The State of World Trade
Better than it might be, worse than it could be.
Yesterday I posted about a recent U.S. Chamber of Commerce study about the economic impact on the U.S. economy of free trade agreements. The Chamber has been busy and has also published a new study of the impact of exports overall on America’s well being. This study, The State of World Trade, looks at far more than FTAs, addressing protectionist tendencies around the world, opportunities in global trade, and success and failure in implementing trade agreements and obligations.
It isn’t surprising, during an economic downturn, to see many countries pushing protectionist policies. We seem to hear about one restriction or another virtually every day (I have reported here about China’s many restrictions and everybody talks about the value of the yuan, but China is far from alone in such policies). The remarkable thing, however, is that the world’s trade policy gurus have thus far avoided the slippery slope of protectionism that made the Great Depression so much worse than it had to be. The WTO’s warnings appear to have had the desired effect of heading off the worst of it.
But not all is perfect. The stimulus packages of some nations have resurrected “buy national” policies, including the infamous “Buy America” rules and China’s attempt to impose “indigenous innovation.” Many countries are ignoring inconvenient obligations under their international agreements (for example, Washington’s refusal to admit Mexican trucks as required under NAFTA).
The Chamber is concerned, rightly in my opinion, that the United States is losing jobs and opportunities while our competitors negotiate free trade agreements and we sit still. The Chamber estimates that the FTAs with South Korea, Panama and Colombia would create $40 billion in export sales and in excess of 380,000 U.S. jobs – if only we would grasp the prize. The likely benefits dwindle with every day we refuse to compete with our major trading partners in these markets. The European Union and Canada have FTAs or are negotiating them with all three, and China can’t be far behind.
