The United States has lost millions of manufacturing jobs in recent years. While these job losses flow in part from the most severe recession since the Great Depression, a host of trade-related problems, both internal to the U.S. and external in terms of trade actions by our trading partners, have contributed significantly to the weakening of our manufacturing base.
The manifestation of the harm to U.S. manufacturing from the growing set of problems can be graphically seen in the ballooning trade deficit in goods that the United States has run up over the last fifty years and which has exploded in the last two decades. From a trade surplus in the trade of goods in the 1960s of $40.8 billion, the U.S. slipped into a trade deficit of $103 billion in the 1970s, a deficit of $941 billion in the 1980s, a deficit of $1.731 trillion in the 1990s, and a deficit of $6.317 trillion in the first decade of this century – a total deficit of $9.052 trillion over fifty years. With a deficit of $1.384 trillion in 2010 and 2011, we are running at a rate of increase of 59.6% over the prior decade, which means the deficit in this decade alone could top $10 trillion.
While the causes of our competitiveness challenges are many, there are a number of trade-related issues that contribute significantly to the challenges faced. My paper presented at the 2nd Annual Conference on the Renaissance of American Manufacturing held at the National Press Club in Washington, D.C., on March 27, 2012, identifies the following important problems.
(1) Differential treatment under international trade rules of direct and indirect tax systems and U.S. isolation in policy approach
(2) Currency misalignments and failure (to date) of international institutions to address and of domestic law to neutralize
(3) Rise of state capitalism and its ability to undermine the functioning of markets
(4) Regulatory burdens on businesses to achieve societal objectives where lack of international harmonization creates false competitiveness disadvantages
(5) Failure of many businesses to evaluate options available under domestic law and international agreements to address trade distorting conduct when considering whether to exit business or shift manufacturing location
(6) Need for competition policy to be reexamined to limit ability of purchasers to force abandonment of manufacturing position domestically to take advantage of lower labor cost or regulatory costs elsewhere.
For more information contact me at tstewart@stewartlaw.com or 1-202-785-4185
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