Experts on US economic challenge

CNC report from Washington
Added On March 20, 2013

Free trade agreements and the surge in U.S. foreign direct investment in emerging markets have sparked fears of job losses and other negative economic effects in the United States.

Economists urge rapid growth in emerging economies is part of the solution to U.S. economic problems rather than their source.

The proposition was made on Tuesday, at an event hosted by the Washington-based Peterson Institute for International Economics (PIIE) contradicted some popular ideas.

The PIIE senior fellow Lawrence says that international trade only accounts for a small share of U.S. manufacturing job losses.

"Import growth is a sigh of healthy American economy. 64 percent of all of our merchandise imports are capital goods and intermediate products. So what happened is if U.S. economy is growing robustly, our imports grow actually just proportionally, rapidly. So there is often the fact, a positive association between import growth and job growth."

During the event, economists also mention that "developing country growth has contributed toward faster U.S. export growth, an increase in the variety of imports available to Americans, and higher terms of trade associated with any given trade balance".