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After the Meltdown: Is Globalization Still Good for America?

Business globalization, foreign direct investment, and financial activities will all help pull the United States out of recession.

5/27/2010
Is globalization still good for the U.S. economy? Jonathan Huneke, vice president for communications of the United States Council for International Business, said it is in an April speech to the Alaska World Affairs Council.

While GDP growth is recovering, unemployment levels are still climbing. Globally, the United States and Japan show the strongest signs of recovery, while China's growth is slightly stalling, and Europe is showing slow signs of a rebound. There's still a possibility for a double dip or W-shaped recession, but economist Robert Samuelson outlines positive signs that may dispute these predictions.

As of April, the United States added 162,000 nationwide, the greatest jump in three years. Companies have more cash than before the credit crunch. And more CEOs plan to expand their work forces over the next six months than to lay workers off.

The Council, which represents approximately 300 U.S. multinational corporations, global law firms, and industry associations, promotes open markets, competitiveness and innovation, sustainable development, and responsible business practices. It's also in support of President Obama's aggressive exports policy, as well as ratification of free trade agreements with Korea, Panama, and Colombia.

Foreign direct investment will be critical during this recovery period. In a study by Dartmouth Tuck School of Business Professor Matthew Slaughter, multinational corporations were not found to negatively affect the domestic economy through outsourcing or other practices. In fact, multinationals account for 20 percent of domestic employment, 25 percent of domestic output, 30 percent of capital investment, 45 percent of exports, and 75 percent of domestic research and development.

Overall, Huneke says harnessing FDI and foreign markets should be used to recoup jobs lost during the recession and bring back a robust business climate.

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