By Christopher Alessi and Robert McMahon – While trade accounts for an increasing percentage of U.S. economic output–at 25 percent–U.S. trade as a percentage of GDP is lower than that of every other developed country in the world besides Japan.
As the forces of globalization have reshaped the global economy, there has been increasing resistance to trade liberalization within the United States. Many in the American labor movement argue that free trade, which they view as unregulated, disenfranchises U.S. workers by outsourcing jobs overseas. Advocates say that expanding free trade will create new U.S. jobs by opening up U.S. exports to a range of foreign markets, boosting competitiveness.
C. Fred Bergsten, director of the Peterson Institute for International Economics and a leading trade advocate, has highlighted the country’s $600 billion annual trade deficit. “Eliminating that imbalance,” Bergsten wrote in a September 2011 New York Times op-ed, “would create three million to four million jobs, according to the Commerce Department estimates, at no cost to the budget.” He says the United States can take a number of unilateral steps to make its exports more competitive and remedy the trade deficit– including allowing the dollar to weaken by 10 to 20 percent. Moreover, Bergsten believes the United States could become more globally competitive if it reduces the barriers to exporting American services–the work of architects, engineers, and lawyers–for which he says the country actually runs a surplus of $150 billion. more> http://is.gd/u9ACUv