International trade essential to U.S. prosperity

July 31, 2012

Free Market Foundation

The United States is currently in negotiations with the World Trade Organisation (WTO) to increase trade liberalisation across the globe lower tariffs, stronger rules and broader membership. Though in the past the United States has been instrumental in creating and expanding the global trading system, there now are fears that the country will give in to its protectionist voices and squander this latest opportunity, says Supachai Panitchpakdi, director-general of the World Trade Organisation.

Paradoxically, says Panitchpakdi, the United States is dependent on international trade like no other country and has reaped the most benefits:

Trade accounts for about 25 percent of overall U.S. output, up from just 10 percent in 1970, and has generated one-third of the country’s economic growth since 1990.

America’s trade is increasingly more global in scope: 24 percent with its North American partners, 22 percent with Europe, 21 percent with Latin America, and 27 percent with Asia.

For every job threatened by imports there is a growing number of high-paid, high skill jobs created by exports there are now 20 million jobs supported by exporting industries as compared to 7 million a decade ago.

Imports help depress inflation and stimulate innovation.

In addition, expanding global trade is important to America’s wider objectives, such as fighting terrorism, reducing poverty and integrating China and other countries into the world-wide economy, says Panitchpakdi.

Source: Supachai Panitchpakdi, Brave New World, Wall Street Journal, February 26, 2004.

For WSJ text (subscription required) http://online.wsj.com/article/0,,SB107775761009739576-search,00.html

For more on Trade http://www.ncpa.org/iss/tra/

FMF Policy Bulletin\2 March 2004