Can Trade Motor U.S. Economy?
, Bernard L. Schwartz Senior Fellow, Council on Foreign Relations
, Deputy Chief of Staff, AFL-CIO
November 7, 2011
[Editor's Note: This is part of CFR's Renewing America initiative, which examines how domestic policies will influence U.S. economic and military strength and its ability to act in the world.]
The U.S. Congress passed long-stalled free trade agreements last month with South Korea, Colombia, and Panama, reigniting a policy debate over the role of trade in driving U.S. economic growth and competitiveness. Free trade advocates argue that it generates manufacturing jobs and helps develop new markets for U.S. exports, while critics contend that free trade deals often sacrifice U.S. jobs to overseas competitors without assisting displaced workers.
In this roundup, four experts outline measures the United States can take to make free trade an engine for economic growth and competition, while better serving the needs of U.S. workers. CFR's Edward Alden suggests that the United States focus on trade deals with emerging markets, stricter enforcement of trade rules, and a worker retraining program for those displaced by trade. The Peterson Institute's C. Fred Bergsten says that for the United States to be a competitive trade power it must get its "domestic house in order" by reining in its budget deficit. Conversely, the AFL-CIO's Thea Lee says the United States should stop "whining about the budget deficit and start making concrete long-term investments in infrastructure, education, and skills" to better compete globally. For trade to work for the United States today, it will require global rebalancing, says Clyde Prestowitz of the Economic Strategy Institute, who recommends reducing domestic consumption, "while increasing investment, production, and exports."