Unfavorable balance of trade

(Ref. 301)
Problem Components
Policy issue area: Economics
Policy issue: Trade
Description: Inability of America to be fully competitive in international trade.
Symptoms: Imports driving out domestic industries; unfavorable balance of trade ($150 billion in 1990); millions of jobs lost; U.S. share of trade in services and high- tech industries dropped considerably; lagging standard of living growth rate.
Causes: High interest rates; low U.S. productivity and quality; worldwide trade barriers and restrictions against American products; abuses of intellectual property rights; lack of an effective trade policy.
Cost of problem: -
Solution Components
Resources: Business; industry; management; workers.
Goal: 1. Pursue policies that strengthen the competitiveness of industry
2. Develop an environment which promotes international trade and expands U.S. sales of goods and services
3. Implement an effective trade policy to encourage exports of manufactured goods, food, and services, and indirectly create/preserve jobs and revitalize key industries.
Program area: Economic development
Program-remedy: 1. Reduce Federal deficits and bring down interest rates
2. Solve the international debt crisis and assist economic development of Third World countries, to increase their purchasing power
3. Develop a stable international financial system
4. Strengthen the Export-Import Bank, to match the export subsidies provided by other governments
5. Encourage exports of food by expanding credit and loan guarantee programs
6. Enact Trade Enforcement Act: Systematic monitoring of trade restrictions aimed at American products, and either gaining reduction of trade barriers or imposing counter-restrictions or tariffs
7. Secure better protection of "intellectual property" to guard against unlicensed copying by foreign countries
8. Modify anti-trust policies to allow needed joint ventures and mergers
9. Implement system to collect and disseminate information on export opportunities.
Program-prevent: 1. Develop a coordinated, integrated set of trade policies, laws, and organizations to deal with the problem
2. Develop a Trade Adjustment Assistance program, to alleviate the problems of workers and industries impacted by international trade and economic change
3. Promote substantial investments in education, training and retraining of existing and future work force.
Cost of program: -
Beneficiaries: Business; management; workers; consumers.

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