MercoPress. South Atlantic News Agency

US 2007 trade deficit narrows for first time in six years

The US trade deficit narrowed in 2007 after five years of consecutive records, pushed by exports that helped offset the country's large growth in oil imports and trade gap with China. The deficit reached 711.6 billion US dollars in 2007, down from 758.5 billion in 2006, a 6.2% decline the Commerce Department said.

Strong demand for oil from overseas had seen the trade gap set records. Equally significant trade deficit with China continued to rise, jumping 10.2% to 256.3 billion US dollars, the largest gap recorded in the US with a single country. Chinese imports surged despite a string of high profile recalls of tainted products. December's trade deficit fell to 58.8 billion from 63.1 billion in November (6.9%), a bigger decline than expected. The decline in the dollar helped to spur exports, analysts said, as this made US products cheaper abroad and therefore more competitive. The Bush administration credits its free trade policies for spurring strong growth in exports while critics contend that even with the lower overall deficit, the imbalance is still nearly double what it was in 2001, the year Bush took office. Commerce Department figures showed that exports, which were helped by farm products and car and vehicle parts, totaled 1.62 trillion US dollars (up 12.6%), while imports, led by oil rose to 2.33 trillion (5.9%). Imports main single item was oil with 331.23 billion US dollars with an average annual price for crude oil of 64.27 US dollars per barrel. Other important US deficits with trade partners include the European Union at 107.4 billion, Japan at 82.8 billion, Mexico, 74.3 billion and Canada 64.2 billion. The US trade performance is expected to be a major issue in the upcoming presidential campaign, with Democrats arguing that the huge deficits have contributed to the loss of jobs as US companies moved production to low-wage countries such as China. The US Congress has introduced a variety of bills to impose economic sanctions on China for what they contend are unfair practices such as manipulating its currency to keeps its value low against the dollar, which makes Chinese goods cheaper in U.S. markets and US products more expensive overseas. The US administration opposes these efforts arguing that they could spark an all-out trade war and as an alternative is seeking passage of three pending free-trade agreements and has filed several unfair trade cases against China with the World Trade Organization.