Archive for the ‘Trade and Immigration’ Category
Unlawful Presence Waivers Are Not Amnesty
Under current law unauthorized immigrant spouses or children of U.S. citizens can gain lawful permanent residency (LPR) status if they return to their home country to apply at a U.S. consulate or embassy. The Catch-22 is that unauthorized immigrants who have lived here are barred from returning for up to ten years once they leave the U.S. The immigrant has to apply for an unlawful presence waiver to remove the bar, a process that could take up to 28 months, including appeals, separating the immigrant from his U.S. family in the mean time. Consequently, many unauthorized immigrants who could regularize their status do not take this opportunity.
The government is now asking for comments on a proposed rule change that would close part of that administrative Catch-22. Under the proposed rule an unauthorized immigrant could apply for and adjudicate the waiver before departing for interviews in consulates abroad, shortening the separation time between the immigrant and his family. Half of waivers are approved in seven days at the American consulate in Ciudad Juarez, Mexico. The other half can take years.
The waiver removes the bar on returning if the immigrant can show that “being separated from their U.S. citizen spouse or parent would cause that U.S. citizen relative extreme hardship.” Extreme hardship only applies to the migrant’s U.S. citizen spouse or parent, not to the immigrant himself or his U.S.-citizen children. Extreme hardship is determined by USCIS bureaucrats where relevant factors include the intensity of family ties, health, age, financial impact, and country conditions. Financial problems and the normal hardship of familial separations are not, by themselves, sufficient reasons to grant a waiver.
Even with those strict legal requirements, thousands of people could have their immigration status legalized. The proposed rule change doesn’t go far enough. A better legislative change would remove the bar on reentry for unauthorized immigrants who are married to a U.S. citizen, obviating the need for a waiver entirely. Limiting it to spouses would not provide an incentive for unauthorized immigrants to have children in the U.S. to claim future LPR status through their children’s citizenship, not that there is a problem with that but some might object. This change would preserve the spirit and intent of our restrictive immigration laws while allowing many to regularize their status. Ted Alden of the Council on Foreign Relations thinks that up to a million unauthorized immigrants could regularize their immigration status if a rule change along those lines was proposed.
The government’s rule change is not an amnesty as some commentators claim. It would streamline a costly bureaucratic process for people who can already apply for LPR status and diminish the number of unauthorized immigrants without placing additional costs on the government. Sounds like a pretty good deal to me.
House Republicans—Including ‘Tea Partiers’—Support Ex-Im
A group of 30 House Republicans, including a few members who ran as Tea Partiers according to this article by CQ, have sent a letter to the House Republican leadership calling for the reauthorization of the Export-Import Bank. (I’ve written here and here on why that’s a bad idea.) Their names are right there at the bottom, folks.
The signatories trot out the usual talking points in support of the bank, including the pretty easily debunked line that it “returns money to the U.S. Treasury,” and plenty of mercantalist nonsense. I wonder which part of the limited government, free market philosophy supposedly guiding the Tea Party movement would justify a government agency that acts as financier to some of the largest corporations in America?
Save the EWG Farm Subsidy Database!
When the Environmental Working Group released the 2011 edition of its groundbreaking farm subsidy database, they asked for my comment to use in their press release. I was more than happy to do so, and I had this to say:
I can think of fewer initiatives that have had as big an impact on the American farm subsidy debate as EWG’s database. By shedding light on just who gets these subsidies, how much they get, and where they reside, the EWG has exposed U.S. farm programs for what they are: expensive, outdated, distorting, regressive ways for politicians to shovel money to their powerful special interest friends. When American agriculture is finally free of the shackles of government intervention, it will in large part be thanks to the folks at the Environmental Working Group.
No good deed goes unpunished, of course, and the wonderful work of the EWG has annoyed many in the farm lobby. But it is a crucial part of the farm bill reform effort, not to mention a good way for taxpayers to learn where their money goes. And judging by the bill voted out of the Senate Agriculture Committee yesterday, it seems we’ll need every piece of ammunition available if we are to see any reform to U.S. agricultural policy. The Committee’s bill would end direct cash payments—based on historical production and not linked to current production or prices, and therefore relatively less distorting—but increase the role of subsidized crop insurance that would protect farmers from falls in revenue. (Here’s Chuck Abbott from Reuters with a nice summary).
