Pella Chronicle

Opinion

October 23, 2009

Trade is part of the solution

Both the World Trade Organization and Global Trade Alert recently issued reports detailing the alarming trend of creeping protectionism that threatens to slow the global economic recovery and hinder national competitiveness.

Trade is vital to economies throughout the world, and the U.S. economy in particular. In 2008, exports of goods and services generated about $1.84 trillion, or 13 percent, of U.S. GDP, according to the Commerce Department. By some calculations, ten percent of all U.S. jobs and 20 percent of our manufacturing jobs depend on exports. And trade-related jobs typically pay 13 to 18 percent more than the average U.S. wage.

In addition, the claims of international trade’s adverse impact on the U.S. economy are frequently exaggerated. A recent study by the Federal Reserve showed that import competition is only responsible for about 2.5 percent of job losses - most layoffs in America’s highly dynamic economy stem from technology, domestic competition, and changes in consumer choices. Even during the current economic slowdown, the resilience of our exports has been one of the few bright spots in our economy.

While economic progress through expanded trade and investment can trigger some dislocations, those impacts should be addressed not through protectionism, but rather through the expanded Trade Adjustment Assistance program that was enacted as part of the Recovery Act. Dislocated workers as well as those just entering the workforce must have access to education and training to acquire the skills they need to secure high-paying jobs of the 21st century.

Clearly, trade can be a driver of economic growth for the United States. Some 95 percent of the world’s consumers and 80 percent of global purchasing power lie beyond our borders, and we are seeing increased commercial opportunities in emerging and developing economies. And while the United States and EU still constitute 54 percent of the global economy, the dynamic economies of Asia have the strongest growth trajectories.

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