I have been asked to discuss consumer interests in the world trading system following the Seattle WTO Ministerial. One thing is as true after Seattle as before. We are able to sustain such high living standards, in part, because Americans engage extensively in international trade.
Imports stretch tight household budgets.
However, the full trade liberalization story, particularly the import side of it, rarely seems to get its due in most countries. Consumers in Japan pay 134 percent more for food than American consumers and EU consumers pay fully one third more. These large discrepancies reflect in large part the fact that we enjoy tariffs on agricultural products that are only one fifth the average in the rest of the world. Foreign competition creates incentives for U.S. businesses to price their products more competitively. Economists think these factors are an important part of the story underlying the strength and resilience of the current economic expansion.