Adding insult to injury, the fact that farm support seems to be turning towards a greater emphasis on crop insurance is not good news for taxpayers who thinks they have a right to know where their money is going. That’s because the Federal Crop Insurance Act (in SEC. 502. 7 U.S. C. 1502 (c), available here) prohibits the Risk Management Agency of the United States Department of Agriculture from disclosing information about who receives crop insurance subsidies, other than in aggregate form. And a Freedom of Information Act request won’t help, because the FCIA has stated that crop insurance subsidy information is exempted from FOIA provisions (in 5 U.S.C. § 552(b)(3)).
So, in short, the more we move toward crop insurance, the less EWG—and the public—will know about where money is going.
It’s considerable money, by the way: the USDA (i.e., you) spent $7.4 billion on crop insurance subsidies in 2011, plus $1.3 billion in administrative and operating expenses for insurance companies. The federal government pays an average of 62 percent of the total premium costs (up from 37 percent in 2000). The Government Accountability Office released a pretty damning report on crop insurance last month, saying that the RMA doesn’t do enough to prevent fraud and abuse of the system, and calling for cuts to premium subsidies. According to the report (pp. 19-20), one farming business (of course, we don’t know who, thanks to the FCIA) received $1.8 million in premium subsidies in 2010, plus an extra gift from the taxpayer in the form of a $309,000 payment to insurance companies to administer the farm’s insurance policies. Another farmer insured crops in eight counties and received about $1.3 million in premium subsidies. The largest recipient was a corporation that insured nursery crops across three counties for a total of about $2.2 million in premium subsidies and over $800,000 in administrative expense subsidies.
I’ll stop there before I start a riot, and return to my main point, which is this: I suspect my opinion on the proper role of government differs from that of many staff at the EWG, and I disagree with parts of the platform they are proposing for the upcoming farm bill. But I’ve nothing but respect for the good folks working there, and nothing but profound admiration for the fine work they’ve done. If we are to see any change in agricultural policy in this country, the EWG must be allowed to continue that work, and to have access to the information that enables it. It’s nothing short of shameful that politicians want to limit that access.
Justice Sotomayor: “[Mr. Solicitor] General, I’m Terribly Confused by Your Answer”
Yesterday’s argument in Arizona v. United States (my preview here), which in a non-Obamacare world would be the case of the decade, revealed among other things yet another bizarre legal position taken by the Obama Justice Department. That is, the solicitor general stood there and straight-facedly made the claims that: (1) local law enforcement could make ”ad hoc” judgments to apprehend illegal aliens but state governments (the bosses of said local officials) could not “systematize” such policies by legislation; and (2) state laws like Arizona’s were unconstitutional because they interfere with federal policy decisions on how to allocate enforcement resources.
It was the first point that caused Justice Sotomayor’s (understandable) confusion.
Solicitor General Verrilli apparently resolved that confusion in an unsatisfactory manner, because Sotomayor later asked him for other arguments because “you can see [that this one is] not selling very well.”
The second point was met with similar skepticism by the Court, with Justice Alito asking whether, if “the federal government changed its [enforcement] priorities tomorrow . . . . Would the Arizona law be un-preempted?”
These colloquies don’t necessarily mean that the DOJ is headed towards a precipitous defeat — here’s a transcript and summary of the whole argument so you can judge for yourself — but it does show how far off the reservation this administration goes to assert political stances (and controversial ones at that) in place of sound legal reasoning.
Incentives for Unauthorized Immigration Remain
Michael Barone had an excellent piece in today’s Examiner where he wrote that the Mexican unauthorized immigration problem is going away because net Mexican migration is around zero for the first time since the Great Depression. Barone points out many reasons for this change: the size of the Mexican emigration cohort is remaining steady (Mexican women are about 1/3 as fertile in recent years as they were in 1970), U.S. economic growth is sluggish, sectors of the U.S. economy that employ unauthorized workers were some of the hardest hit in recent years, and Mexican economic growth is rapidly increasing incomes South of the border. All right so far.
