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Introduction: Trade Legislation: Seeking the Right Balance
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12940 |
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CURRENT ISSUES
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5 / 1987 |
875 Words |
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There is little debate about the U.S. trade position: It is badly out of balance and in need of serious remedial action. The $170 billion question (that being the 1986 trade deficit) is: What should be done and who should do it?
The record $170 billion deficit was reached because between 1980 and 1986 imports into the United States increased 51 percent while U.S. exports dropped by 2 percent. As a percentage of real gross national product, the real trade deficit went from only 0.6 percent in 1983 to 4.1 percent in 1986. Many domestic industries were seriously hurt by the accelerating surge in imports. From 1981 to 1985, the share of the U.S. market held by foreign makers of television sets and radios rose from 59 percent to 66 percent, of shoes from 33 percent to 63 percent, of machine tools from 27 percent to 45 percent, and of computers from 7 percent to 25 percent. In 1984 alone, 1.8 million jobs were displaced by trade.
A most disturbing aspect of the U.S. decline has been the precipitous drop of the agricultural trade surplus. In 1981, the U.S. surplus was about $23.8 billion; by 1986, it was only $3.2 billion. Despite expectations raised by the Baker plan, the falling dollar did not stop the downward spiral: Last year, the export value of agricultural products contracted by 15 percent while exported goods fell to an estimated 109 million metric tons, both new lows for the decade.
Even in the area of services, long dominated by the United States, the surplus has shrunk and imports have steadily grown. Between 1979 and 1985, the surplus fell from $32.7 billion to $21.7 billion. Overall, according to a Federal Reserve Board study, the ratio of imports to gross national product rose from 4.6 percent in 1960 to 10.4 percent in 1983. The bottom line of all these statistics is painful to read: The United States has gone from being the world's biggest creditor to the nation with the largest trade deficit in the world.
At this critical moment, the voices calling for swift action and even retribution are loud in the land. In this Special Report of THE WORLD & I, AFL-CIO President Lane Kirkland calls on the United States to get tough with countries "whose practices burden, restrict, or discriminate against U.S. commerce." Among the actions he recommends are elimination of the most-favored-nation clause for recalcitrant countries and the mandatory imposition of "countervailing duties." Sen. John Heinz (R-Pennsylvania) charges that "countries are getting away with economic murder" and that the United States can no longer serve as
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