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Center for American Progress

NEW REPORT: Virtuous Circle – Strengthening Broad-Based Global Progress in Living Standards
Press Release

NEW REPORT: Virtuous Circle – Strengthening Broad-Based Global Progress in Living Standards

By Richard Samans, Jonathan Jacoby

Read the new report, here.

Washington, DC – As the next installment of the U.S.-China Strategic Economic Dialogue begins today in Beijing, the Center for American Progress releases a major report on globalization entitled “Virtuous Circle: Strengthening Broad-Based Global Progress in Living Standards.” CAP’s Richard Samans and Jonathan Jacoby argue that U.S. international trade, aid, and monetary policies today exhibit anything but a clear and common strategic focus. These policies appear to be chasing all manner of foreign and domestic priorities, and they lack an organizing principle that speaks directly to public concerns about the growing insecurity and inequality accompanying globalization.

“The best hope for transcending the polarization and caricature of the current trade and globalization debate is to ground it in a wider strategy to breathe additional life into a virtuous circle of strong, synergistic advances in median living standards at home and abroad,” they write. CAP publishes this paper as part of its Progressive Growth plan—a blueprint for the economic strategy of a new administration.

“Virtuous Circle” offers the next administration a coherent framework for reevaluating our nation’s international economic policies and a multifaceted action agenda designed to ensure that expanded trade and investment with developing countries drive strong increases in their living standards and domestic consumption, which in turn will generate additional demand for our own products and services to produce further improvements in our own living standards.

The United States must move from dialogue to action in our economic engagement with China and other middle-income countries. By utilizing the full toolbox of international economic policies, the United States should lead developed countries and multilateral institutions in creating incentives for these emerging market economies to shift from an export-led economic growth model to one driven more by domestic consumption. By introducing what we call the Roosevelt Consensus, we should help them pursue not only sound macroeconomic and open trade policies, but also the parallel construction of stronger safety nets and labor, environmental, consumer, and investor laws and institutions. By strengthening the institutions that will build a larger, more prosperous global middle class, the next administration will be able to show it has a plan to prevent a race to the bottom and transform it into a race to the top.

Read the new report, here.