American Foreign Trade Problem

The balance of international trade for a country is "the difference between its exports and its imports" (Lederer, 1982, 55). In a narrow definition, exports and imports are considered to be only tangible goods. A broader definition, however, also covers all intangible services. This broader definition must be further expanded to include remittances, pensions, and other unilateral grants, in order to provide a balance on a country's current account.

The overall balance of trade for the United States has been on the decline since 1981 (Council of Economic Advisers, 1990). The merchandise balance of trade, however, has not been in surplus since 1975, and the deficit has been increasing since 1980. In spite of the merchandise trade deficit, the overall balance of trade remained positive, until 1983, when

2the services surplus was no longer able to overcome the merchandise deficit.

It is apparent that the merchandise trade deficit is the major problem area, although the services surplus has also trended generally downward since 1981.

. . .
l +14.0% + 89.4 bil 34.7% 1984 896.1 bil + 2.5% 892.6 bil +13.8% + 3.5 bil 96.1% 1985 950.3 bil + 6.0% 1.061 tril +18.9%  110.7 bil 32.6X 1986 1.071 tril +12.7% 1.341 tril +26.4%  269.2 bil + 2.4X 1987 1.168 tril + 9.0% 1.536 tril +14.6%  368.2 bil +36.8% 1988 1.297 tril +11.0% 1.770 tril +15.2%  473.3 bil +28.5% (International Monetary Fund, January 1990; Council ofEconomic Advisers, January 1990; Council of Economic Advisers, February 1989) =============================================================== often) repayment requirements, and specific terms (maturity dates). The provisions of such loans are not, again for the most part, directly tied to either a country's annual economic performance, or its ability to pay in any given period. As a consequence, many developing countries continually find them selves up against the wall, so to speak, unable to meet either 8 principal or interest payments without further punishing an already deprived population (and, in some instances, unable to do so even if they further punish their population). Such countries typically receive principal payment deferrals, and additional loans to cover interest payments. The ruse pe
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Approximate Pages = 16 (250 words per page)

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