Feb. 10, 2005
Misguided Trade Policies Driving Ballooning Deficit, Public Citizen Says
WASHINGTON, D.C. – Misguided U.S. trade policies are driving the ballooning trade deficit, said Public Citizen following the just-released U.S. International Trade in Goods and Services numbers from December 2004. According to these numbers, the U.S. trade deficit for goods and services in 2004 reached an unprecedented $617.7 billion – a nearly 25 percent increase over 2003. Imports increased nearly twice as much as exports, while the United States’ traditional surplus in services has been steadily shrinking, as has the traditional surplus in agricultural goods.
But what drove the numbers was the deficit in goods, which was particularly high at $666.2 billion, or 5.7 percent of national income, a post-World War II high. Nearly a quarter of that was due to trade with China, which grew 30 percent over 2003, while trade with NAFTA partners Canada and Mexico grew more than 20 percent from 2003 and represented almost 17 percent of the total deficit in goods.
While crude oil represented the largest single deficit item, the sharp increases in imports in consumer goods was also noteworthy, representing more than 25 percent of the total deficit. The latest numbers confirm that the United States is pursuing a disastrous and unsustainable trade policy.
“When your current trade policy has gotten you this huge, unsustainable deficit, doing more of the same, by expanding the NAFTA to six additional countries through the Central America Free Trade Agreement (CAFTA), is neither prudent nor likely to find favor among the public or the U.S. Congress,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.
“The staggering deficit total and its details – that the richest country on the planet is a net importer of advanced technology products such as computers and vehicles, while specializing in exporting scrap metal, soy and hides and skins; or that the U.S, is poised to become a net food importer – are what frame the looming CAFTA fight, because CAFTA is seen as a referendum on a decade of the NAFTA-WTO trade model,” said Wallach.