Three weeks before he was elected the 47th president of the United States, during a conversation at the Economic Club of Chicago, Donald Trump declared, “The most beautiful word in the dictionary is ‘tariff.’ And it’s my favorite word.”
He had before – and has since – spoken of implementing tariffs at levels unseen in the past 80 years: 60 percent levies on goods from China; 100 percent on some Mexican-made goods, and 200 percent on vehicles imported from Mexico. The globalized trading regime, which the United States helped to establish in the aftermath of World War II, now faces an uncertain future.
Timely, then, is the publication of The Law and Economics of International Trade Agreements (Edward Elgar Publishing), by Alan O. Sykes, Warren Christopher Professor in the Practice of International Law and Diplomacy at SLS. “I’d been wanting to write this for a long time, but it was always on the back burner. I recently decided I just couldn’t put it off forever,” Sykes says. “There are many books on the law of international trade, but what’s different about this is that it integrates legal obligations with insights from the rich economic literature on international trade agreements, while making the economics accessible to readers with little technical background.” In the book, Sykes, who received his JD and PhD in economics from Yale University, braids together the core tenets and obligations of international law, the economics that underpin or flow from this law, and the roles of key institutions operating in this space.
“There’s no one like Alan. As a specialist in trade law and international trade economics, he is a unique resource for anyone interested in understanding the World Trade Organization or global trade more generally,” says Robert Staiger, a professor of economics at Dartmouth and frequent collaborator with Sykes. “His expertise gives him respect in the legal community and, at the same time, he has the ability to communicate as an intellectual equal with economists.”
After law school, Sykes entered private practice at Arnold & Porter in Washington, D.C., where he was assigned to their international trade group and had the opportunity to work with John H. Jackson, then a professor at Michigan and a preeminent figure in the study of the General Agreement on Tariffs and Trade. Sykes stayed at the firm until 1986 when he was recruited to be an assistant professor at the University of Chicago. Jackson quickly enlisted Sykes as a co-author of his casebook Legal Problems of International Economic Relations, Cases, Materials, and Text, launching Sykes’ specialization in the field.
“Now he’s one of the leading scholars in this discipline,” says Jack Goldsmith, a professor at Harvard Law School who knew Sykes when they were both at the University of Chicago. “He has also brought economic tools to bear on the subject very successfully and influentially.”
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Impactful scholarship
Staiger, who started working with Sykes in the early 2000s when he was a reporter for the American Law Institute project on principles of trade law at the World Trade Organization, says that Sykes has continued to probe new facets of international law throughout his career. They have collaborated on scholarship related to currency manipulation, trade in services (as opposed to goods), and dispute settlement between investors and states. “Time and again, I’ve found Alan pushes me outside of my comfort zone,” Staiger says. “And he also pushes his colleagues to make sure that what they’re writing will actually have an impact, that it is applicable to the real world.” In following this prescription, some of Sykes’ recent work has proposed reforms to the WTO’s sclerotic appeals process, which is currently at a standstill.
Sykes is known for a free-ranging intellect that pulls him toward projects on a variety of subjects. “It’s important to point out that Alan has major academic work in multiple fields, not just international trade,” says Daniel Fischel, professor emeritus at the University of Chicago who helped recruit Sykes. “He has written on the economics of damages, contracts, torts, RICO statutes, corporate criminal liability, and all of those writings are significant contributions to the literature on big subjects.”
Another colleague, Doug Irwin from Dartmouth, explains that Sykes is one of the foremost scholars on the economic and legal aspects of subsidies. “When policymakers look for the best writing, when they wonder what to read about subsidies, they won’t go very far before encountering Alan’s work.”
Trade at a pivotal time
Looking at the geopolitical landscape today, Sykes says it’s unclear the extent to which President-elect Trump will follow through on his trade rhetoric. He may raise tariffs in a bid to rekindle American manufacturing, or he may use the threat of tariffs to negotiate concessions.
There are also some legal questions about the limits of Trump’s powers to carry out his threatened trade measures without further authorization from Congress, which might prove difficult to secure despite Republican majorities in both houses. “Under the Constitution, the power to regulate trade sits with Congress, though it has delegated quite a bit of authority to the president in modern times,” Sykes says. Presidents can take action on trade if, for instance, they believe a foreign government has violated its legal commitments to the United States or if a particular realm of commerce poses a threat to national security. (President Trump’s tariffs on steel and aluminum imports invoked national security.) “Whether Congress has delegated enough power to enable the executive branch to enact the sweeping trade measures proposed in the latest election cycle may be a subject of litigation,” Sykes suggests, “although many Washington trade lawyers suspect that Trump would likely prevail against domestic legal challenges.”
Setting aside the specifics of trade, Sykes describes the more encompassing power of commerce to engender peaceful relations. Though a debated thesis, some argue that the trade wars of the 1930s exacerbated the Great Depression, which in turn contributed to conditions that led to World War II. More generally, various scholars have advanced the thesis that trade between countries – the United States and China, say – increases interaction, builds interdependence, and creates political coalitions interested in sustaining peace.
“If the world drifts into distinct trading blocs, that could well have implications for stable international relations more generally,” Sykes says. “If nothing else, this is a fun field to be in right now given all the action.”
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This story was originally published by the Stanford Law School.