Since 2000 America’s manufacturing sector has been in a steep decline, with job losses outpacing those in many peer countries.
So what, then, explains the sudden relative steep increase in American manufacturing job losses during the 2000s? Does this simply reflect the vicissitudes of global financial markets? What really happened after 2000 was the rise in use of innovation mercantilist practices by many of our global competitors that were specifically designed to boost these countries’ domestic production at the expense of American manufacturers.
These trends were only exacerbated following China’s entry into the World Trade Organization in 2001, as the Chinese government created a specific innovation mercantilist policy framework, which has included currency and standards manipulation, local content requirements, and the forced transfer of intellectual property and technology as a condition of market access. This in turn ignited a subsequent global contagion effect, leading numerous other nations, from India to Brazil to Russia, to adopt similar innovation mercantilist policies which have further harmed the interests of American manufacturing.
At the same time, other competitors, such as Germany, have generally played by the rules of the global trade system yet have significantly boosted their efforts to implement science, technology, innovation, and industry-university collaboration policies throughout the 2000s, steadily bolstering the competitiveness of their manufacturing sectors.
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