Record U.S. Sales Abroad Help Cut the Trade Deficit : Commerce: But the contentious imbalance with Japan persists as gap hits $5.8 billion in March.
The U.S. trade deficit narrowed greatly to $7.46 billion in March as a record level of American sales abroad helped offset record imports, the Commerce Department said Thursday.
However, within the overall positive report were troubling statistics on trade with Japan. While the total U.S. deficit narrowed by 18.5%, the imbalance with Japan grew by 25.4% to $5.8 billion, its third-highest monthly level.
As the report was being released, representatives of both nations were meeting, breaking three months of near silence in an effort to resume negotiations on a smoother trade relationship.
The monthly U.S. trade figures, which are routinely volatile, showed U.S. exports of goods at an all-time high of $42.17 billion. Imports were valued at $54.21 billion, also a record. A surplus in the area of services--investment operations, entertainment and travel, for example--cut the overall trade deficit.
The Commerce Department reported that the increase in exports was fueled by jumps in U.S. sales of gold bullion, commercial airplanes, telecommunications equipment and engines.
“These exports occur in areas of rising U.S. competitiveness and coincide with some early signs of better economic growth in the industrialized nations, particularly in Europe,” Commerce Secretary Ronald H. Brown said in a statement. But he said that despite such month-to-month jumps, “continued slow growth abroad remains a drag on U.S. economic expansion.”
The United States has been pressuring Japan to stimulate its sluggish domestic economy to spur demand for U.S. goods and help narrow the growing trade imbalance between the two countries.
Emissaries from the new Japanese government of Prime Minister Tsutomu Hata visited the offices of the U.S. trade representative Thursday, trying to re-establish talks that were broken off Feb. 11 when U.S. and Japanese officials were unable to agree on a plan to open the Japanese market in four crucial economic sectors.
U.S. officials approached the meeting with a wait-and-see attitude, saying during a dinner break that they had not yet heard enough from the Japanese to warrant reopening the stalled negotiations. But they said the meetings would continue into the evening and could resume today.
The Japanese, a senior White House official said, “know what it would take” to resume formal negotiations.
With the Hata government still trying to get its political footing, Clinton Administration officials are reluctant to push Japanese officials to make risky concessions. There is no suggestion that such pressure, which produced some progress in low-visibility areas during the past year, would be successful in the coming year.
Negotiations fell apart when Hata’s predecessor, Morihiro Hosokawa, visited the White House earlier in the year.
At this stage, with the new prime minister expressing interest in resuming the talks, “it’s not the best thing in the world to start throwing furniture around the room,” a senior U.S. trade official said.
Throughout its first year in office, the Administration sought ways to pressure Japan to compromise on the trade front, demanding that Tokyo agree to establish some form of objective criteria for measuring progress in purchasing foreign products.
Senior officials deny there has been a shift from that approach, but their comments have suggested that it has less emphasis. They said there is no deadline for progress, and they steered clear of creating any expectation that Clinton and Hata would be able to nail down an agreement by the time they meet at the next international economic summit, which takes place in Naples, Italy, in July. But they also made it clear they are unwilling to let new talks drag on indefinitely.
Speaking in what he freely acknowledged was a defensive tenor, the senior trade official took pains during a recent meeting with reporters to emphasize a series of agreements that are intended to open Japan to U.S. apples, rice and chemicals, as well as cellular telephone companies and construction contracts.
After the meeting Thursday got under way, U.S. Trade Representative Mickey Kantor told reporters during a recess that “we had an exchange of very detailed ideas.”
* NAFTA PAYOFF: Exports to Mexico are booming. D5