But Barone is wrong to assume that just because Mexican unauthorized migration is abating that the problem will go away. For hundreds of millions of the world’s poor, the incentives to migrate remain.
Immigration is mostly driven by economics. The cost of moving here (ignoring the cost of dealing with the U.S.government) is going to continue to fall while the benefits will remain high. Since 40 to 50 percent of unauthorized immigrants entered the U.S. legally and overstayed their visas, some unauthorized migrants don’t need to cross a harsh desert anymore. Migrant source countries are changing again but the flow won’t stop.
Very poor countries don’t send many immigrants because the people there can’t afford to move. That’s why there aren’t many immigrants from the poorest nations of the world. People have to reach a certain level of prosperity before they can afford to migrate. After that point is reached, immigration continues until the gains from doing so shrink. The income gap between Mexico and the U.S. has narrowed so migration is slowing down on its own accord.
Other Central Americans still feel the economic pressure to migrate even if U.S. law doesn’t cooperate. This trend is reflected in the estimates of the unauthorized population compiled by the Department of Homeland Security. From 2000 to 2011 the unauthorized Mexican population increased by 45 percent. Over the same time the number of unauthorized Guatemalans increased by 82 percent and Hondurans by a whopping 132 percent.
Human smugglers have many informal routes into the U.S. Until recently they’ve mostly been serving Mexicans but they are diversifying into other countries and finding migrants who will pay more. Smuggling prices are hard to come by since it’s illegal but anecdotal evidence suggests Chinese pay $75,000 per person and Indians pay around $20,000 to come to the U.S. illegally.
The lack of a legal route for most potential migrants combined with a strict enforcement mechanism increases the costs and diminishes the benefits of migrating. But for millions the benefits of coming illegally still outweigh the costs of working in the informal economy. When economic growth in the U.S. recovers unauthorized immigration will also recover. The source countries for these immigrants may shift but at long as our immigration laws are restrictive and the benefits of coming here are greater than the costs, unauthorized immigration will persist.
Immigration Laws at the Supreme Court: Constitutional but Bad Policy
For anyone suffering from post-Obamacare-argument Supreme Court withdrawal, this Wednesday the Court takes up Arizona’s controversial Senate Bill (“SB”) 1070. See my blogpost from when the Court granted review for some background.
SB 1070 is much-misunderstood: it has nothing to do with sexy political issues like racial profiling and everything to do with boring legal ones like whether a given state provision is “preempted” by federal law. That is, do the various parts of the state law — each one of which the Court will be evaluating independently – conflict with federal law (direct preemption) or intrude in an area exclusively reserved to Congress (implied preemption).
United States v. Arizona shows that there’s a difference between what’s constitutional and what’s good policy. SB 1070 was crafted to mirror federal law rather than asserting new state powers that interfere with federal authority over immigration. That’s why lower courts only enjoined four of its provisions and why the Supreme Court would not be wrong to resurrect even those four.
But beyond this hyper-technical legal analysis, SB 1070 and copy-cat laws elsewhere — some of which go further than Arizona’s and thus are of more dubious constitutionality — highlight the dysfunction in our immigration system. Given Congress’s failure to act in this area, state governments have spawned a host of federalism experiments. Many of these laws are terrible policy for reasons ranging from economic effects to the misuse of law enforcement resources.
Legal scholars always enjoy the opportunity to point out laws that they think are constitutional but bad policy. It makes them feel intellectually honesty (if they have reason to be defensive in that regard). Well, immigration is the most obvious place where my constitutional and policy views diverge. The ultimate solution here isn’t for the Supreme Court to strike down the states’ lawful if misguided legislation, but for Congress and the president to enact a comprehensive national reform.
For more on what’s at stake in the case, see my SCOTUSblog essay from last summer, my forthcoming law review article, and my new colleague Alex Nowrasteh’s recent op-ed. For the briefs and other background materials, see SCOTUSblog’s case page.
‘How an E-Verify Requirement Can Help’
I know little about a House Judiciary Committee hearing tomorrow on E-Verify, but the title of it has a peculiar odor: “Document Fraud in Employment Authorization: How an E-Verify Requirement Can Help.”
