Tracking the Economy Fool's Gold: The U.S. Import Market in the Next Decade
In trade agreements such as NAFTA, CAFTA or the proposed FTAA, the big prize that the United States offers to its trading partners is greater access to the U.S. import market. In exchange for such...
...A rapidly growing import market in the United States has offered some developing countries a path to growth...
...imports created a vast market that some developing countries, most notably China, used as a springboard for growth and development...
...200 -160 imports falling by as much as 160 $375 billion a year over the next -400 decade...
...imports (billions of 2003 dollars) must be reduced or the current account deficit-the trade deficit 1000 - plus the net outflow of payments 780 to foreign wealth nolders--wll 800 - escalate to unsustainable levels...
...debt over the 400 next decade...
...However, developing countries intending to utilize the export strategy will now have to contend with a shrinking U.S...
...A less optlimsucic set of assumptions shows U.S...
...import market will shrink in the next decade...
...import market will come at the expense of other countries that are already exporting to the United States, such as China and Mexico...
...Under any plausible scenario, the U.S...
...From 1991 to 2003, there was a $780 billion (measured in 2003 dollars) average annual increase in the amount of goods and services imported into the United States...
...to cover this deficit...
...imports are projected to drop an average of $160 billion annually between 2003 and 2013 (in 2003 dollars...
...debt grows, the payments to foreign wealth holders increase...
...In exchange for such access, the United States has demanded a long list of concessions from developing countries, including greater protection for foreign investment, the elimination of rules on government procurement that favor domestic businesses, and increased protection for U.S...
...Instead of moving into a rapidly growing market, any inroads by developing countries into the U.S...
...The United States is currently running a trade deficit that exceeds 5% of GDP...
...patents and copyrights...
...Using standard assumptions about the growth of U.S...
...In a period in which most developing countries have fared poorly, it is understandable that many would seek to replicate China's success by increasing their exports to the U.S...
...As the U.S...
...Competing for a larger slice of a shrinking pie is not likely to offer much promise for developing countries...
...The basic logic of this projection is very simple and irrefutable...
...In short, if the primary motivation of developing countries to sign trade agreements with the United States is to gain access to the U.S...
...The most optimistic sce- 1991-2003 2003-2013 (projected) nario shows a $90 billion annual decline in imports by 2013...
...I Our analysis uses assumptions Z 600 that optimistically minimize the size of the U.S...
...Such a substantial deficit cannot be sustained for long...
...exports and other economic variables, U.S...
...Consequently, the trade deficit Annual change in U.S...
...imports falling sharply over 0 mls perinod...
...These assets are paying interest, dividends and profits to foreign wealth holders-creditors and stockholders...
...import market, then they are in for a rude awakening...
...These assumptions j still point to the likelihood of 200 U.S...
...This rapid growth in U.S...
...At present, the United States is selling off its assets (stocks, bonds, deposits, etc...
Vol. 37 • March 2004 • No. 5
