It has become commonplace for public officials to claim that trade has contributed to job creation in the United States during the Clinton presidency. Others have claimed that up to one-third of all jobs created have been due to the growth in exports. From this, many people have inferred that the expansion of trade has had a positive affect on growth and jobs. This inference is incorrect. In fact, the effect of trade on growth and job creation during this expansion has been negative, not positive.
Trade includes imports as well as exports.
Looking at exports while ignoring the effects of imports is like trying to keep score in a baseball game by adding up the runs scored by one team and ignoring those scored by the other. If imports increase more rapidly than exports, as they have in this economic expansion, the net effect of trade will be to reduce growth and employment. Because of the expansion of domestic markets, however, overall economic growth and job creation has expanded despite the negative impact of recent trends in trade. The increase in each of the components of GDP is also shown in the first column. The growth in GDP is allocated to each of its components in the second column in the table, which calculates the share of GDP growth explained by each category of spending.