Explaining Commerce to the Commerce Secretary

As college students across the country begin their final exams, we are reminded of the unfortunate reality that much of what we learn in school or other parts of life willeventually be forgotten. Usually, this is more of a nuisance than a problem. A failure to recall the finer points of Shakespearean literature is unlikely to trouble most accountants, nor is a marketing specialist apt to lose sleep over lost the ability to define the Pythagorean Theorem. It ’s a bigger problem, however, when the Secretary of Commerce forgets some basic lessons of international trade.Appearing atan Atlantic Council event earlier this week, Commerce Secretary Wilbur Ross argued that the Korea-U.S. Free Trade Agreement (KORUS) should address the U.S. trade in goods deficit with South Korea. Despite the fact that economistsgenerally agree that the trade deficit is not a good indicator of a country ’seconomic performance—or as our colleagueDan Ikenson argues, is not a problem to solve —Secretary Ross thinks otherwise. In the context of president Trump’s recent visit to Asia, he stated the following:President Trump …underscored the need to rebalance the KORUS free trade agreement to reduce the substantial trade deficit that we have with Korea. That deficit has nearly tripled to $27.7 billion since KORUS went into effect. Among the most important reasons for the increased deficit has been the imbalance betwee n automotive imports and exports. Our automotive imports from Korea are almost ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs