A Bright Side to the US Trade Picture
LISTEN enough to the ``experts'' who attract most of the media attention, and you'd conclude that the American economy has been left in the dust by Japan, Germany, and an array of smaller nations. But, as the saying goes, it's not what they don't know that worries me; it's what they think they know that isn't so. In fact, virtually across the board, in almost every major product category, America exported more last year than it imported. Three major exceptions - shoes and textiles, automobiles, and petroleum - account for 99 percent of our trade deficit.
Should America feel threatened because we're no longer the leading exporter of footwear in the world? Or does the Arab world's oil wealth make it the citadel of the good life?
The statistics show that, far from being in economic decline, the United States is still a world leader. For example:
America is still the world's breadbasket. We export almost twice as much food and other agricultural commodities as we import.
Though we import far more oil than we export, we also export twice as much non-petroleum mineral fuels and 32 times as much coal as we import.
America leads the world in chemical technology - foreign purchases of US chemicals amounted to almost twice our import level.
The US leads the world in both aircraft and spacecraft. US imports of airplanes were only $2.8 billion, while foreigners bought $14.3 billion worth of US planes. And exports of spacecraft and parts outpaced imports by more than 50 to 1.
In the overall category of advanced technology, the United States runs a huge trade surplus. We exported $81.6 billion worth in 1989, while we imported more than 30 percent less, just $56.2 billion.
America can't compete? That's nonsense.
The inventiveness and industriousness that made America the world's leading economic power are as strong today as ever. And American companies still make quality products.
Consider the stereo market, for example. There are three ``industry standards'' for high-end stereo systems; all are made by American companies. ``We've always been ahead in manufacturing speakers and producing the best electronics,'' says audio expert David L. Hardin. ``There is a lot of electronic equipment on the market, but the Japanese stuff is mostly aimed at the department store and discount house consumer.''
Yes, America runs a trade deficit. But no one's been able to explain what's so harmful about trade deficits. What they actually indicate is that American consumers are affluent enough to buy a wide variety of products from around the world.
Protectionist politicians would simply limit consumers' access by erecting trade barriers to protect certain industries against foreign competition.
Protectionism hurts not only consumers, but American business as well. As economist Edward Hudgins has stressed, US manufacturers are now able to import inexpensive raw materials from abroad and increase their value geometrically through technology. ``Inventions and applications of new technology to manufacturing,'' he points out, ``will allow Americans to create and develop markets and products not even imagined today, just as the invention of the microchip ushered in a new high-tech revolution unforeseen in the 1950s and 1960s.''
The US economy would profit immensely if manufacturers spent more time improving products and less time lobbying Washington for protection. The federal government should lighten the tax and regulatory burdens that create disadvantages for US firms in the global market.
It's hard to be wildly optimistic about Congress and the bureaucracy, but it's heartening to see US manufacturers doing so well in spite of them.