- The Washington Times - Wednesday, September 12, 2007

ASSOCIATED PRESS

The U.S. trade deficit declined slightly in July, helped by record exports that offset the biggest foreign oil bill in nearly a year. But even a spate of recalls did not stop the deficit with China from climbing to the second-highest level on record.

The trade deficit edged down 0.3 percent in July to $59.2 billion, compared with $59.4 billion the previous month, the Commerce Department reported yesterday. It was the lowest monthly imbalance since April.

So far this year, the deficit — which reached $758.5 billion last year — is running at an annual rate of $711 billion. Many private economists think stronger economic growth overseas, a weaker dollar that makes American exports more competitive and slower growth at home will help lower the deficit after five consecutive years of record imbalances.

The narrowing of the deficit has not satisfied critics of President Bush’s trade policies. They are pushing legislation that could impose economic sanctions on China and vowing to block free-trade agreements with Colombia, Panama, Peru and South Korea that the administration hopes Congress will pass this year.

The administration, however, said the latest trade figures show that Mr. Bush’s policies are working and American companies would be helped even more if the pending free-trade deals were approved.

“Today’s numbers clearly show the positive impact of exports and trade on the American economy,” said Commerce Secretary Carlos Gutierrez, who will head a congressional delegation today on a four-day trip to Panama, Peru and Colombia to build support for passage of the trade deals.

The administration agreed to include provisions sought by Democrats to bolster worker rights and environmental protections, but some opponents say the changes don’t satisfy their concerns about unfair competition from low-wage countries.

“Job-killing trade agreements, weak safety standards, exploitation of developing nations and their workers — it is time for a new direction,” said Sen. Sherrod Brown, Ohio Democrat, who is fighting all four free-trade deals.

The agreements with Peru and Panama are seen as having good chances for approval this year, but the measures with Colombia and South Korea face wider opposition.

For July, U.S. exports rose 2.7 percent to a new high of $137.7 billion as sales of American farm goods, autos and auto parts and U.S.-made capital goods all set records.

Imports also rose to a record in July, climbing 1.8 percent to $196.9 billion. This increase was led by a 2.3 percent jump in petroleum imports, which hit $27.2 billion, the highest level in 11 months.

America’s deficit with China jumped 12.5 percent in July to $23.8 billion, the second-highest level on record, surpassed only by a $24.4 billion imbalance in October. So far this year, the deficit with China is running at an annual rate of $242 billion, putting the country on track to surpass last year’s record deficit with China of $233 billion, the highest ever recorded with a single country.

The July imbalance reflected a 19 percent plunge in exports to China, as sales of commercial airplanes fell, and a 5.6 percent jump in imports, including higher shipments of cell phones, toys and clothing.

The rise in imports is occurring despite a number of high-profile recalls this year of unsafe products including tires, toothpaste, pet food ingredients and toys.

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