This week, President Trump is scheduled to head to the 2018 World Economic Forum in Davos, Switzerland. The U.S. leader may seem an unlikely guest — Davos brings together the world's political and economic elite for what is generally viewed as a celebration of globalization.
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The paper, which was first reported by Reuters, does not mention Trump by name. It does, however, state that these narratives have emerged in “the United States as well as elsewhere” and that the current U.S. “administration is seeking to reduce the trade deficit by renegotiating U.S. trade agreements and adopting more protectionist U.S. policies.”
In all of Trump's foreign policy, his distaste for what he views as “bad trade deals” may be one of the most consistent positions. The president has criticized not only multilateral trade deals such as the North American Free Trade Agreement or the Trans-Pacific Partnership, but also bilateral deals with allies, such as the free-trade agreement with South Korea. Trade deficits, such as the sprawling gap that exists in trade with China, are a particular subject of ire for the Trump administration, too.
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For example, the paper states that it is a misconception that bilateral trade between two nations should be balanced. “If a bilateral free trade agreement allows a country to meet more of its needs by importing at lower costs from a particular partner, it will benefit,” the authors write, “even if the value of these increased imports exceeds the value of the exports that it sells to that partner.”
The paper also takes aim at the idea that trade deficits result in job loss. “While in theory the relationship between imports, trade deficits, and employment and growth could be positive or negative, in practice in the United States, rapid import growth and larger trade deficits have been associated with faster employment growth,” the authors note.