Trade Deficit Narrows Slightly
Tuesday, June 20th 2000, 12:00 am
By: News On 6
WASHINGTON (AP) â€” America's trade deficit, after setting records every month this year, finally posted a small decline to $30.4 billion in April as imports fell for the first time in 15 months.
Even with the overall improvement, the imbalance with China widened and the deficit with Japan set a record.
The Commerce Department said Tuesday that the small, 0.4 percent decline from a record-high trade imbalance of $30.6 billion in April reflected in large part a drop in crude oil prices after nine consecutive monthly increases.
Even with April's improvement, the deficit for the first four months of this year is running at an annual rate of $350 billion, far surpassing last year's record deficit of $265 billion.
In a second report, the government said the broadest measure of trade, the current account, climbed to a record of $102.3 billion in the first three months of this year, up 6.3 percent from a $96.2 billion deficit in the fourth quarter of 1999.
The current account includes not only trade in goods and services, which are contained in the monthly figures the government releases, but also investment flows and foreign aid payments.
On Wall Street, the Nasdaq index had gained 60 points by late Tuesday morning, pushing above 4,000 for the first time since April and continuing a gradual recovery from the steep selloff that knocked it as much as 37 percent below its record high. The Dow Jones industrial average was down 35 points.
The soaring trade deficits are the major flaw in an otherwise remarkable U.S. economy, now in a record 10th year of uninterrupted growth that has driven unemployment rates to their lowest levels in three decades.
The Clinton administration contends the deficit reflects the gap between America's remarkably strong economic performance and slower growth overseas.
But critics say the deficits represent a failure of the administration's trade policies, which they contend have left American workers at the mercy of foreign nations with lower labor costs and lax environmental standards.
President Clinton is pushing Congress for approval of a landmark trade agreement with China, which he contends will open the world's largest market to American exporters.
Labor unions, fighting the measure, argue that Congress should hold on to its annual review of China's trade privileges as leverage to get the country to improve its worker and human rights policies. The House approved the China legislation last month but the Senate has yet to act.
For April, the deficit with Japan hit an all-time high of $7.3 billion, up 7.4 percent from March. Imports from Japan had hit an all-time high in March and were down only slightly in April.
The deficit with China rose 14.7 percent to $5.8 billion and for the first four months is running 22.6 percent above the levels of a year ago.
America's deficit of $3.9 billion with Canada, its largest trading partner, was the second highest level on record.
The slight $168 million narrowing in the overall trade deficit reflected a 0.2 percent decline in imports to $117.1 billion, the first decline in imports since December 1998.
Exports of goods and services were off a tiny 0.03 percent to $86.7 billion with the weakness confined to services, which includes such things as airline tickets and copyright payments. Exports of goods were up slightly to a record $62.6 billion, reflecting a big jump in airline sales and strong increases in American exports of telecommunications equipment and computer accessories.
The slight drop in imports reflected a 7.1 percent decline in energy imports which dipped to $9.02 billion. Crude oil prices, after rising for nine straight months, fell to $24.42 per barrel in April, down from $26.38 in March.