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Introduction
With the globalization of markets, the North American Free Trade Agreement (NAFTA), and the new World Trade Organization (WTO), the U. S. has entered into a new era of international trade. Because of the global economy, many U.S. businesses have developed new international trade policies to remain on the cutting edge of global competition. Traditionally, the U. S., in comparison to other countries, has not depended on international trade for its survival. However, today, the U. S. is promoting more and more international trade in an effort to remain competitive in a global economy. The purpose of this paper is to examine the role of U.S. trade in a global economy. The paper analyzes the trends of U. S. trade with our major trading partners, Mexico, Canada, and Japan in the 1980s and 1990s. It also compares the nature of U. S. trade with our major trading partner groups and the major economic blocs in Western Europe (France, Germany, Italy, United Kingdom and others), Asia (China, Hong Kong, Korea, Singapore, and Taiwan) and Latin America (Brazil, Venezuela, Mexico, and other countries in the Western Hemisphere). The paper reviews the nature of U.S. exports and imports as well as the U.S. trade deficit problem. The paper assesses the role of U. S. direct investment abroad and foreign direct investment in the U.S. as well as future trade policy implications for the U. S.
US. Trade with the World
Traditionally, international trade has not played a vital role in the U.S. economy. Because of the changing nature and dynamics of the world economy, international trade is becoming quantitatively more important for the U. S. Among the economic indicators used to examine the role of U. S. trade in the world economy is the relative representation of exports of goods and nonfactor services relative to Gross Domestic Product (GDP). Exports of goods and nonfactor services include merchandise, freight, insurance, and travel services. According to the 1993 World Development Report, only 6 percent of the U. S. GDP was attributed to exports of goods and nonfactor services in 1970; but, by 1991, more than 11 percent of the U. S. GDP was attributed to exports of goods and services. In comparison to other countries, international trade in...