This week sees the inaugural World Trade Week UK, which aims to highlight the importance of global trade in creating jobs and growth during these difficult economic times. It’s an idea that draws heavily on FDR’s 1933 initiative to designate the third week of May as National Foreign Trade Week, following up on the promise in his Inaugural Address to ‘spare no effort to restore world trade by international economic readjustment’. Actually it is surprising to look at the full text of FDR’s language on international trade in the Inaugural Address, where he sees international trade relations as secondary to national economic recovery - as if the two are somehow separate challenges.
In advance of World Trade Week UK our Ambassador, Nigel Sheinwald, gave a major speech on trade in Baltimore last week. The speech underlines our on-going concerns about the risks of the global economy being compartmentalised into national boxes. To take one example, we have been hearing from a number of British companies worried about how the Buy American provisions in the fiscal stimulus are being applied. Under the terms of the Congressional legislation, British companies and goods should not be affected by Buy American in most states because the UK has signed the Government Procurement Agreement. However it seems that many local decision-makers think that they heard Congress say ‘Buy American. Period.’ As the speech sets out, we have no Buy British equivalent in government procurement rules in the UK and American companies get a substantial portion of government contracts.
There will be a major international conference on trade in London this week, featuring, among others, Paul Krugman, Jagdish Bhagwati, Lord Mandelson and EU Trade Commissioner Cathy Ashton. Friday afternoon we taped an address by Deputy USTR Demetrios Marantis to the conference.
It will then be interesting to see the US’s trade data for April which comes out on Tuesday. There were some signs of recovering transatlantic trade volumes in the March data - though the only press angle seemed to be the on-going obsession with the size of the trade deficit. Let’s hope for some more green shoots.