The Custom-House

One Way Innovations Get Delayed In a Bureaucracy

Edward Luttwak explains why weapons systems are so expensive : Breaking the Bank. Why Weapons are so Expensive  (The American Interest, Sep/Oct 2007).

One problem is that defense contractors have a limited ability to exploit economies of scale.  The "astounding persistence of traditional weapon configurations" is another: 

The North American Potato Cartel

Matt Jenkins has a nifty article on the North American potato cartel in a recent High Country News: The Sultans of Spuds (August 20):

The Germans Want Their Own CFIUS

Germany is developing its own version of the U.S. process that vets foreign direct investment for national security concerns: Germany plans for own Cfius deal watchdog (Bertrand Benoit, Tony Barber, and George Parker , Financial Times, Sept 27).  But the Germans want to skip some of the bells and whistles:

CFIUS and Antitrust

Neal R. Stoll and Shepard Goldfein discuss the importance of coordination between the antitrust and CFIUS teams - particularly in light of the recent reform of the CFIUS process (the process the U.S. uses to vet foreign direct investment for national security implications) in this year's Foreign Investment and National Security Act (FINSA):  Post-FINSA Coordination of Antitrust, CFIUS Practitioners  (New York Law Journal, September 19, 2007):

Antitrust practitioners involved in international mergers and acquisitions might want to take note of this development. FINSA increases the likelihood of CFIUS scrutiny of transactions with national security implications. Thus, antitrust attorneys should be aware of the logistical implications of a CFIUS review or investigation, such as the effect on timing, "best efforts" and other provisions in the merger agreement. More generally, however, a transaction's antitrust team may wish to coordinate its efforts with the CFIUS team on an ongoing basis. Indeed, the argument that a transaction has minimal impact on national security is often bolstered by the proposition that the parties lack market power. Thus, a joint effort by the antitrust and CFIUS teams in exploring market-related issues makes sense for reasons of both efficiency and tactics.

Here's a longer extract:

Why the weak business leadership on free trade?

Business leadership has been missing on free trade issues. 

Aaditya Mattoo and Arvind Subramanian thought this helped explain the slow progress in the Doha negotiations: "Why Prospects for Trade Talks are Not Bright" (March 2005 issue of the IMF magazine, Finance & Development; Why is it so hard to reduce trade barriers?, Ben Muse, May 11, 2005). 

Francesco Guerrera and Chrystia Freeland learn that Neville Isdell, Coca-Cola's CEO, has also noticed the relatively weak business effort, and has an additional explanation: Coke chief attacks protectionism (Financial Times, Sept. 14)

Isdell

has criticised corporate leaders for not speaking out against protectionism, warning that the failure of big business  to convince politicians and public opinion of the benefits of free trade will harm global growth and companies’ profits.

In a video interview with the Financial Times... Mr Isdell said recent regulatory scandals had prompted chief executives to steer clear of controversial topics such as free trade.

Asked whether business leaders were doing enough to make a public case against rising protectionist sentiment in the US, Mr Isdell said: “No, I don’t think so. I think that, [after] what happened around Enron and the like, a lot of us put our heads below the parapet.

“I think we’re now learning to bring our heads up above the parapet again but I think, certainly on free trade, we need to be more outspoken

Steps the Government Can Take to Address Food Import Safety

The Progressive Policy Institute has just published a 10 page note by Jessica Milano about guaranteeing the food safety, with special reference to the safety of food imports: Spoiled: Keeping Tainted Food off American Tables (September 2007):

New Import Safety Report

The Administration's Interagency Working Group on Import Safety delivered its report to the President yesterday: Protecting American Consumers Every Step of the Way.

The report is only 28 pages, and is written at a high level of abstraction.  It's meant to provide an overall strategy.  The Working Group is now looking for input from the public on how to implement the strategy.  They plan a "follow up action plan" for mid-November.

The report doesn't really talk about funding constraints on the existing system.  There are references to resources, but usually to "leverging," "targeting," "focusing," or "wise use" of resources.  There's only one reference to "additional resources," indicating that requests for these have not necessarily been ruled out, I assume in the action plan.

The Chair, Health and Human Services Secretary Mike Leavitt briefed the press yesterday: Press Briefing on Import Safety by Heath and Human Services Secretary Mike Leavitt and National Economic Director Al Hubbard .

Jane Zhang reported for the Wall Street Journal today: Risk-Based System Urged for Import Safety.

ITC Report on the Panama-U.S. FTA

The U.S. International Trade Commission (ITC) has released the analysis of the agreement that it is required to prepare under the Trade Act of 2002: U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects.

Here's the abstract:

"TradeAgreements.gov"

Here's a new Web site on U.S. free trade agreements (FTAs), sponsored by five Federal government departments (Agriculture, Commerce, State, Treasury, and USTR). 

The site provides background on existing FTAs.  The main purpose appears to be to provide information about, and to advocate for, the four upcoming free trade agreements (FTAs) with Peru, Panama, Columbia, and Korea: TradeAgreements.gov.

Cuban issues facing Congress

Here's a new Congressional Research Service (CRS) report by Mark Sullivan: Cuba: Issues for the 110th Congress (July 5, 2007).  Here's the executive summary (after division into shorter paragraphs):