Academic journal article Law and Policy in International Business , Vol. 25, No. 4
Think about what has happened in the last few years and how our world has changed. The Berlin Wall has come down and the Soviet Union has disintegrated. Market economies and democracies are on the rise all over the world. The U.S. and Russia no longer point their missiles at each other, and now the Ukraine does not point their missiles toward us as well. That is an amazing sea change in both our political and strategic concerns and it leaves us free to consider some critical areas, including trade, as we address the important area of our economic relations between nations. Now our economic security has become our national security, as the President has said. The way in which we interact with other nations in trade and our international economic dealings will have a profound effect on the building of market economies and democracies and whether or not we are going to pull together--or pull apart--in this world.
Just look at what has happened economically since the Second World War. From 1946 until the oil shock of 1973, we were the most dominant economy in the world. We were unrivaled in our ability to produce, be self-contained, build a growing middle class and sustain the American dream. We were able to open our markets to others in order to build up Japan and Western Europe as bulwarks against Soviet expansion and Communism. In fact, it worked. It was a very effective policy.
But in 1973 things began to change. In fact, because the policy worked, what has been called by many a tri-polar economic world developed. Japan, the European Union, later the European Community, and the United States became the three world economic powers.
In this post-Cold war era we are faced with the third great international trade challenge of this century. The first, after the first World War, we didn't meet. We closed up. We tried to close our markets to other countries, increase our wealth and deal with the roaring depression by closing down. It didn't work. In fact it was a disaster.
In 1946, after the Second World War, we did the opposite. We took on international responsibilities and we opened up. We grew not only our economy, but the economies of the western world. And that was something which we can be proud of and for which our parents and those who were our predecessors can take great credit.
Now we are faced with a third great challenge. And the questions for us, as the President stated at American University, another great school in this District, on February 26, 1993, is whether or not we are going to meet this challenge. But as we look at how we are going to meet this challenge, what are we faced with?
First, the U.S. economy depends more and more on trade. Twenty-six percent of our gross national product is trade, a total of $1.6 trillion dollars in goods, services and investment. Second, there is an increasing globalization of our economies. If you are going to go out and buy a car tomorrow, that car is going to be advertised by a British company probably, is going to have component parts made in Japan and the United States and Canada, and is likely to have other materials that come from Latin America or Asia in it.
We have become an interdependent economic world. And it will only continue. By understanding that our future is in taking advantage of this interdependence, we are going to open markets, expand trade, and build jobs here in the United States.
Market economies are building all over the world. Democracies are building all over the world. Look at Latin America and what has happened in just the last few years. Look at Chile with ten percent growth, four percent unemployment, a trade surplus, and a budget surplus. We would like to replicate these facts and figures here in the United States. Look at what is happening in China. Look at what is happening in Indonesia and Malaysia, and look at what is happening in Venezuela and Argentina. Economies with huge potential, growing very fast, opening up their markets, engaging in market economics, and growing democracies, something that of course we want to support. …