You see, the immigration policies Congress has set are the source of the problem. Document fraud is made more likely by employment authorization requirements meant to enforce them, which are also—let’s remember—intrusive and costly business regulation.
In my Cato Policy Analysis “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” I wrote about restrictive immigration policies and the intrusive “internal enforcement” programs they have spawned. In a section titled “Counterattacks and Complications,” I examined how workers and employers will collude to avoid and frustrate worker verification. Mandatory E-Verify will increase identity and document fraud because it makes these frauds profitable. Trying to solve this problem, the government will naturally gravitate toward more powerful identity systems, including biometric identity cards and tracking.
Sure enough, House Judiciary Committee chairman Lamar Smith’s bill, the “Legal Workforce Act,” has a “pilot program” for a biometric national identity card.
When committing fraud is the pathway to productive employment, you know something is out of whack. Among the things out of whack are: too-restrictive immigration policy, internal enforcement, and E-Verify. This is supposed to be a free country where willingness and ability are the keys to employment.
How Naysayers See the World Trade Organization
Public Citizen’s Lori Wallach is no fan of the World Trade Organization. But her mischaracerizations of how that body operates require correcting. Wallach published this piece on April 9 on the Huffington Post blog under the title, “WTO Orders U.S. to Dump Landmark Obama Youth Anti-Smoking Law.” Here are some excerpts followed by commentary.
Behind closed doors in Geneva, a World Trade Organization (WTO) tribunal issued a final ruling ordering the U.S. to dump a landmark 2009 youth anti-smoking law.
However, this is what the last paragraph of the WTO Appellate Body report actually says:
The Appellate Body [the highest "court" in the WTO] recommends that the DSB [WTO Dispute Settlement Body] request the United States to bring its measure, found in this Report, and in the Panel Report [the Panel is the equivalent of a lower court] as modified by this Report, to be inconsistent with the TBT Agreement [Technical Barriers to Trade], into conformity with its obligations under that Agreement. (My emphasis.)
The decision – just like U.S. court decisions are made – was made behind closed doors in the sense that the judges probably evaluated the merits of the claims against the texts of the agreements in the comfort of their own offices with their doors closed. The Appellate Body report, though, which includes the rationale for each decision in the report, is available right here, to the public. Likewise, the original Panel report is available here, as is plenty of other relevant information.
Contrary to the characterization that Wallach and other anti-globalistas have been trying to paint for years, the WTO is not some faceless bureaucracy issuing edicts that run roughshod over national sovereignty and local laws. The WTO has no special power to compel any member state to do anything. Contrary to Wallach’s claim that a WTO “Tribunal” (sounds like a military junta, no?) “ordered” the United States to “dump” a “landmark” anti-smoking law, the WTO Appellate Body merely requested (see above) that the United States bring a specific clause of the law into conformity with U.S. treaty obligations. WTO Panels and the AB only recommend or request.
The Washington Post Pulls Its Punch
The Washington Post editorial board yesterday weighed in on the Ex-Im Bank’s controversial reauthorization. After listing quite comprehensively the bank’s many failings and the spurious grounds for its very existence, the WaPo courageously comes down on the side of “Everyone else does it” (yes, that is a direct quote). It all raises the question: if the Ex-Im bank is motivated by poor policy and poor economics, then why should we wait for other governments to stop subsidising export credits before we do the same? (Don Boudreaux comes to a similar, if more colourfully worded, conclusion here.)
In other news, and as the WaPo editorial alludes to, a Delta airlines subsidiary will benefit from a recently-approved loan guarantee from Ex-Im to a Brazilian airline, to finance the shipping of their aircraft engines to Atlanta for repair. Will this in any way affect Delta’s erstwhile opposition to Ex-Im activities (on the grounds they harm jobs in American airline services)? Time will tell, but Delta is unmollified, according to this recent article in Politico.
Argentina Bans Book Imports due to ‘Human Health Concerns’
The Argentine government has severely restricted the importation of books due to “human health concerns” [in Spanish]. That’s right. According to the government, it can be dangerous to “page through” a book that has high lead quantities in its ink. “If you put you finger in your mouth after paging through a book, that can be dangerous,” said Juan Carlos Sacco, the vice-president of an industrialist organization that supports the measure.
