Newspaper article THE JOURNAL RECORD

Trade Deficit Narrows

Newspaper article THE JOURNAL RECORD

Trade Deficit Narrows

Article excerpt

WASHINGTON (AP) -- America's overall trade deficit narrowed dramatically in June as imports fell by the largest amount in five years. But in a disturbing hint of things to come, America's trade gap with China exceeded the deficit with Japan for the first time in history.

The Commerce Department reported Tuesday that June's deficit in goods and services fell to $8.11 billion, down 23 percent from a revised $10.55 billion deficit for May.

The Clinton administration hailed the improvement as a sign that President Clinton's trade policies were working to tear down foreign barriers and boost exports of American products.

Commerce Secretary Mickey Kantor said that America's deficit in autos and auto parts with Japan was running 23.9 percent below the level of 1995.

"This steady and significant improvement reflects the Clinton administration's focused efforts over the last four years, including the 1995 auto and auto parts agreement," he told reporters at a briefing. But Clinton's presidential opponents, Ross Perot and Bob Dole, have both called the administration's strategy of negotiating open-market trade agreements a failure that has cost millions of American jobs.

In accepting the Republican nomination last week in San Diego, Dole charged that Clinton's policies have led to rising trade deficits and lower American wages.

Dole vowed to do a better job of protecting American companies against foreign unfair trade practices and said he would "not let our national sovereignty be infringed by the World Trade Organization," the Geneva-based body that since 1995 has the power to police global trade.

Private economists viewed the June trade improvement as a return to more normal deficit levels after abnormally high imbalances in April and May.

"We seem to be making some improvement and we ought to make more if economic growth quickens abroad as we expect it to," said Robert Dederick, chief economic consultant at Northern Trust Co. in Chicago. "But it is hard to make a real breakthrough given our high propensity to import."

Dederick noted that America's deficit with China has been getting steadily worse, a trend he said was likely to continue as China and other Asian countries overtake Japan as chief supplier of low-cost consumer goods to the American market. …

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