The choice is not between unilateral free trade and intervention, Daniel M. Price argues, but rather between alternative tools for reducing investment barriers. Get a Different Crowbar Ellen L. Frost also argues that the United States does not need reciprocity mandates from Congress to gain leverage or to make progress in international negotiations. She points instead to the power of existing tools, such as section 301, as well as the potential of multilateral mechanisms to advance the longer-term goal of basic multilateral rules on investment conditions. Both Price and Frost emphasize the need to match policy tools to the problem at hand. In the case of China, for example, mandating reciprocity contributes little to the goal of reducing investment barriers, because the Chinese do not invest to a significant extent in the United States.
Financial services provide another case in point.
Many of the countries in Asia that refuse to meet American demands for opening their markets to U.S. financial institutions are primarily importers, rather than exporters, of financial services. Further, although America's dissatisfaction with these countries is understandable, the negotiating strategy does not make sense. Little, if anything, is added to U.S. bargaining power by threatening to close our markets through reciprocity mandates unless there are South Korean banks and Indonesian insurance firms clamoring to operate in the United States. This would hardly be an auspicious start to a multilateral round intended to limit the scope of discrimination. In the years ahead, the United States needs to decide how to preserve the economic benefits and potential of inward foreign-investment flows while also promoting the elimination of investment barriers abroad.