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MSCI's Position on Trade & Currency

A century ago when MSCI was founded, most metal service centers were located within a day’s travel of their customers. Today, our members’ supply chains and customers are global. As a nation and as an industry we must embrace the benefits of international trade, but our leaders must ensure our trading partners play by an established set of international rules, including currency rules. Policymakers must foster strategic trading relationships and free and fair trade agreements that encourage U.S. partners to play by those rules, but also allow for expedient and efficient legal action when they are violated.

Opening new markets and building supply and sourcing opportunities is vital to the competitiveness and growth of the North American manufacturing economy.  Ninety-five percent of the world’s consumers live outside the United States. Trade with foreign nations breeds economic growth, creates well-paying jobs at home and raises workers’ standard of living—as long as there is a level playing field. Failure to confront countries that violate international trade rules reduces employment at home and erodes the United States’ reputation abroad.

Policymakers must –

  • Open new markets to North American products.
  • Enforce and strengthen current laws and agreements that are meant to prevent and combat unfair trade practices, including currency manipulation.
  • Address unfair trade practices through legal action when necessary.

Trade & Currency Issues MSCI is Acting On

Trade creates new jobs and fosters economic growth in the United States by opening up new markets to American-made products. According to the U.S. Department of Commerce International Trade Administration, 47 percent of U.S. goods exported in 2014 were sent to countries with which the United States had free trade agreements (FTAs). In 2014, merchandise exports to the U.S.’s 20 FTA partners increased four percent to $765 billion. The United States also ran a manufacturing trade surplus of $55 billion with our FTA partners in 2014. However, for U.S. businesses and their workers to gain the full benefits of trade, FTAs with other countries must be fair. These pacts must break down existing barriers to trade and ensure U.S. trading partners play by the same set of rules American manufacturers do.

Relevant Links
Free Trade Agreement Articles from Edge and Connecting the Dots

Currency manipulation by other countries puts U.S. manufacturers at a competitive disadvantage globally, costing the United States jobs and lost economic growth. Economist Arthur Laffer has said, “The two-speed recovery has shown … that persistent currency undervaluation has benefitted the currency manipulators at the expense of countries allowing the flexible adjustment of exchange rates ...” Laffer estimates that, as of 2012, the scope of currency manipulation was $1.5 trillion per year. Laffer joins the Economic Policy Institute (EPI) in calling for strong efforts to combat currency manipulation. The EPI estimates ending currency manipulation would reduce the United States’ overall trade deficit by $200 billion to $500 billion over three years and would increase annual U.S. gross domestic product by $288 billion to $720 billion. The lower trade deficit and higher growth would create 2.3 million to 5.8 million new jobs.

Relevant Links
Currency Manipulation Articles from Edge and Connecting the Dots
Trade and Currency Articles from Edge and Connecting the Dots