That should have been the headline of a USA Today article telling readers that the heads of several major corporations went to Congress to push for approval for three pending trade agreements. Instead, USA told readers that the CEOs said that the trade deals "could help revive the ailing U.S. economy." Of course lobbyists never publicly say that Congress should do "X" because it will make us richer. They always say do "X" because it is good for the country. Reporters should know this. While exports have been a major factor in supporting growth over the last year. The decline in imports have been almost as important, adding an average of 0.7 percentage points to GDP over the last three quarters, a period in which growth has averaged just 1.3 percent. The article implies that we should have more trade agreements because of the importance of exports in recent growth. By this perverse logic, we should also raise tariffs because the decline in imports has been so important in boosting growth. Remarkably this article does not mention the decline in the dollar, which virtually all economists would acknowledge has been the main factor behind the improvement in the trade balance, both increasing exports and decreasing imports. A further drop in the dollar would be far more effective in boosting exports than trade agreements with relatively small countries with which the United States already has relatively open trade.
--Dean Baker
