For Manufacturers, the U.S. Moves toward a Trade Surplus

by John Murphy

The United States now has a trade surplus in manufactured goods with its 14 free trade agreement (FTA) partners, the Commerce Department reported last week.  That’s right: Free trade agreements are helping to shrink the U.S. trade deficit:

• The U.S. trade surplus in manufactured goods with these 14 countries reached $2.7 billion in January-May 2008.  This compares with a deficit of $12.3 billion during the same period a year ago.
• The U.S. manufactured goods trade balance improved 122% with these FTA partners — but only 6% with non-FTA partners — in the first five months of 2008.
• Since 2002, FTAs have helped U.S. exports of manufactured goods grow by 63%, compared with growth of 42% for U.S. imports of manufactured goods in January – May 2008 (compared to the same period of 2002).
• If FTAs are reducing the trade deficit, what has caused it to rise in recent years?  In a word, oil.  Since 2002, rising imports of petroleum products have accounted for 93% of the increase in the U.S. trade deficit.  Petroleum accounts for more than half (55%) of the U.S. trade deficit today. 
• Overall, exports are providing a critical boost to the U.S. economy, generating nearly half (48%) of U.S. GDP growth in April 2007 – March 2008. 

Get all the details here.(PDF)