Trade Gap Shrinks To $7.06 Billion Increased Exports Of Aircraft, Computer Parts Trims Deficit
The U.S. trade deficit posted its best showing in nearly two years, shrinking to $7.06 billion in November, as exports of aircraft and computer parts jumped sharply.
The trade gap with Japan also narrowed, giving President Clinton an election-year opportunity to claim success in tearing down foreign trade barriers.
The Commerce Department report Wednesday showed that the deficit in goods and services declined by 13.5 percent from a revised October deficit of $8.16 billion. It was the smallest imbalance since a $6.5 billion deficit in March 1994. The trade deficit is the difference between imports and exports.
Administration officials said the improvement showed the success of Clinton’s strategy of targeting countries such as Japan for hard-nosed negotiations aimed at boosting American exports.
U.S. Trade Representative Mickey Kantor said that the narrowing deficit was being driven by “an impressive increase in U.S. exports,” noting that goods exports in November were the second-highest on record.
“The president’s leadership, his economic plan, lower budget deficits and over 180 trade agreements, along with the productivity of U.S. workers, have contributed significantly to this trend,” said Kantor.
It was the fifth straight month that the trade deficit has declined, after hitting an all-time high of $11.39 billion in June. Even with the string of improvements, however, the deficit for the year in merchandise alone will still set a record of around $162 billion, surpassing the old mark of $152.1 billion set in 1987.
Conservative commentator Pat Buchanan and other Republican presidential candidates have made the soaring trade deficits a key point of their attack of Clinton’s job performance.
The November trade improvement reflected a big jump in sales of aircraft and computer parts as exports of capital goods climbed to a record level of $20.8 billion. Sales of military goods, including Patriot missiles to Saudi Arabia and helicopters to Greece, also were up sharply.
Private analysts cautioned against reading too much into the November improvement, saying it reflected in large part a sluggish U.S. economy, which dampened demand for imported goods.
“This is not the same as getting a big surge in exports. It is just that foreign producers are sharing some of our pain,” said Robert Dederick, chief economic consultant at Northern Trust Co. in Chicago.
Jerry Jasinowski, president of the National Association of Manufacturers, said the trade improvement reflected the lower value of the dollar, which makes American products more competitive overseas, and high productivity in American manufacturing.