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PS Say More


Anne O. Krueger
Says More…

This week, Project Syndicate catches up with Anne O. Krueger, a senior research professor at Johns Hopkins University and an emeritus professor and senior fellow at Stanford University's Center for International Development. She is a former World Bank chief economist and a former first deputy managing director of the International Monetary Fund.

Project Syndicate: You’ve called for a “constructive overhaul” of the United States immigration system, including “shifting the money for a useless border wall toward improving the entire immigration application and sorting process.” Which measures should be at the top of such an agenda?

Anne O. Krueger: The simplest and most urgent measure would be to appoint more immigration judges to reduce the massive backlog, which now exceeds a million cases, compared to about 220,000 a decade ago. This would cost money, but that money could be redirected from the wall, which experts agree will not be effective.

Investing in ensuring that immigrants have decent places to stay on arrival is also important. But it is a short-term fix. Clearing the backlog of immigration cases would have a lasting impact, and should be the US government’s first priority.

Still, that is just a first step. In the longer term, the US needs to overhaul its immigration laws, with an eye toward tapping immigrants’ economic potential. The country should admit more immigrants overall, and especially more skilled immigrants. At the same time, it should lower, at least somewhat, the priority given to relatives of those who are already in the US.

PS: A prime example of abuse of discretionary power by US President Donald Trump’s administration, you recently pointed out, is the waiver system for steel-tariff exemptions, which has given some firms an unfair advantage over others. To what extent are these distortions likely to become entrenched, persisting even after tariffs are rolled back, and what might be done to counter them?

AK: The good news is that the distortions will largely be undone when the tariffs are rolled back, and the waiver system becomes defunct. Such a move would be good for all steel-using industries and workers, with the notable exception of South Korea.

When the Trump administration introduced new tariffs on steel, South Korea secured an exemption, by accepting a quota to limit steel exports to the US to 70% of its previous level. (More recently, South Korea also agreed to quotas for importing US rice.) It was a bad decision, not least because the quota system – and the distortions it has created – will outlast the tariffs.

PS: Over a year ago, you urged the international community to “stand up to Trump and reaffirm the principles of an open multilateral system – before it’s too late.” With Trump still steadily chipping away at the World Trade Organization, including by blocking appointments to its Appellate Body, what steps can other countries take to save it, and who should take the lead?

AK: Unless something changes, on December 10, the Appellate Body will no longer have enough members to function. Fortunately, many proposals are already on the table from different countries. The best hope is that the US will accept one of them, or quickly negotiate some other deal that results in it allowing new appointments. That said, as a recent Wall Street Journal article explained, the Trump administration is taking a hard line, objecting to any limits whatsoever on a country’s ability to claim it is taking an action in the name of national security.

In any case, it is true that the Appellate Body is imperfect, and negotiations on how to improve it are worth pursuing. But, first, it must be made operable again. 

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Krueger recommends

We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Krueger's picks:

  • Free Trade under Fire

    Free Trade under Fire

    At a time when free trade is under attack, this book clears up common misconceptions that are muddying the discussion.

From the PS Archive

From 2018
Krueger examined the seemingly endless contradictions of the Trump administration’s protectionist trade policies. Read the Long View.
From 2015
Krueger blamed Puerto Rico’s crisis on both the US and the island’s government. Read the commentary.

Around the web

In 2017, Krueger participated in a panel discussion on how efforts to reduce the US trade deficit could affect foreign partners and the global economy. Watch the video.

While serving as the IMF’s first deputy managing director, Krueger answered questions about the issues that occupied her during her first year on the job, from currency boards to moral hazard. Read the interview.;

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