NEW REPORT: U.S trade policies led to COVID-19 mask and ventilator shortages; Fixing policies will help workers and economy, prevent future shortages

July 23, 2020

Washington, DCToday, Groundwork Collaborative released a new paper authored by Beth Baltzan, a fellow at Open Markets Institute, entitled “COVID-19 and The End of Laissez-Faire Globalization.” The new paper highlights how the COVID-19 pandemic and economic crisis has exposed and exacerbated the flaws in the current global trading system, specifically as shortages of live-saving supplies like masks and ventilators have emerged across the world and countries have resorted to export bans to address them.

The paper includes specific recommendations for how U.S policymakers can solve these problems by arming our government with the tools they need to crack down on companies engaging in damaging practices to maximize their profits. 

“Despite what many in the business and trade communities claim, we’re not going to solve our supply chain issues simply by removing tariffs and export constraints,” said Beth Baltzan, an Open Markets Institute fellow and author of the new paper. “If we really want to solve the problem of shortages of life-saving equipment, we must go back to the original vision of the founders of the multilateral trading system. We must rebuild the rules to promote fair competition and give governments like ours the tools to work on behalf of workers, families, and long-term economic strength. We have to stop unfair labor and environmental practices, tax arbitrage, monopolistic behavior, and currency manipulation.”

“COVID-19 has shined a spotlight on so many long-standing and glaring problems with our economic and trade policies that have made this public health and economic crisis so much longer and more painful than it needed to be,” said Sapna Mehta, Director of Policy and Research at the Groundwork Collaborative. “This paper diagnoses some clear flaws in U.S trade policy and lays out strong recommendations for fixing them in a way that will help prevent the kind of problems we’re seeing now and help our economy rebuild with a stronger foundation and shared prosperity.”

Baltzan writes that the crux of the problem is that countries, including the United States, have allowed the private sector to dictate production and sourcing decisions, which has led to production being concentrated in places where producers can maximize their profits, and ultimately to weak and fragile supply chains that break down in the face of emergencies like COVID-19 – which is exactly what we saw recently with the supply chain of masks and ventilators. 

She makes the case that the U.S. government should address this by returning to ideas laid out by economist John Keynes that would allow governments – and the global trading system itself – to protect competition by disciplining unfair labor practices, monopolistic behavior, and currency manipulation. Baltzan concludes with some recommendations for how policymakers can move in that direction.

Read the full paper HERE.

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About Beth Baltzan 

Beth Baltzan is a fellow at Open Markets and focuses on the impact of monopoly power on trade and its consequences for national security.

Beth served as Democratic Counsel to the House Ways and Means Subcommittee from 2012 to 2016, where she worked on the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership Agreement. In 2015, Beth was the principal staffer on three bills (customs, Trade Adjustment Assistance, and preferences for developing programs) and routinely collaborated with Republican counterparts.

Beth was Associate General Counsel in the Office of the United States Trade Representative from 2003 to 2009, where she participated in the World Trade Organization and other trade agreement negotiations, while also litigating trade disputes.

Between 2009 and 2012, Baltzan worked for the Public Company Accounting Oversight Board and was detailed to the Senate Permanent Subcommittee on Investigations, where she was a principal author of the JP Morgan London Whale report.

Beth has appeared on CNBC’s Closing Bell and Fox Business’ Making Money with Charles Payne. She has also been published in the L.A. Times.  She graduated from Stanford University in 1991 and earned her JD from Georgetown University Law Center in 1996.

About Groundwork Collaborative

Groundwork Collaborative is an initiative dedicated to advancing a progressive economic worldview and narrative. We are committed to collaborating with a diverse array of partners to advance an economic system that produces strong, broadly shared prosperity and abundance for all people, and not just a wealthy few. Our work is driven by one core guiding principle: we are the economy.

We work with economic policy experts, progressive movement leaders, and activists on the front lines of progressive causes in communities across the country to:

Develop and advance a progressive economic worldview.

Collaborate and foster new ideas, and develop new pathways to share information.

Break down issue silos, support and amplify each other’s work, and show up for one another on critical economic issue campaigns.

About the Open Markets Institute 

The Open Markets Institute works to address threats to our democracy, individual liberties, and our national security from today’s unprecedented levels of corporate concentration and monopoly power.

Launched as an independent organization in September 2017, Open Markets uses research and journalism to expose the dangers of monopolization, identifies changes in policy and law to address them, and educates policymakers, academics, movement groups, and other influential stakeholders to establish open, competitive markets that support a strong, just, and inclusive democracy. We focus especially closely on the new and growing threats that online “platform monopolies” pose to the free exchange of news, information, and ideas. Our team possesses deep expertise in how monopoly power distorts outcomes in major markets, ranging from the technology sector to agriculture to pharmaceuticals to transportation.  Prior to 2017, the Open Markets Team spent eight years studying, speaking, and writing about the problem of market concentration as the Open Markets Program at New America.

By combining policy, legal, and market structure expertise with sophisticated communications and outreach efforts, Open Markets seeks not only to hold today’s monopolies accountable for abuse of power, but to rebuild an economic system where progress is easier to achieve, because power is far more widely and equitably distributed.