The prominence of global commerce has made international trade policy an increasingly critical issue.
Big Picture
International trade impacts every aspect of life. Imports give Americans access to otherwise unavailable products and services, while exports drive growth in the American job market. Each new polarized administration drastically alters the American approach to trade, creating the need for policies that will last beyond the tenure of a given administration.
Operative Definitions
Imports: Foreign goods and services bought by domestic individuals and companies.
Exports: Goods and services produced in one country and purchased by those in another country.
Tariffs: Taxes placed on imports by the government of the country receiving the import.
Trade deficit/surplus: When the cost of imports is less or greater than the value of exports, respectively.
World Trade Organization (WTO): Intergovernmental organization that deals in global trade to negotiate deals and settle disputes with 164 member countries.
The International Monetary Fund (IMF): An international organization whose mission is to support global monetary cooperation, to facilitate worldwide trade and to reduce poverty, among other ambitions.
The Trans-Pacific Partnership (TPP): A proposed trade agreement between 12 different countries that was signed in 2016 in an effort to reduce tariff-related trade obstacles and create mechanisms for settling trade disputes. The U.S. withdrew in January 2017.
Important Facts and Statistics
The U.S. imported $274.5 billion and exported $200 billion worth of goods and services in 2021.
The top three trading partners of the United States in 2021 were Mexico, Canada and China.
Seven-Point Plan
(1) Reinstate Zero-Tariff policies.
Extend zero-trade tax policies in trade agreements. Push for preferential agreements, where minimal tariffs toward agreement-relevant countries are implemented in order to promote development through trade and competition.
(2) Combat unfair trade practices.
Continue to work with the World Bank, IMF and WTO to oppose harmful trade actions and unnecessarily high taxes. Continue to engage in multilateral fora to define “unfair trade” in a way that will benefit American workers.
(3) Bolster commitment to work on humanitarian issues.
Amend clauses in existing trade treaties, specifically with countries with a history of human rights abuses, lax environmental standards and inhumane work practices, in order to combat those issues.
(4) Focus on trade enforcement of intellectual property.
Refurbish the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights to include stronger enforcement laws and updated criteria for intellectual property trade.
(5) Incentivize investments in environmentally friendly trade practices.
Provide local tax breaks and research grants for transitions to circular economies. These are more sustainable types of economies that reduce waste from manufacturing and promote sustainability.
(6) Reaffirm powerful status in international trade organizations.
The United States should rejoin the TPP and commit to a long-term free trade agreement with the United Kingdom, as well as remain an active member of current trade agreements. This will reaffirm our status as a leader of world trade and promote international economic development.
(7) Protect America’s strategic interests.
Define which products are essential to national security, such as PPE, defense products, pharmaceuticals and computer chips. This would allow for greater clarity as America looks to protect its strategic interests.
Why This Initiative Is Important
With China (and other nations) vigorously competing with America in the global economy, this plan will keep all economic powers in check through multilateral institutions and fair practices. America’s national economy will greatly benefit from increased free trade, as each country will specialize in what they are most efficient at producing. The World Trade Organization is critical to American trade, allowing the protection of the economic interests of American workers while providing access to foreign markets. This plan is realistic, unlike those that would dismantle multilateral organizations and push anti-trade narratives, ultimately damaging our economy. It adapts treaties based on evolving technologies and scientific research.
The opinions expressed in this article are those of the individual author.
Acknowledgements
The following individuals worked with the author and contributed expertise, wisdom and moral support in the development of this proposal:
Gary Hufbauer: Economist and Senior Fellow, Peterson Institute for International Economics. Washington, DC.
Thomas Bernes: Distinguished Fellow and Former President, Centre for International Governance Innovation. Puerto Vallarta, Jalisco, Mexico.
John Odell, Ph.D.: Professor of International Relations, University of Southern California. Pasadena, CA.
Clay Fuller, Ph.D.: Research Affiliate, Walker Institute at University of South Carolina. Washington, DC.
Harold Rosen: Founder and CEO, Grassroots Business Funds; Founder and Former Director, Small and Medium Enterprise. Washington, DC.
Note: Not all participants agree with every aspect of this proposal. To arrive at a proposal that takes multiple views into account requires compromise and difficult decisions. For individual commentary on this proposal and more detail, go to OurNationalConversation.org. We invite you to add your comments as well.
Sources
“About Us.” IMF ELibrary, International Monetary Fund , https://www.elibrary.imf.org/page/About%20us/about-us.
Boudreaux, Donald J, and Nita Ghei. “The Benefits of Free Trade: Addressing Key Myths.” Mercatus Center, 15 Sept. 2019, www.mercatus.org/publications/trade-and-immigration/benefits-free-trade-addressing-key-myths.
Monkelbaan, J. (2011); “Trade Preferences for Environmentally Friendly Goods and Services” ICTSD Nov. 2011, forumue.de/wp-content/uploads/2015/05/AG_Handel_Trade_Preferences_paper.pdf.
Morici, Peter. “Opinion: The U.S. Needs to Rejoin the TPP to Meet the China Challenge.” MarketWatch, 1 Sept. 2021, www.marketwatch.com/story/the-u-s-needs-to-rejoin-the-tpp-to-meet-the-china-challenge-11630354791.