But one product of that conference – fixed exchange rates – turned out not to be all that good for the US, as it contributed to the precipitous decline of America’s share of global manufacturing value-added, from 55 per cent in 1953 to 24 per cent in 1970. The 1985 Plaza Accord – whereby the US convinced the rest of the G5 (Japan, West Germany, France and the United Kingdom) to help weaken the dollar – succeeded in shrinking America’s external trade deficit. But these gains were eroded in 1994, when the North American Free Trade Agreement (NAFTA) went into effect, and obliterated after 2001, when China’s accession to the World Trade Organisation opened the floodgates for Chinese goods to pour into the US market.
Published at: 2025-05-27 22:00:00
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