International Investment

In 2002, imports to the United States from developing nations totaled a whopping $317 billion. (The United States is the single largest market for developing nations' goods.) Exports from the U.S. to those nations totaled $130 billion. Both imports and exports are important, but look at the difference, that is, the trade deficit that resulted for the United States: $187 billion. That's 44 percent of the entire trade deficit that the United States ran last year with all nations.

In other words, with developing countries, the United States buys a good deal more than it sells. Consider a few examples. Last year, the Philippines sold exports worth $11 billion to the United States and bought American imports worth $7 billion, for a deficit (to the U.S.) of $4 billion. Malaysia's exports to the United States exceeded its American imports by $14 billion. For Korea, the surplus relative to the United States is $13 billion; for Brazil, $3 billion.

It may be surprising, but high technology is now the largest export sector for developing countries. Information and communications technology accounted for $450 billion worth of exports by developing nations -- compared with $235 billion for resource-based goods and $405 billion for low-tech goods.

Not only does the United States buy hundreds of billions of dollars worth of goods produced by developing nations, it also invests heavily in those countries. Roughly three out of every eight dollars in foreign direct investment in Africa comes from the United States -- more than from any other country (France is second at 18 percent -- less than half as much). Between 1996 and 2000 (latest figures), the United States invested $9.2 billion in Africa, compared with $4.4 billion invested by France an...

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The benefits of international trade and investment are today more widely accepted around the world than at any time in recent history. At the government level, faith in these benefits has encouraged many countries to adopt international economic policies that promote greater trade and investment. A key feature of these international economic policies is a commitment to reducing global barriers to trade and investment.

For countries that have adopted international economic policies that promote greater trade and investment, such as joining the WTO or unilaterally reducing trade barriers, evidence suggests that this has generally boosted economic growth and income. For example, according to the Office of the U.S. Trade Representative, from 1994 to 2000 increased exports accounted for approximately one-fifth of U.S. economic growth,