America's deficit in the broadest measure of
trade surged to an all-time high of $338.9 billion last year, more
than $100 billion higher than the deficit for 1998.
The Commerce Department said today that the deficit in the
current account, which measures not only trade in goods and
services but also investment flows and foreign aid payments, was up
53.7 percent from the previous record, a $220.6 billion imbalance
in 1998.
The current-account trade deficit set records in all four
quarters, closing out with a record $99.8 billion imbalance in the
fourth quarter. That was 11.1 percent above the $89.1 billion
deficit in the third quarter of last year.
The huge, $118.4 billion deterioration in the current-account
deficit demonstrated dramatically that the one blot on an otherwise
remarkable U.S. economic performance is in trade.
The rising trade deficits have increased pressures on the
Clinton administration to erect protectionist trade barriers to
protect American workers.
The deficit figures are also certain to be cited by foes of Clinton's policies in the upcoming battle in Congress to grant
China permanent normal trade relations with the United States.
President Clinton has argued that American consumers will loose if U.S. markets are closed to foreign goods and that the way to proceed is to continue pressing to remove unfair foreign barriers to the export of American products.
The current account is considered the best measurement of a country's international economic standing because it measures not just the goods and services reflected in the government's monthly trade reports but also investment flows between countries and unilateral transfers, a category that reflects U.S. foreign aid
payments.
For 1999, all categories showed deterioration. America's deficit in goods widened by $100.2 billion to $347.1 billion. America enjoys surpluses in the services category, which measures such things as airline travel, but for 1999 that surplus shrank to $79.6 billion, compared to $82.7 billion in 1998.
The deficit in investment earnings widened to $24.8 billion in 1999, more than double the $12.2 billion deficit in 1998.
The United States is now the largest debtor nation, meaning that foreigners own more in U.S. holdings than Americans earn overseas. That imbalance means that foreign investment earnings each year also surpass the earnings of U.S. corporations and individuals on their overseas holdings.
The category of unilateral transfers, which includes foreign aid, climbed to a deficit $46.6 billion, up from $44.1 billion in
1998.
