U.S./Sweden International Trade

The balance of international trade for a country is "the difference between its exports and its imports" (Lederer, 1982, 55). Within this context, a country has an overall balance of trade, as well as separate trade balances with each other country with which it trades.

In a narrow definition, exports and imports are considered to be only tangible goods. A broader definition, however, also covers all intangible services.

The US has had a merchandise trade (exports and imports) deficit throughout the decade of the 1980s (the last surplus was recorded in 1975), with annual deficits in excess of US$100 billion commencing in 1984, and in excess of US$150 billion commencing in 1986. Better performance in the services sector kept the overall US trade balance positive until 1983. Commencing in 1986, however, the overall annual trade deficit

of the US has exceeded US$100 billion, as services sector imbalances grew. Although the American international trade situation has generally improved since 1985, the trend is such that years, perhaps decades, will be required, before the US again reaches an equilibrium in international trad

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nce. The reason for the country's generally positive current account balance has been its strong balance of trade surplus. Since the advent of the fiscal and monetary policies of the decadeof the 1980s (those of both the Federal Reserve Board, and of the Reagan and Bush Administrations), however, the country's traditional balance of trade surplus has become a huge balance of trade deficit. In recent years, foreign investments through the balance of payments capital account have been strong enough to somewhat mitigate what would otherwise be an impossible balance of payments deficit resulting from the country's relatively new balance of trade deficit. 4 The Reagan and Bush Administrations claim that low American exports result from trade restrictions placed on American products by foreign governments. In some instances, this claim is absolutely true. In many otherperhaps mostinstances, however, the reason is likely the same as that which causes imports of foreign goods into the United States to remain high. That reason is that American products are often less desirable in the context of performance and features than are foreign products. A case in point is automobiles, where Japanese and German automobiles continue
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Approximate Word count = 1427
Approximate Pages = 6 (250 words per page)