Commodities Markets Given the price of crude oil and the food shortage, I thought it was time to look at the commodities markets. Commodities markets have been regulated since the 1920s. However, the passage of the Commodities Futures Modification Act in 2000 deregulated much of the market. It led to the Enron debacle in 2001 and many blame the high price of food and gas on the deregulation.
The Trade Deficit The United States has, for many years, been trading with other countries in such a way that leaves us with a trade deficit, one that is consistently growing. Currently, the trade deficit is approximately 5.37% of the GDP, which is widely considered to be unsustainable. The problems are many and a multi-pronged solution will be necessary in order to resolve it. The Issue Wonk believes that increasing domestic saving and investment is the key.
The World Trade Organization The World Trade Organization (WTO) is an international organization with a stated aim of promoting free trade and stimulating economic growth among its members. There are currently 149 members and approximately 30 trade agreements, the most well-known of which is The General Agreement on Tariffs and Trade (GATT). This article sets out the structure of the WTO and some of its better known agreements.
U.S. Trade Policy The U.S. government attempts to manage the economy in part through managing trade with other countries. Tools include tariffs, quotas, and subsidies. A very brief history of U.S. trade policy indicates that the current debate over how to manage trade is much the same as it was at the inception of the Republic. Today the argument is over Free versus Fair Trade. Balance of trade refers to the relationship between exports and imports. In general, a trade surplus is more desirable than a trade gap. However, in times of economic expansion, a trade gap may be desirable.