|
The "Strategic Brief on Misconceptions around Trade Balances"
issued by the WEF's network of trade experts did not mention
Trump by name. But it took issue with his administration's
understanding of international commerce.
"A widely held view is that a country's trade balance is a key
measure of its international commercial success," said
co-authors Harvard professor Robert Lawrence and Princeton
fellow Yeling Tan in the paper, which is due to be presented and
debated at Davos.
"Currently, invoking this reasoning, the administration is
seeking to reduce the trade deficit by renegotiating U.S. trade
agreements and adopting more protectionist U.S. policies."
Trump has railed against the U.S. trade deficit with China,
hobbled the World Trade Organization by blocking judicial
appointments, pulled out of the Trans-Pacific Partnership trade
talks and antagonized Canada and Mexico by demanding a revamp of
the North American Free Trade Agreement.
The Davos paper said Trump's administration believed "unfair"
trade had led to large trade deficits and job losses, but
policies based on such thinking could end up harming the people
they aimed to help.
The authors said similar narratives had also emerged in other
countries and regions but did not name them.
They set out seven examples of sloppy thinking on trade,
illustrated by graphs showing that the relationship between
imports and U.S. domestic employment had been "overwhelmingly
positive" and that larger U.S. trade deficits had been
associated with faster jobs growth.
The first example was that "trade deficits are bad, trade
surpluses are good". Both deficits and surpluses may be bad or
good, and the trade balance was a function of national saving
and investment, not trade policies.
Other examples were "imports are the cause of the decline in
manufacturing jobs" and "trade agreements will increase the
deficit".
Trump's Jan. 26 speech at Davos comes as his administration
prepares for a penultimate round of NAFTA talks and as he
considers imposing broad restrictions on steel and aluminum
imports, a policy which is aimed at China but risks rebounding
on the European Union.
It was wrong to think that imposing a tax on imports would
create manufacturing jobs, the Davos paper said.
"New barriers to trade could disrupt production and reduce
rather than increase domestic employment in both the protected
industries and those that use their outputs."
(Reporting by Tom Miles, editing by Larry King)
[© 2018 Thomson Reuters. All rights
reserved.] Copyright 2018 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