The government claims that this is not a ban. However, since each buyer has to demonstrate at the airport’s customs office that the ink in the purchased book has lead quantities no higher than 0.006% in its chemical composition, the result is that all book imports into the country are stalled.
The measure has a lot to do with the increasing efforts of the Argentine government to stop the flight of dollars out of the country. Capital flight in 2011 reached $21.5 billion, and it accelerated after the reelection of Cristina Fernandez de Kirchner in October. Facing increasing fiscal pressures, and after seizing private pension funds and raiding the Central Bank’s reserves, many people expect the government to go after their bank savings.
The government has reacted with increasingly ridiculous measures. Sniffing dogs are being deployed at airports and border check points to detect the ink used to print U.S. bills, so Argentines cannot take out of the country more than $10,000 without declaring it to the government. The Fernandez administration is also requiring major importers such as automakers to match the price of their imports with that of goods they must now export. As a result, Porsche is exporting Malbec wine and Mitsubishi is now selling peanuts.
This is the economy that Paul Krugman defended as a “serious country.”
The government’s proliferation of capital and import controls is now clearly threatening freedom of speech. The restriction on foreign books is a measure consistent with the Fernandez administration recent push against independent newspapers and its growing authoritarian tendencies. As an Argentine friend told me last night, “I’m pretty confident that they’ll come after the Internet any time soon.”
Ex-Im Shenanigans, cont’d
Kudos to Tim Carney, who has a great piece in the Washington Examiner today highlighting some of the politics and policy substance behind the fight over reauthorisation of the Ex-Im Bank. It’s gratifying to see a journalist take a stand against outrageous corporate welfare. If only it were more common (I’m looking at you, New York “the bank is self-financing” Times).
My new paper on Ex-Im, in which I expand on this blog post from a few weeks ago, was released yesterday. You’ll find even more evidence –as if it were needed — of why the Ex-Im Bank, rubber stamped through Congress by both parties on behalf of their rent-seeking friends for almost 80 years, has got to go.
Trade Policy Lessons in WTO Challenge of China’s Rare Earth Restrictions
This morning the Obama administration lodged an official complaint with the World Trade Organization’s (WTO) Dispute Settlement Body over China’s ongoing restrictions of exports of “Rare Earth” minerals. Rare Earths are crucial ingredients used in the production of flat-screen televisions, smart phones, hybrid automobile batteries, and other high technology products.
The formal complaint was not entirely unexpected since the dispute has been on a low boil for nearly 18 months; the U.S. government recently prevailed in a WTO dispute over a similar issue concerning Chinese export restrictions on nine raw materials used in manufacturing; and, this is an election year in which President Obama has carte blanche to outbid the Republican presidential aspirants’ China-bashing rhetoric with administrative action. So, no surprises really.
Despite the added political incentive to look tough on China this year, the administration should be applauded for its efforts to compel China to oblige its WTO commitments. This is a legitimate complaint following proper channels. In fact, this is exactly the course of action I have long argued for. Negotiations, consultations, and formal WTO dispute resolution (which begin with a long consultation period in which the parties are encouraged to find solutions without formal adjudication) are precisely the methods of dispute settlement conducted by governments that respect the process, their counterparts, and the rule of law in international trade.
In a Cato paper published last week, I wrote:
There is little doubt that certain other Chinese policies would not pass muster at the WTO. China’s so-called indigenous innovation policies, forced technology transfer requirements, porous intellectual property enforcement regime, and rare earth mineral export restrictions are some of many legitimate concerns that might justify formal WTO challenges. (Emphasis added.)
Now, my perspective is not motivated by a fetish for WTO litigation, but a certainty that the alternatives would be bad. Unilateral, discretionary actions taken by governments to redress perceived violations or shortcomings of another government undermine the rule of law in trade and encourage retaliation. Both China and the United States are guilty of taking such unilateral, discretionary actions, and bilateral tensions have increased as a result (see here).
U.S. policymakers should appreciate that today’s formal complaint on rare earths is an example of the right way to address perceived trade barriers. They should also recognize in the arguments advanced by the Office of the U.S. Trade Representative the flawed economics in their support of last week’s countervailing duty legislation (the so-called GPX or NME/CVD bill).
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