Thursday, November 11, 2010
Seoul summit
A major issue confronting the G-20 is how to craft a new global economic order to replace one centered on the U.S. running huge trade deficits while countries such as China, Germany and Japan accumulate vast surpluses. The U.S. runs a trade deficit because it consumes more foreign products than it sells to others.
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4 comments:
I think that trade deficits and trade surplus will continue to be the subjects of discussion in the years to come. With countries such as China, Germany and other developing markets having such a huge competitive edge in exporting, they will not likely to retreat especially when exporting makes up a huge portion of the economy. Similarly, it isn't easy for the U.S to start exporting and reduce imports of foreign goods when the labor costs here are so high.
Khoa is right. The subject will continue to be in the discussion. However, the US trade deficit will lessen or continue to grow depending upon Obama's effort to expand the US export sector.
I wonder when the US will ever have to pay the debt back. It seems a simple-minded question, but won't the financers of US consumption (China, etc.) want their money payed back eventually?
I think the main point of the summit is how to balance trades. An increase in exports will help the U.S get jobs back for its people. However, there are so many more things to it to make trades happen. Like U.S want South Korea to eliminate the ban on beef and South Korea want the U.S to eliminate tariffs on Korean cars. Both parties are doing the best they can for its people and there will always be conflicts. By the way, I think Germany is not a developing markets. It's a developed country.
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