Question

in the united state economy what needs to do in order to stay competitive in the world market.

Answer 1

The Americans make up less than 5 percent of the world's population, producing and earning more than 20 percent of the world's overall wealth. America is the largest domestic economy in the world, and the leading foreign investor. The process of opening up world markets and increasing trade, started in the U.S. in 1934 and actively followed since the end of World War II, has played an important role in the growth of American prosperity. According to the Peterson Center for International Economics, real American incomes are 9 per cent higher than they would otherwise have been due to attempts to liberalize trade since World War II.

Those gains come up in a variety of ways. Expanding production by exports of America's most innovative industries and goods increases U.S. revenues. Shifting demand to the most productive parts of our economy helps increase the average American worker's productivity and, with that, the income they earn. Investment is encouraged in our growing export markets, with the potential to serve a global market, and the increasing output scale helps to lower average production costs. These results are helping to increase the pace of economic growth in America. Additionally, imports improve customer preference and help to keep prices down, increasing consumer buying power

To America the possible economic gains from trade are far from being depleted. Approximately three quarters of the world's buying power and more than 95 per cent of global customers are beyond the boundaries of America. The analysis of the Peterson Institute also estimated that eliminating remaining global trade barriers would add another 50 percent to the benefits already enjoyed by America from trade. Trade remains a development driver for America. Negotiating more reductions in global barriers, and implementing current deals efficiently, are the tools to reap those additional benefits.

Rapid trade growth may well act as a transmitter of global economic stimulus and a driver of continued recovery, particularly if enhanced by additional efforts to reduce barriers and further expand trade opportunities. Recognition of the long-term benefits of increased trade and the positive role that trade can play in the ongoing economic recovery are main factors expressed in the Trade Policy of the Administration.