*EPF504 02/18/00
1999 U.S. Trade Deficit Sets All-Time Record
(Deficits with Japan, China, Canada, Mexico, EU set records) (1060)
By Merle D. Kellerhals, Jr.
Washington File Staff Writer
Washington -- The U.S. trade deficit soared to an all-time high of $271,310 million in 1999, led by deficits in goods and services with Japan, China, Canada, Mexico and the European Union (EU), the Commerce Department says.
The 1999 deficit rose 65.15 percent from a 1998 deficit of $164,282 million, the previous record, the Commerce Department reported February 18. The last record trade deficit was in 1987 when it totaled $152,753 million.
The trade deficit widened because of strong U.S. domestic consumption, sluggish foreign growth and a strong dollar against the euro and yen. The 1999 year-end trade deficit also reflected the continued effects from the 1997-98 global financial crisis, which pushed some previously high-growth countries into recession and caused the value of their currencies to decline, making imports more expensive.
"The American economy just ended its fourth consecutive year of exceptionally strong growth," said Commerce Chief Economist Lee Price. "Meanwhile, most of the major markets for U.S. exports have gone through a couple of years of sluggish growth, if not recession."
Price said the 33.7 percent increase in world oil prices during 1999 -- which climbed from $9.19 a barrel in January to $22.67 by December -- "also contributed importantly to [the] 1999 trade deficit." The U.S. deficit in petroleum goods rose to $59,000 million in 1999 from $43,000 million 1998, he said.
"In addition, the rise in the value of the dollar increased the attractiveness of imports and dampened the incentives to buy our exports," he said. "Changes in the value of the dollar tend to influence trade flows with a significant lag."
Price said that as a share of the U.S. gross domestic product, the trade deficit rose to 2.9 percent, up from 1.9 percent in 1998 but below the record for a year of 3.2 percent set in 1987.
U.S. exports fell in industrial supplies and materials, foods, feeds, and beverages, but increased in semiconductors and electrical apparatus, automotive vehicles, parts and engines, and consumer goods.
U.S. imports increased in passenger cars and trucks and buses, capital goods, consumer goods, industrial supplies and materials, and foods, feeds and beverages.
Trade deficits with the United States' major trading partners continued to widen in 1999, the Commerce Department reported. Deficits widened 15.47 percent with Japan to $73,920 million, 20.62 percent with China to $68,668 million, 92.72 percent with Canada to $32,095 million, 44.05 percent with Mexico to $22,841 million, and 59.88 percent with the EU to $43,723 million.
"We saw marked recoveries in a number of Asian countries, faster growth in Canada and Mexico and a small pickup in the pace of European growth," Price said. "At the same time, our imports continued to grow strongly during 1999, largely reflecting the strong demand in the U.S. economy."
For December, the trade deficit narrowed 5.7 percent to $25,548 million from a revised November deficit of $27,103 million.
Exports of services in 1999 were up $11,800 million to $275,470 million from the previous year's total $263,661 million. Increases occurred in business, professional, technical, financial services, travel, other transportation, passenger fares, and royalties and license fees. Transfers under U.S. military sales contracts fell $600 million.
Imports of services rose in 1999 by $18,600 million with increases in nearly all categories.
Following are some key figures:
U.S. GOODS AND SERVICES EXPORTS, IMPORTS AND TRADE BALANCE
Millions of dollars, on a balance of payments basis, seasonally adjusted
Trade
balance Exports Imports
Jan.-Dec. 1998 -164,282 933,907 1,098,189
Jan.-Dec. 1999 -271,310 958,491 1,229,802
December 1998 -14,241 78,161 92,402
December 1999 -25,548 85,173 110,722
U.S. GOODS EXPORTS, IMPORTS AND TRADE BALANCE
Millions of dollars, on a balance of payments basis, seasonally adjusted
Trade
balance Exports Imports
Jan.-Dec. 1998 -246,932 670,246 917,178
Jan.-Dec. 1999 -347,130 683,021 1,030,152
December 1998 -21,059 56,005 77,064
December 1999 -31,472 61,739 93,212
U.S. SERVICES EXPORTS, IMPORTS AND TRADE BALANCE
Millions of dollars, on a balance of payments basis, seasonally adjusted
Trade
balance Exports Imports
Jan.-Dec. 1998 82,650 263,661 181,011
Jan.-Dec. 1999 75,820 275,470 199,650
December 1998 6,818 22,156 15,338
December 1999 5,924 23,434 17,510
U.S. GOODS EXPORTS, IMPORTS AND TRADE BALANCE, BY COUNTRY
IN 1999 Millions of dollars, on a Census basis, not seasonally adjusted
Bilateral 1999 1999
balance exports imports
Total -330,022 695,009 1,025,032
North America -54,936 253,094 308,030
Canada -32,095 166,229 198,324
Mexico -22,841 86,866 109,706
Western Europe -47,418 165,753 213,171
Euro Area -38,315 106,356 144,671
European Union -43,723 151,645 195,368
Austria -323 2,588 2,910
Belgium 3,177 12,385 9,208
Finland -1,242 1,668 2,910
France -7,071 18,838 25,910
Germany -28,305 26,789 55,094
Italy -12,344 10,094 22,438
Netherlands 10,939 19,412 8,473
Spain 1,076 6,132 5,055
Sweden -3,872 4,239 8,111
United Kingdom -853 38,338 39,191
Other EU -4,906 11,163 16,069
European Free Trade
Association -4,116 10,111 14,227
Norway -2,612 1,440 4,051
Switzerland -1,232 8,365 9,596
Other EFTA -273 307 580
Other Western Eur. 421 3,997 3,576
Eastern Europe, Former
Soviet Reps. -6,025 5,658 11,684
Hungary -1,389 503 1,892
Poland 12 825 813
Former Sov. Reps. -4,123 3,289 7,412
Russia -3,960 1,845 5,805
Other FSR -163 1,444 1,607
Other Eastern Europe -525 1,041 1,567
Pacific Rim -186,684 173,704 360,389
Australia 6,520 11,811 5,290
China -68,668 13,118 81,786
Japan -73,920 57,484 131,404
Newly Industrialized
Countries -24,211 70,969 95,180
Hong Kong 2,116 12,647 10,531
South Korea -8,308 22,954 31,262
Singapore -1,941 16,246 18,188
Taiwan -16,077 19,121 35,198
Other Pacific Rim -26,405 20,324 46,729
South/Central America-3,182 55,199 58,381
Argentina 2,340 4,939 2,599
Brazil 1,935 13,249 11,314
Colombia -2,744 3,532 6,276
Other S/C America -4,714 33,479 38,193
OPEC -21,707 20,124 41,831
Indonesia -7,575 1,939 9,514
Nigeria -3,733 628 4,361
Saudi Arabia -336 7,902 8,237
Venezuela -5,896 5,373 11,269
Other OPEC -4,167 4,282 8,449
Other countries -23,697 28,366 52,063
Egypt 2,408 3,025 617
South Africa -613 2,582 3,195
Other -25,493 22,758 48,250
NOTE: Data on a Census basis reflect movement of goods into and out of the United States through U.S. Customs Service stations. Balance-of-payments basis data adjust Census data to include products that bypass Customs, such as exports of military aircraft and imports of electricity from Canada.
(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Website: usinfo.state.gov)
NNNN