Evaluating Global Trade: A Development-Friendly Perspective � An Analysis of the World Trade and Development Report 2007

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Evaluating Global Trade: A Development-Friendly Perspective–An Analysisof the World Trade and Development Report 2007Week 7 Discussion 1"Globalization of Trade and Finance" Please respond to the following:From the first e-Activity, give your opinion on three (3) outcomes that you believe the USrecession has had on developing countries and their ability to trade. Provide specificexamples of the recession’s effects to support your rationale.Triggered by the burst of the US housing bubble, in 2007, the global financial crisis led to adomino outcome across the globe as the problems in internationally-linked financial marketscaused a collapse in credit and demand leading to recession. In a globalized world, in whichmany economies areever morelinked as a result of the removal of barriers to trade, investmentand finance, problems in one country willcertainlyaffect others.Since China entered the WorldTrade Organization in 2001,the growthof trade between China and the United States has had adramatic effect on U.S. workers and the domestic economy, though in neither case has this effectbeenvaluable. The United States is piling up foreign debt and losing export capacity, and thegrowing trade deficit with China has been a prime contributor to the crisis in U.S. manufacturingemployment. Between 2001 and 2011, the trade deficit with China eliminated or displaced morethan 2.7 million U.S. jobs, over 2.1 million of which (76.9 percent) were in manufacturing.These lost manufacturing jobs account for more than half of all U.S. manufacturing jobs lost ordisplaced between 2001 and 2011 (Scott, 2012).Among specific industries, the trade deficit in the computer and electronic products industrygrew the most, and 1,064,800 jobs were displaced, 38.8 percent of the 2001–2011 total. As aresult, many of the hardest-hit congressional districts were in California, Texas, Oregon,Massachusetts, Colorado, and Minnesota, where jobs in that industry are concentrated. Somedistricts in North Carolina, Georgia, and Alabama were also especially hard-hit by jobdisplacement in a variety of manufacturing industries, including computers and electronicproducts, textiles and apparel, and furniture.These conclusions aboutthe jobs impact of tradewith China arise from the following specific findings of this study:Most of the jobs lost or displaced by trade with China between 2001 and 2011 were inmanufacturing industries (more than 2.1 million jobs, or 76.9 percent).Within manufacturing, rapidly growing imports of computer and electronic products(including computers, parts, semiconductors, and audio-video equipment) accounted for54.9 percent of the $217.5 billion increase in the U.S. trade deficit with China between2001 and 2011. The growth of this deficit contributed to the elimination of 1,064,800U.S. jobs in computer and electronic products in this period. Indeed, in 2011, the total

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