Report Says U.S. Exports Undercounted
The economy may be far more competitive than Commerce Department trade figures indicate, said a study released Tuesday by the National Research Council.
It asserts that the United States undercounts the value of its exports, largely because customs agents spend more time scrutinizing imported items to ensure that tariffs are paid.
Robert Baldwin, a University of Wisconsin economist who was chairman of the study panel, said the discrepancy can be substantial.
For example, trade figures show the United States with a $148-billion deficit for 1987, the last year for which data existed when the study began.
But the new research estimates a shortfall of only $64 billion.
The 1991 deficit, to be issued next month, is likely to be $65 billion.
Baldwin would not say what he believes the actual shortfall will be.
But “we think the official tally of exports is too low,” he said.
The study estimated that exports to Japan, Germany and Britain were under-reported by 7% in the 1980s. The actual values were $10 billion to $20 billion greater than official figures showed, said Baldwin.
Baldwin recommended that the government tighten export reporting.
He also said the traditional comparison of exports with imports is not an accurate way to measure trade balances, saying that the sale and purchase of foreign affiliates by U.S. companies also needs to be included.
The economist also cast doubt on the conventional view that exports create jobs while imports eliminate them. Jobs can be created by foreigners buying more and producing more in the United States. Similarly, increased U.S. production overseas may mean fewer American jobs.
The study urged the government to develop a method to measure U.S. global performance that follows transactions by the nationality of a firm’s majority owners, not by the nation in which the firm is located.
That would provide a better view of the nation’s global competitiveness, as well as insight into how jobs are lost or gained in the United States due to foreign investment here and U.S. investment abroad.
