introductory remarks • Many countries have implemented sizeable stimulus packages during the crisis. • Even when the enacting legislation is non-discriminatory, the implementation can be discriminatory. • Drawing on the experience of the American Recovery and Reinvestment Act of 2009, the purpose of this presentation is to identify the trade and investment implications of the implementation of stimulus packages. • Even though a full evaluation of the effects of this stimulus package must wait, there are enough findings of relevant to trade policymakers.

  3. Enacting the ARRA • Many of the U.S. trading partners complained about the Buy American provisions in the proposed ARRA. • Intervention by President Obama led to the inclusion of the clause "This section shall be applied in a manner consistent with the United States obligations under international agreements." • At the time, this placated foreign concerns. • Clarifications required during implementation. • Has each stage of implementation been non-discriminatory?

  4. Scale of the ARRA Adapted from John Taylor et al's analysis of the ARRA, February 2009.

  5. The implementing regulations of the ARRA • The Conference Report of the US Congress. • The Office of Management and Budget's revised guidance, 3 April 2009. • The Interim Rule of the Federal Acquisition Regulation, 31 March 2009. • Environmental Protection Agency regulations issued on 28 April 2009. • Other developments including the ongoing "Make Our Future Work" campaign.

  6. Three lessons for policy makers • Devil is in the (implementation) details—continuing vigilance is needed. Assurances at time of enactment are not enough. • Limited nature of existing plurilateral disciplines has made circumvention (through transfers to sub-federal governments) possible. • ARRA effectively discriminates against all firms, U.S. or foreign, that have built up supply chains. (…there are more lessons in the paper, which you can obtain by emailing me at simon.evenett@unisg.ch)

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