The United States is part of a global economy. We buy goods from and sell goods to other countries. Foreign companies operate here, and American firms have operations overseas. The U.S. position on questions of trade, finance, and monetary policy are important to institutions like the United Nations' World Bank and International Monetary Fund (IMF). The World Bank provides loans and technology assistance for economic development projects in member states, and the IMF seeks to promote international monetary cooperation, currency stability, and international trade.
International Economic Policy
In recent years, the principal international economic issue for the United States has been trade. The Office of the U.S. Trade Representative within the Executive Office of the President is responsible for developing and implementing the nation's trade policy. The U.S. Trade Representative, who holds cabinet rank, is the principal advisor to the president on trade issues. The United States has helped negotiate many different sorts of trade agreements over the years, to ensure continued access to foreign goods and open markets abroad for goods manufactured in the United States. The General Agreement of Tariffs and Trade (GATT), for example, was created after World War II to provide a forum for negotiating international agreements based on free trade principles. It has been superseded by the World Trade Organization (WTO). Through these negotiations, the United States has tried not only to keep foreign markets open but also to ensure that other countries respect patents on American products.
The North American Free Trade Agreement (NAFTA), which Congress ratified in 1993, established a free-trade zone between the United States, Canada, and Mexico. The agreement triggered a major public debate in the United States over its benefits and drawbacks. Organized labor strongly opposed NAFTA, arguing that Mexico's extremely low wages would encourage manufacturers to move their plants to the other side of the border. There were also concerns about the effectiveness of Mexican environmental control and occupational safety laws. H. Ross Perot made opposition to NAFTA the cornerstone of his independent run for the White House in 1992, as did Pat Buchanan in later presidential campaigns. But American policy leaders in both major parties still appear committed to free-trade principles.
Another regional example is the Dominican Republic-Central America-United States Free Trade Agreement (2005) or CAFTA-DR. Its goal is to eliminate tariffs and promote market access for the participants, which include Costa Rica, the Dominican Republic, El Salvador, Guatemala, Nicaragua, and the United States.