The global economy is struggling right now, and the best panacea is increased trade, a former Clinton administration official said Thursday during the U.S.-Mexico Border Summit at The University of Texas-Pan American.
Richard W. Fisher, Deputy U.S. Trade Representative through the second half of the Clinton administration, gave the luncheon address in place of Mickey Kantor, former U.S. Secretary of Commerce and U.S. Trade Representative, who was ill. Holding the rank of ambassador, Fisher's primary responsibility was to oversee Asia, Latin America and Canada, and he was chief operating officer of the U.S. government for the North American Free Trade Agreement.
In his remarks, Fisher said the global economy is not in good shape. Europe's economic growth is evaporating, with domestic demand for consumer goods and industrial machinery has come to a halt. Interest rates also are high, putting brakes on the region's economy.
"At this stage in our economic growth, we as a country cannot look to Europe as an engine of growth for the immediate future," Fisher said. "Asia looks very bleak, too."
Indeed, Japan's economy has become bogged down, and for the foreseeable future, "it is dead in the water and doing us (the United States) no good." Its situation affects the world, as it has the second-largest economy, with $4.4 trillion in output. Singapore, Thailand, Malaysia and several other countries in the region are sharing Japan's woes.
South America is facing a crisis. Argentina, Brazil, Venezuela, Colombia and Chile are experiencing negative economic growth.
And, the United States is not immune, either. Industrial production has declined for 10 consecutive months. Corporate profits are down 12 percent since September. The stock market is getting hammered.
In short, it's a cloudy situation, Fisher said, especially considering how interdependent nations have become.
"The United States is the key," said Fisher, adding trade accounts for 25 percent of the world's total output, double that of 25 years ago. "We have enormous weight in the global economic system. When we sneeze, the rest of the world catches a cold, especially Mexico and Canada, our NAFTA partners. And right now, if we're not sneezing, we're certainly wheezing."
Consequently, trade needs to be pursued and promoted, as it is "an engine of economic growth" that enhances transportation, education, living standards and more. And, the Border Summit is a good vehicle for ensuring its success among the United States, Canada and Mexico.
"We have a duty to keep this trade engine stoked up and steaming forward," Fisher said. "And we must do so now more than ever before because of the very stark economic environment we're in. The United States is more dependent on trade for its economic vitality than any other major trading bloc or country.
"And here at the border area, you are at ground zero," he continued, noting the United States will import more this year from Mexico than Japan. "Most of the trade with Mexico flows through Texas at different points along the border. That's why it's so important your discussions here during this impressive cumbre leads to real action."
Before becoming a U.S. Trade Representative, Fisher was managing partner of Value Partners Ltd. and Fisher Capital Management from 1987 through 1997. During this time, he served as adjunct professor at the LBJ School at The University of Texas at Austin, where he taught a second-year graduate-degree course in public policy. Introducing Fisher was longtime U.S. Congressman Kika de la Garza.
"In my 32 years in Congress, I had a chance to serve with many people," de la Garza said. "This is one person I enjoyed cooperating and working with. ... It's also a great privilege to welcome you to this Summit, and may it be the first of many."