Posted on 10/08/2003 8:30:52 PM PDT by maui_hawaii
Not nessesarily. Not all trade relations are created equally. Likewise, not all countries are in the same internal economic funk as China.
Historically if we imported $1 worth of products from Mexico we exported 75 cents.
With China its $1 for every 15 cents.
Other economies around the world are much easier to come alive and create demand. It would most definately create demand for exports if we focus on those economies. It would have several effects.
1. American companies can compete a whole lot better against Mexican manufacturing, etc. In some cases they still won't be able to, this is due to real competitive advantage. China currently is taking investments in things they don't have a real competitive advantage in...They make their own advantage visa via currency manipulations.
2. Spreading the volume of trade over more responsive economies will lead to MANY more exports from the US to those countries.
In short when we combine #1 and #2, we will burn the trade deficit candle on both ends... and even if we don't decrease the overall amount of imports, we will increase our overall level of exports.
Its not JUST about China's size. It has an effect, but things rely on China's internal economy too.
China's internal economy is half defunct. It could be the level of development or many other things, but none the less a million bucks imported from Mexico leads to approximately 5 times the amount of exports the same amount creates in China.
It has most definately earned it.
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