just as American corporations adjust the sale prices of products to meet the market they are selling in, other countrys should be forced to do the same. fair market value is determaned only by greed. while profits gained by building a product in a lower cost arena is never pased to the consumer in our country the differance is used to offset the lower sales price in other markets. allthough understandable it has no value to add to any economy. if we adopted a build here sell here policy both for import and export the employment value would bolster the economy of any market that the product was sold in. if you have to create jobs to sell your product the only thing that gets hurt is the ridiculous bonus and profit practices that downward spiral of our economy and moral of any and all workers around the world.if a product is built and marketed in a country where wages are vastly lower the price of the product in that country would match the economy that it is being marketed in and at the same time if the corporations teach the quality standards and continuous improvment mentality it cant help but leave added value to the workers and economy of that market therefore advancing the wages and self worth of the employee and market. but this statigy is much like building a retirement you have to play for the long term, and the playing feild would take 50+ years to level. but as long as we dont help build the world economy withought protecting our own we will stay on this rollercoaster of feast or famon. just as people in this country dont understand they have to remind our government they work for us. if we dont go to the poles and change the players on a regular basis the players become complacent and with no conciquince they assume they can dictate what we want instead of asking. the same applies to our economy if we continue to buy chinese product built in a country we cannot compeat with the knife at our throat is in our own hand.if we dont step up our government and corperations will sucseed in turning the U.S. into another third world country. Tim Crowley Blythewood South Carolina formerly of Greenville Michagan another ruined economy.
Protectionism Won’t Work
To ensure global prosperity, President Obama must reignite Americans' belief in free markets.
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In recent years, multilaterialism has fallen out of favor. Brokering agreements of any kind among 200 countries is difficult and time-consuming. Reaching compromise is often a messy business, and no cooperative solution is ever perfect. Such stresses and strains have led some to conclude that unilateralism or "coalitions of the willing" represent the best hope for addressing global problems, not only in politics, but also in economic spheres like trade.
As the financial crisis has bled into the real economy, governments have considered raising trade barriers to protect domestic industry.
Many have also sought to define their trade interests more narrowly through bilateral or regional agreements that discriminate between trading partners.
Such protectionism is on the rise. But those who would question the merits of further global trade liberalization via the WTO's current Doha round of trade talks should remember that the GATT-WTO framework has enabled world trade to grow more than thirtyfold since 1950, and has provided an insurance policy against protectionism. It is often forgotten today that passage of the tariff raising Smoot-Hawley Act in 1930 helped to turn a financial crisis into a full-blown depression. If we are to avoid disaster and bolster growth today, the trading system needs to be made more equitable for developing countries and more relevant to international commercial activity in the 21st century.
This is why the ambitious and development-oriented Doha round is so crucial. Economists conservatively estimate that a Doha deal along the lines of what is on the table today would boost global GDP by $100 billion each year. It would also cut export taxes by $150 billion. It might also restore governments' faith in multilateralism. Such a success would give nations more confidence in each other as they seek critical agreements on other subjects like climate change, reform of international institutions and rules for international finance.
Getting there will be impossible without the support of the United States. Here, President Obama faces a major challenge: reviving America's belief in trade. A survey conducted in 2008 found that only 53 percent of Americans think trade is good for their country. But the facts tell another story. In 2007, exports of U.S. goods and services rose by $190 billion; 2008 figures may rise by about $300 billion. As the financial crisis has sapped consumer spending, global trade and exports abroad have acted as a buffer, constituting by far the largest growth segment of the overall economy. Without free trade, the world would be in much worse economic shape than now.
Many Americans blame trade for job losses and stagnating wages. But until the financial crisis struck, the unemployment rate in the United States had been below 5 percent, near historic lows. And while trade does create both winners and losers, Harvard professor Robert Z. Lawrence argued convincingly in a 2008 study that the stagnation of middle- and working-class wages is largely attributable to the larger share of the profits that has gone into the hands of the superrich. Technological advance is also a major factor in sluggish wage growth in the United States. Yet Lawrence also shows that U.S. economic output is 10 percent higher than it would be were the country less open to trade.
These are difficult times, and people are looking for a scapegoat for their declining fortunes. Trade is an easy one, but turning our back on a multilateral trade agenda now, as the entire world economy slows, could have disastrous consequences. President Obama will have the difficult but vital job of convincing his fellow citizens that the route to better times runs through greater engagement with the global community—not in building economic walls.
Lamy is director-general of the WTO.
© 2008
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