2000 Trade Deficit Hits High

America's deficit in the broadest measure of trade surged to an all-time high of $435.4 billion last year as an increase in U.S. exports failed to offset a huge rise in imports of consumer goods and oil.

The Commerce Department reported Thursday that the deficit in the current account was up a sharp 31.3 percent from the previous record of $341.5 billion set in 1999.

The increase for the year came as no surprise, given that the quarterly deficits rose steadily to record highs. The fourth-quarter deficit rose to $115.3 billion, a 1.9 percent increase from the $133.1 billion third-quarter imbalance.

The quarterly figures on the current account paint the fullest picture of America's trade troubles. They cover not only goods and services, which are reported in the government's monthly trade statistics, but also investment flows and unilateral transfers, a category that includes foreign aid.

The trade deficit has climbed steadily over the past five years as the strong U.S. economy and seemingly insatiable American consumers drew in a flood of imports from around the world. That trade imbalance was a major plus for the global economy, helping countries struck by the Asian crisis to recover and begin growing again.

With the U.S. economy now in a severe slowdown, economists believe the U.S. trade balance will begin to narrow. However, a new concern is that there is no area of the world that can serve as a locomotive, since Japan, the world's second-largest economy, is threatening to topple back into a recession and growth in Europe is also slowing.

For 2000, the deficit in goods climbed to a record $449.5 billion, an increase of 30.1 percent from the previous year.

Imports of oil, consumer products and industrial equipment surged by 18.8 percent last year to an all-time high of $1.22 trillion. That swamped a 13 percent increase in U.S. exports of manufactured goods and farm products, which rose to $684.4 billion.

America's surplus on services, including such things as airline fares and licensing fees, rose a modest 0.5 percent to $81 billion last year.

The deficit in income flows, the earnings that Americans receive on their overseas investments versus the earnings foreigners get on U.S. investments, decreased slightly to $13.7 billion in 2000 compared to an imbalance of $18.5 billion in 1999.

Unilateral transfers, the category that covers U.S. foreign aid, increased to $53.2 billion last year, up from $48 billion in 1999.

By Martin Crutsinger
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