International trade and a possible recession here in the US

Bipartisan international trade agreement and possible recession in the US as a result


Congress and the White House have reached an agreement of international trade policy. House speaker Nancy Pelosi announced that this bipartisan deal aim to put labor and environmental standards at the center of international trade agreements. The new plan is said the lower the effects globalization has on poor nations such as Mexico with its many maquiladora factories and hazardous working conditions for mostly women laborers. Labor needs to be the center if trade debates because labor is always suffering as a result of trade agreements. Women at maquiladora factories travel on foot for 1-2 hours to work for American companies, where they’re required to handle dangerous chemicals for about $6 per day, and no health benefits. In most southeast Asian countries like Taiwan, Indonesia, Singapore and India in similar working conditions, wages were about $3 per day 2-3 years ago, and in some of those countries today workers are being paid $ 2 per day. US trade policy needs to try to correct this trend.


Alan Greenspan, former Chairman of the Federal Reserve (now it’s Ben Bernanke) a sifnicant possibility that the economy of the United States would fall into a recession this year. Earlier this year Greenspan shocked the markets when he first made this announcement, but just recently added on the one-third chance of the recession happening.

There has been a lot of concern in international political economics about the rise in Chinese currency as a result of the large amount of resources flowing into the country (i.e. labor/employment, outsourcing from Europe and other western nations). Their currency is also increasing due to their many international investments, especially in the US. One example is that US took out several billions of $ in loans to pay for reconstruction of New Orleans from China a few years ago. China’s increased role in the US economy (along with a huge increase in foreign investments in the past few year from several countries) , was discussed in Congress last week, and rightly so. Investments from China in the US and American companies outsourcing to China could pull down worker productivity, probably not by much because the US is still the largest economy in the world.

http://money.cnn.com/2007/05/10/news/economy/trade_agreement.reut/index.htm
http://money.cnn.com/2007/05/11/news/newsmakers/greenspan.reut/index.htm