International Trade and U.S.

Introduction

Recent downturn in the international trade requires the US Government to create and use strategic and performance plans. I hope the completion of free trade agreements with Chile and Singapore will assist strategic export plans. Besides that new free trade agreements with the five Central American democracies; Morocco? which would be their second with an Arab-Muslim country; the Southern African Customs Union? the five countries of South Africa Botswana? Namibia? Lesotho and Swaziland; and also one with Australia? a major industrialized trading partner in the Pacific? will benefit US in the long run.

And? finally? US been trying through this process to devise a broader base of support for trade at home. US is bringing in people from all walks of life small business? big business? union workers? and service workers and recognizing the significance of trade in the economy. And on the other hand? they also are trying to move ahead? an identification of the magnitude of trade with progress? which was a topic that popped up in the minds of a number of people in dealing with Africa? Asia and Central America? in particular.

Monetary Policy

These changes? and the complementary advances in technology? offer the prospect of more productive and stable real economies. The increase in the ties between national financial systems? the greater sophistication of financial markets and financial market instruments and the increase in capital flows across borders? allow risks to be shared more broadly and capital to flow to where the returns are highest? also contributing to stronger and more stable future economic growth (Browning & Adams 31-36)

This process of integration has? of course? a range of implications for policymakers. Many of these implications are positive? for the benefits of integration over time are powerful and compelling for all economies. In important ways? economic integration may have made the principal job of central banks easier? by contributing to productivity growth and reducing some sources of inflation pressure? at least during the transition when a large share of the working age population of the world is being brought into the market.

But the process of change in how economies and financial markets interact also complicates the task of central banks. Our understanding of the how these changes affect our capacity to forecast economic activity and inflation and our ability to assess how monetary policy affects the economy almost certainly lags the changes underway (Lilien 25-29).

The source of the relatively low level of nominal rates is still a matter of considerable debate. Part of the explanation lies in the decline in expectations of future inflation and uncertainty about future inflation (Kerin & Cron 87-94).

Protectionism

Protectionism raises the cost of living in the country introducing protection and even though a favored group can benefit from it? the vast majority of the population will not. Domestic consumers will be forced to pay higher prices. Instead? they are actions that benefit one domestic group at the expense of other groups in the same country (Czinkota & Ronkainen pp ...