"Our imports grow with our economy and population while our exports grow with foreign economies, especially those of industrialized countries. Though wildly criticized as an imbalance, the trade deficit and related capital inflow reflect U.S. growth, not weakness -- they link the younger, faster-growing U.S. with aging, slower-growing economies abroad," he wrote.
Free-trade critics, beyond their gloom-and-doom rhetoric, never quite say how our country is being hurt by trade expansion. The more we grow, it seems, the more they say trade is undermining our economy.
Malpass, one of Wall Street's most astute economists, suggested we look at job growth as one measurement. "Since the 2001 recession, the U.S. economy has created 9.3 million new jobs, compared with 360,000 in Japan and 1.1 million in the euro zone, excluding Spain. This despite our trade deficits and their trade surpluses."
Significantly, like the United States, Spain, which created 3.6 million new jobs over this period, and Great Britain, which added 1.3 million jobs, all ran trade deficits. But job creation wasn't hurt and wages were rising solidly in all three countries.
"The economics is clear (for once) that a liberal trading environment allows more jobs with higher wages as people specialize," Malpass said.
Increasingly, as emerging economies like China continue to expand, so will our exports to the Chinese. China's imports are well known to any American shopper. But the growth of U.S. exports to them is less known.
They are now our fourth largest export market. U.S. exports to China shot up by nearly 33 percent through November, while imports rose by 18.2 percent over the same period.
But statistics like these are ignored by the trade critics who want to shut down free-trade agreements that lower or eliminate trade tariffs, despite the increased job-creating business that has resulted to our benefit.
Remember how fiercely these critics fought the Central American Free Trade Agreement with El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and the Dominican Republic?
Trade protectionists said these countries were too poor to buy any of our stuff. But last year, U.S. exports to these countries totaled $20.5 billion, an 18 percent hike over 2005.
The global economy is going to grow by leaps and bounds in the years to come and as it grows, so will the U.S. economy whose sales message to the world is: Buy as much as you want; we'll make more.
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