The idea that countries need to be competitive in the global marketplace is a dangerous fallacy, and one held by many on both the left and the right. Paul Walker lays out the folly of this view much better than I could:
We don’t compete with other countries, this is a false analogy that comes from thinking that countries are like firms, they’re not. As Paul Krugman, in a different essay, put it A Country Is Not a Company. The point is that Coke and Pepsi, for example, do compete, one gains at the others expense, but New Zealand and Australia don’t, their loss is not our gain. International trade is not a zero-sum game. To see this, note that while Coke may wish to put Pepsi out of business, so that Coke can increase their sales and prices and therefore profits, New Zealand would not gain if we put Australia “out of business”.
Read the whole thing.