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Unilateral free traders worried |
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Written by Stumo
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Thursday, 09 October 2008 |
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The unilateral free traders are those who think the U.S. opening its markets regardless of others' barriers is a good thing. They were wrong. The growth in "trade" was largely a growth in imports. Current account deficits grew. We buy far more than we sell.
A fortunate byproduct in this horrendous market is that the new free trade agreements are likely dead.
"They're going nowhere now," Alan Tonelson, research director at the US Business & Industry Council, a Washington business group that has been critical of US trade policies, said of the proposed new international trade pacts. "They're dead in the water."
This is not protectionism, it is realism. Rethinking trade policy is essential. The U.S. needs a minimum of balanced trade, and really needs to return to a trade surplus.
But the story line has not yet gone to deliberations about smart trade.
The alternative to a new trade model could be a rollback of global business as the voices clamoring for financial controls and trade barriers grow louder.
And here's an interesting statistic. Globalized industries grow slower than industries that are not globalized.
Last month, a report from the council said the most globalized industries in the United States, such as manufacturing, agriculture, and mining, saw cumulative growth of 38.4 percent over the past decade, just over half the 66.8 percent growth of the entire US economy. Industries unaffected by global trade, such as healthcare, construction, and personal services, grew 73 percent.
"When you see that our most globalized sectors have lagged behind the economy as a whole, that tells me that our globalization policies have failed the economy," Tonelson said.
It makes sense. Where industries have more "trade", they are really losing domestic market share to imports. Domestic market share is the most valuable to have and the most damaging to lose. Just ask farmers.
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The following was written by Charles Blum, founder of the International Advisory Services Group, Ltd. and a Director of the Coalition for a Prosperous America.
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