r a decade, the situation is much better now than it was in the mid-1980s. The merchandise trade deficit fell from a peak of $160 billion in 1987 to $96 in 1992. Relative to GDP, it declined from 3.5 percent 1.6 percent. The current account deficit, which includes trade in services, improved even more dramatically. It dropped from a deficit of $167 billion in 1987 to $62.
The decrease happened because over the past six years, U.S. exports have surged. From 1986 through 1992, the total value of U.S. merchandise exports almost doubled, growing more than 12 percent per year. A major source of strength in this export growth has been manufactures. With respect to "unfair trade practices," such as government support of selected industries through export su
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