US foreign trade and global economic policies have experienced drastic changes since the days of its founding fathers. Prior to the Great Depression and World War II, government and businesses mostly concentrated on developing the domestic economy irrespective of what went on abroad. Since then however, the US has generally sought to reduce trade barriers and coordinate the world economic system.
Today, the US is the world’s largest trading nation – simultaneously leading the world in imports and being among the top two exporting nations in the world. As the top export market for almost 60 trading nations, the US has had a certain degree of economic and political leverage throughout the world, which allows it to shape global policies towards its own.
One such policy is its commitment to global free trade. The US has had a major role in the formation of global trade agencies such as GATT, as well as its future incarnation as the WTO. Apart from the guidelines set by these agencies, the US also has numerous Free Trade Agreements (FTAs) with individual nations.
Current FTAs
- US-Israel FTA – since 1985
- North American FTA (NAFTA) – since 1994, including Canada and Mexico
- US-Jordan FTA – since 2001
- Australia-US FTA – since 2004
- US-Chile FTA – since 2004
- US-Singapore FTA – since 2004
- Dominican Republic-Central America FTA (DR-CAFTA) – since 2005, including Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic
- US-Bahrain FTA – since 2006
- US-Morocco FTA – since 2006
- US-Oman FTA – since 2006
- US-Peru Trade Promotion Agreement – since 2007
- US-Panama Trade Promotion Agreement – since 2011
- US-Colombia FTA – since 2011
- US-Republic of Korea FTA – since 2011
Proposed FTAs
- Free Trade Area of the Americas (FTAA) – to include all countries in Western Hemisphere except Cuba
- US-Middle East Free Trade Area (USMEFTA) – to include most countries in the Middle East
- Transatlantic Free Trade Area (TAFTA) – European Union
- US-Thailand FTA
- US-New Zealand FTA
- US-Ghana FTA
- US-Indonesia FTA
- US-Kenya FTA
- US-Kuwait FTA
- US-Malaysia FTA
- US-Mauritius FTA
- US-Mozambique FTA
- US-Taiwan FTA
- US-United Arab Emirates FTA
- US-Southern African Customs FTA – to include South Africa, Botswana, Lesotho, Swaziland and Namibia
- US-Ecuador FTA
- US-Qatar FTA
- Trans-Pacific Strategic Economic Partership
US Trade Deficit
The US trade deficit has been a hotly contested issue ever since the US first started posting trade deficits in the 1960s.
On the one hand, economists such as Federic Bastiat and Milton Friedman argue that successful, growing economies should see greater trade deficits while a shrinking economy would result in lower trade deficits.
However, the extent and size of the US trade deficit, particularly that of with China, has caused concerns within the US. In an interview with the Associated Press in 2006, Warren Buffet expressed his belief that “the U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil... Right now, the rest of the world owns $3 trillion more of us than we own of them.”
As such, there has been continual debate on whether the US should reduce its trade deficit.
Find out more the debate on the US Trade Deficit on EconomyWatch.com
US Import and Export Indicators and Statistics at a Glance (2012)
Exports: US$1.612 trillion
Exports - commodities: agricultural products (soybeans, fruit, corn) 9.2 percent, industrial supplies (organic chemicals) 26.8 percent, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49.0 percent, consumer goods (automobiles, medicines) 15.0 percent
Exports - partners: Canada 19 percent, Mexico 13.3 percent, China 7 percent, Japan 4.5 percent
Imports: US$2.357 trillion
Imports - commodities: agricultural products 4.9 percent, industrial supplies 32.9 percent (crude oil 8.2 percent), capital goods 30.4 percent (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery), consumer goods 31.8 percent (automobiles, clothing, medicines, furniture, toys)
Imports - partners: China 18.4 percent, Canada 14.2 percent, Mexico 11.7 percent, Japan 5.8 percent, Germany 4.4 percent
Read more on about the US economy, including forecasts and industry information on EconomyWatch below.
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