In the midst of the current economic crisis, recovery at home will naturally be the focus of the new president, but the United States cannot prosper if the rest of the world lags behind. Nor can Americans be safe in a world where economic instability turns fragile states into failed states that harbor terrorists, drug traffickers, or communicable diseases. It is crucial in responding to the situation that the United States avoids beggar-thy-neighbor policies, such as new trade barriers, that ultimately leave everyone worse off. Beyond just saying no to new protectionism, the new administration has an opportunity to send a clear signal that that it is serious about trade for development.
In a new policy memo (opens a new window) sent to President-elect Obama, key members of his trade, economic and foreign policy teams, and congressional leaders, I recommend that the United States act as quickly as possible to fully open the American market to the goods of the poorest and most vulnerable countries. These are countries that are being hammered by a financial and economic tsunami that they had no role in creating. The Millennium Development Goals call on the rich countries to provide “duty-free, quota-free” access for all least-developed countries and U.S. negotiators already committed in 2005, as part of the Doha Round of multilateral trade negotiations, to provide such access on 97 percent of products from these countries.
The policy memo suggests expanding on these commitments in ways that can make a world of difference to poor people in these countries, at virtually no cost to U.S. jobs. It calls for the United States to provide access for all products from a somewhat broader list of the poorest and most vulnerable countries, and to do so without waiting for the completion of the Doha Round. It also proposes making this new and improved preferences program permanent, so that investors are not deterred by uncertainty about its status.