American small businesses are declining.  Over a decade ago, the percentage of small business stood at 57%.  In today’s market, small firms make up just over 53%.  Although not a huge decline, the decrease in percentage is important when discussing job creation.  Less small businesses means less jobs for Americans.

Globalization is a big reason for this.  Jobs are being shipped overseas with most never returning.  Trade deals have alot to do with this, making jobs easier to ship overseas for large corporations.  Still, Americans think solving globalization is way simpler than it actually is.

I get it, America is the greatest country in the world, at least that’s what we as Americans believe.  But when reading over a recent The Hill article discussing a theory known as “trade equilibrium”, I couldn’t help but shake my head.  Trade Equilibrium as two goals “(a) to stop exporting of additional American jobs, and (b) to regain the American jobs already exported, by legally requiring the dollar/trade surplus countries to eliminate their surplus over a ten-year period by buying American products.”  This sounds good in theory but just doesn’t work practically.

For starters, if foreign countries are mandated to buy American products, won’t they mandate that American’s buy their products as well?  In fact that already occurs with larger trade partners such as China and the EU.  Small countries aren’t in much of a financial position to make broad purchases that would have significant deficit impacts, but I understand why someone would support this theory I guess.  

Secondly, and more importantly, how would you guarantee countries are buying products from small businesses?  With regulations for global trade at ridiculous heights, many small businesses struggle to meet requirements.  If these deals were made, similar issues would arise that we see with globalization today, i.e., big businesses gaining even more profit.  In order to track that businesses are adhering to these new rules, you’d have to create a new governing body within the US government to track that countries are spending money with American organizations…..which means even more regulation for American businesses!

As much as we want to, globalization and the loss of American jobs can’t be fixed in a 5 paragraph article.  The global economy is extremely complex and jobs are hard to bring back once large trade deals are enacted. Take NAFTA as an example.  "The U.S. Chamber of Commerce credits NAFTA with increasing U.S. trade in goods and services with Canada and Mexico from $337 billion in 1993 to $1.2 trillion in 2011, while the AFL-CIO blames the agreement for sending 700,000 American manufacturing jobs to Mexico over that time.“  America valued profit above all else when creating the trade deal, but it cost Americans jobs in the process.  The "trade equilibrium” is similar in that it could bring additional profit, but it doesn’t guarantee job creation at all.