America's trade deficit narrowed slightly to $24.1 billion in August as improving economies in Asia boosted the fortunes of America's struggling manufacturers and farmers.
The Commerce Department reported Wedesday that the August deficit edged down 3.2 percent from the all-time record of $24.9 billion set in July.
But even with the $791 million improvement, the August imbalance was still the third-worst monthly performance in history and left the deficit for the entire year running at an annual rate of $252 billion, 53 percent higher than last year's record $164.3 billion deficit.
And even though the overall deficit improved, America's imbalance with China jumped 8.8 percent to $6.9 billion, the biggest monthly imbalance ever with a single country.
The August figures did point to some glimmers of improvement down the road. American exporters, who have been battered for two years as the Asian crisis cut into their overseas markets, posted a sizable 3.7 percent gain in August, which lifted exports of goods and services to a record $82 billion.
But imports, which have been strong all year, posted an increase of 2 percent and also set a new record of $106.1 billion.
The U.S. economy, which has continued to grow strongly despite all the overseas problems, has been pulling in imports at a record clip, helped by the huge foreign currency declines that have made imports bargains for American consumers.
President Clinton last week defended his policies of pushing to lower barriers and open overseas markets for American producers as he laid out his negotiating strategy for upcoming talks among 134 nations in Seattle to launch a new global round of trade liberalization.
But even with U.S. unemployment at a three-decade low of 4.2 percent, critics charge that the Clinton trade policies have been a failure that has opened U.S. markets to a flood of cheap imports while doing little to remove foreign barriers.
Mr. Clinton has been thwarted by Democrats in his own party who are blocking efforts in the House to pass the congressional authorization he needs to conduct the new trade talks.
The administration has also been unable to conclude lengthy negotiations with China in which the Asian giant would agree to lower its barriers to American exports in return for U.S. support in its bid to join the WTO.
The $6.9 billion deficit the United States suffered with China reflected a surge in Chinese imports, which shot up to a record $8 billion as American retailers stocked up on toys and electronic products in preparation for Christmas sales.
The previous country-record deficit was set in July with Japan, but in August the Japanese deficit narrowed 5.8 percent to $6.4 billion. But the deficit with Japan is still running 13 percent above a year ago, adding to trade tensions between the world's two largest economies.
U.S. exports to all Pacific Rim countries, the area hardest hit by the two-year global financial crisis, climbed by .4 percent in August, helping to narrow the deficit by 1.8 percent to $17.2 billion. South Korea, Thailand and other nations in the region are reporting rising economic activity this year as they climb out of steep recessions caused when their currencies plunged.
By Martin Crutsinger
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