Here in Washington D.C., the nation’s capital, we were drilled over the past few days to expect the snowstorm of the century. A minimum of 12 inches of snow were forecast and major anticipatory adjustments were taken. For example my health care office called to let me know about their closure – since the commute would be unbearable. Schools were closed (or on a ‘contingency’ basis), and even the visit of German Chancellor Merkel was postponed due to concerns about the plane and its landing.
The changing composition of U.S. trade
We have often heated discussions on trade policy shifts. To make reasonable arguments, we must consider that the fundamental composition of trade has been changing. For example, from the 1960s to 1990s, the trade role of primary commodities has declined precipitously while in parallel, the importance of manufactured goods has increased. This has meant that those countries and workers who had specialized in commodities such as rubber or mining typically fell behind those that had embarked on strengthening their manufacturing sector. With sharply declining world market prices for commodities and rising prices for manufactured goods, commodity producers were increasingly unable to keep pace. Some commodity-dependent countries realized temporary windfalls as prices of oil, wheat, and corn rose dramatically, only to watch them evaporate as prices dropped in 2009.