[Excerpt] The 112th Congress has a full legislative and oversight agenda on international trade. The agenda may include considering legislation to implement pending free trade agreements with Panama, South Korea, and Colombia, enhanced enforcement of U.S. trade agreements, as well as oversight of the World Trade Organization's Doha Round and trade relations with China. This report provides information and context for many of these topics. It is intended to be read primarily by Members and staff who may be new to trade issues.
This report is divided into four sections in a question-and-answer format: trade concepts, U.S. trade performance, formulation of U.S. trade policy, and trade and investment issues. Additional suggested readings are provided in an appendix.
The first section on "Trade Concepts" deals with why countries trade, the consequences of trade expansion, and the relationship between globalization and trade. Key questions address the benefits of specialization in production and trade, efforts by governments to influence a country's comparative advantage, how trade expansion can be costly and disruptive to workers in particular industries and skill categories, and some unique characteristics of trade between developed countries.
The second section, on trade performance, focuses on the U.S. trade deficit and its impact on industries. Several questions address the causes of trade deficits, the role of foreign trade barriers, and how the trade deficit can be reduced. In terms of business impacts, the questions focus on which U.S. industries appear to be the most and least competitive, and on the relative size of the manufacturing sector.
The third section deals with the roles played by the Executive Branch, Congress, the private sector, and the Judiciary in the formulation of U.S. trade policy. Information on how trade policy functions are organized in Congress and the Executive Branch, as well as the respective roles of individual Members and the President, is provided. The formal and informal roles of the private sector and the involvement of the Judiciary are also covered.
The fourth section, on U.S. trade and investment policy, asks questions related to trade negotiations and agreements and to imports, exports, and investments. The justification, types, and consequences of trade liberalization agreements, along with the role of the World Trade Organization, are treated in this section. The costs and benefits of imports, exports, and investments are also discussed, including how the government deals with disruption and injury to workers and companies caused by imports and its efforts to both restrict and promote exports. The motivations and consequences of foreign direct investment flows are also discussed.