What are US Interests in Trade?

Hedvig Blanco

4/16/18

American Foreign Policy

U.S. Interests in Trade

What are the US interests in trade?  Is it to create a freer, more prosperous world, to satisfy local interests by 'winning' trade, to serve interest groups, or to build a US led world order?  Or is it some combination of the above?

U.S. foreign trade and global economic policies have been constantly changing for much of our countries history. In the earlier days, the U.S. government sought to develop the domestic economy independently from what was going on abroad. After the Great Depression and World War II, however, there was a shift and the U.S. sought to reduce trade barriers and to engage with other countries. These U.S. interests in trade can be said to be motivated to satisfy local interests by ‘winning trade’. Trade pacts most often than not tend to fortify U.S. political and strategic interests beyond the obvious economic gains. In the past, trade has helped to spread the value of freedom, reinforce the law, and foster economic development in other nations, however, if we consider various cases in history it seems that the U.S. has another hidden agenda beyond spreading democracy and extending trade agreements.

The “pro-America” trade policy that seeks to boost the U.S. economy and promote job creation, underhandedly uses trade as a diplomatic and development tool. This new form of policy and “era of winning” is more so about exerting global reach and power. If we consider the North American Free Trade Agreement (NAFTA), an agreement that allows goods to flow freely between the three nations: U.S., Mexico and Canada that has been around since 1994 we see an obvious change in objectives of economic policy. NAFTA sought to protect intellectual property, establish dispute resolution mechanisms and implement labor and environmental safeguards.  NAFTA fundamentally reshaped North American economic relations and encouraged economic growth amongst the three countries. However, under the “pro-America” view NAFTA has been a source of debate over free trade. NAFTA has been argued to be the source of losses in jobs specifically in the manufacturing sector. However, manufacturing is a sector that has been under pressure even before the trade agreement. According to the economic theory of comparative advantage a nation would carry out the given economic activity for which they can produce more efficiently than another, in this case the manufacturing of a product. This means that each country would be specializing in what they can do best and most efficiently.

While this agreement would truly be putting forth economic efficiency and the promotion of free trade, our underlying agenda would like to put forth other objectives. The U.S. seems to support agreements such as the NAFTA agreement when they are in its best interest. In this new ‘winning trade’ mentality these economic policies are presented in a way to make the U.S. appear like it is losing out on something rather than gaining from them. As is evident with the NAFTA agreement turning our backs on these types of agreements draws a lot of negative attention from the international community and jeopardizes our diplomatic relations with these nations.