The leaders of developing countries are moving aggressively to remove trade barriers, while the U.S. sits on the sidelines. Taiwan and China, for example, are pursuing a bilateral free-trade deal, and South Korea, China, and Japan have announced talks aimed at eventually producing a free-trade bloc among the three nations. The European Union later this year could ratify a trade agreement with South Korea that would lower tariffs on its exports to the Asian nation.
On Capitol Hill, meanwhile, a free-trade agreement with South Korea languishes; like similar agreements with Colombia and Panama, this trade deal is largely the victim of politically influential labor unions and their hold on leading House Democrats.
How does a multinational react to this stall-out of the U.S. on world trade agreements? Instead of abandoning the Asian and Latin American opportunity, big companies are finding ways around trade tariffs, often by moving jobs elsewhere.
