The U.S. economy is entering the second phase of a double-dip recession. Jobs losses have affected every sector of the economy – both white and blue-collar workers. Indeed, we are most likely at the brink of another Great Depression.

The unilateral open market policies adopted by the U.S. in the early 1980s encouraged the hollowing out of vast parts of the U.S. economy. Offshoring accelerated after the U.S. became part of NAFTA and the World Trade Organization.

The U.S. has had to borrow massive amounts of money from over seas and sell national assets rapidly to finance our enormous twin deficits: federal budget and national trade.

This is not working. We need to take an Emergency Time Out on Trade Pacts.

Under an agreement adopted by the WTO, we are completely within our rights to take a temporary time out from trade pacts. Countries within the WTO are allowed to restrict the number or value of imports permitted into their country in order to protect their financial sovereignty.

Not only is the U.S. allowed to take a time out from trade pacts, but it has done it before. In 1971, the U.S. took a time out to impose a temporary import surcharge to address the U.S. shifting from surplus to deficit – the first time this occured in the twentieth century.

The Emergency Time Out would be temporary, but would allow for changes to be made that would have a permanent impact.

An Emergency Time Out on Trade Pacts would allow the U.S. to eliminate tax discrimination against U.S. producers. Countries with a Value-Added Tax receive rebates on their exports, whereas the U.S., which has no VAT, does not receive similar treatment for its direct corporate taxes. The U.S. is losing money through this system.In 2007 alone, foreign exporters received $230 billion in rebates on goods sold in the U.S. while the U.S. spent $125 billion on exports to those foreign governments.

In 2007 alone, foreign exporters received $230 billion in rebates on goods sold in the U.S. while the U.S. spent $125 billion on exports to those foreign governments.
The U.S. needs to:

• Enact an equalizing duty that imposes an amount on foreign imports precisely equal to the VAT rebate foreign governments enforce and also provide U.S. exporters a tax rebate equal to the VAT imposed by foreign governments.
• Have Congress instruct the president to negotiate away the VAT disadvantage at the WTO during the Emergency Time Out, or agree to suspend U.S. WTO membership if the talks fail.

Renegotiate NAFTA

NAFTA needs to be changed. It does not benefit the American worker. In fact, it encourages our jobs to leave the country in pursuit of lower wage rates, non-existent environmental standards and trade without restrictions. In addition, NAFTA allows currency manipulation, does not have VAT offsets for the United States, lacks enforcement of existing provisions and exploits Mexican workers. NAFTA merits reconsideration and new provisions for everyone.

Crate a U.S. Jobs Initiative

The United States must create almost 30 million net new jobs over the next decade to avoid a stagnant economy with double-digit, permanent unemployment. This will require that the U.S. Government initiate several national projects on the scale of building the Interstate Highway System or putting an American on the moon.

The recommendations are:

• Create a national energy program that makes the United States independent of imported oil within a decade.
• Build a 21st Century infrastructure that rehabilitates and repairs the $2.2 trillion of existing domestic civil works and adds 21st century innovations.
• Create a Civilian Conservation Corps that can provide work for the millions of jobless young people rebuilding our deteriorating parks.

Confront China’s Mercantilist Economic Practices

China is breaking the global trading rules. During the Emergency Time Out the U.S. would be able to:

• Impose U.S. import tariffs on China to counter- balance its injurious currency manipulation and its theft of U.S. intellectual properties. Then reduce these tariffs when China ends its predatory actions.
• Tightly restrict China’s investments in U.S.
• Strengthen ‘Buy America’ laws and deny Chinese vendors access in the U.S. on the same basis U.S. vendors are denied in China.

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