Trade and Jobs in U.S. Manufacturing

Howard J. Shatz and

HJS

Howard J. Shatz Harvard University

Jeffrey D. Sachs

JDS

Jeffrey D. Sachs

Discussants: Alan Deardorff and

AD

Alan Deardorff

Robert E. Hall

Robert E. Hall Robert and Carole McNeil Joint Hoover Senior Fellow and Professor of Economics - Stanford University

DURING THE PAST 15 years, the U.S. economy has become increasingly integrated with the rest of the world. Among other trends, imports and exports have risen significantly as a percentage of U.S. gross domestic product. Many manufacturing sectors have shrunk in the face of stiff international competition; others have grown in response to strong international demands for U.S. exports. One of the notable features of this internationalization is the growing importance of trade with the developing countries. In 1978, developing countries accounted for 29.0 percent of U.S. manufactured goods imports. By 1990, that ratio had risen to 36.4 percent. Seven countries in East Asia (China, Hong Kong, Korea, Malaysia, Singapore, Taiwan, and Thailand), together with Brazil and Mexico, accounted for 79 percent of the increase in U.S. trade with all developing countries between 1978 and 1990.