New Report Projects Shrinking Market For U.S. Imports
Implications “Enormous” for G-8 Talks, WTO, Developing Countries
For Immediate Release: July 11, 2006
Contact: Mark Weisbrot, 202-746-7264
Washington, DC: A new report released today by the
Center for Economic and Policy Research (CEPR) finds that U.S. imports,
measured in non-dollar currencies, are projected to decline over the
next decade. "A Shrinking Market: Projections for U.S. Imports " makes projections for the U.S. import market as the U.S. trade and current account deficits inevitably adjust.
"This has enormous implications for developing
countries and their policy decisions," said economist Mark Weisbrot,
Co-Director of CEPR and a co-author of the report. "With regard to the
various bilateral trade agreements now under negotiation, and even the
WTO - these projections indicate that many developing countries may be
making a lot of costly concessions in exchange for access to a major
market that may not be there for them."
Since 1994 the United States has provided a large
and growing market for the exports of a number of developing countries.
But it is widely recognized by economists that the U.S. trade and
current account deficits are not sustainable, and that an adjustment
will have to take place. This adjustment will dramatically reduce the
growth of U.S. imports.
In fact, the projections in this paper show the
annual value of U.S. imports can actually be expected to contract over
the next decade, when measured in non-dollar currencies.
The projections examine three different scenarios
for the future of the U.S. import market. In the most optimistic
scenario, the U.S. market for foreign goods and services will shrink by
$208 billion, or 9.5 percent over the next decade. In the middle and
low import scenarios, the value of imports is projected to shrink much
more over the next decade. In the middle-import scenario it shrinks by
$312 billion or 14.3 percent; in the low import scenario it shrinks by
$443 billion or 20.3 percent.
The G-8 (and G-7 previously) has long been concerned
with global economic imbalances, and the U.S. trade and current account
deficit has been a major focus of discussion at recent summits.
However, the impact of the inevitable adjustment on the ability of
developing countries to export to the United States has received little
The G-8, which meets this weekend, is also concerned
with re-starting the stalled negotiations for the Doha round of the
WTO. The projected shrinking of the U.S. import market is very relevant
to these talks as well, since increased access to the U.S. market,
which many assume will continue to grow, is an important part of what
these and also bilateral commercial agreements with the United States
have to offer developing countries.
To read the report, click here.
The Center for Economic and Policy Research is an independent,
nonpartisan think tank that promotes democratic debate on the most
important economic and social issues affecting people's lives. CEPR's
Advisory Board of Economists includes Nobel Laureate economists Robert
Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at
Harvard University; and Eileen Appelbaum, Professor and Director of the
Center for Women and Work at Rutgers University.