- The Washington Times - Thursday, March 13, 2003

A pickup in foreign demand for American industrial supplies, household appliances and cosmetics helped to narrow the U.S. trade deficit to $41.1 billion in January.
Even with the improvement, however, the trade gap marked the second-biggest monthly deficit on record, the Commerce Department reported yesterday.
"The trade deficit narrowed in January. Whoopee," said economist Joel Naroff, president of Naroff Economic Advisors. "The decline in the trade deficit may look nice, but the level is so outrageous that it's hard to get excited."
The deficit slimmed down by 8.4 percent in January from December's record $44.9 billion. The gap narrowed as U.S. exports rose, helped out by a weaker U.S. dollar, and imports fell, reflecting the more cautious mood of American consumers and businesses.
Exports of goods and services went up by 1.6 percent to $81.9 billion in January.
Exports of industrial supplies, including chemicals and steel, increased to $14 billion, the highest level since April 2001. Overseas sales of U.S.-made consumer products a broad category that includes household appliances, cosmetics and furniture rose to $7.4 billion, the best showing since May 2001.
The dollar has lost altitude over the past year, a good development for U.S. exporters because it makes their products more competitive on foreign markets and less expensive for overseas buyers.
"Certain fundamentals are beginning to move in a positive direction, including the 12 percent decline of the dollar over the past year," said National Association of Manufacturers President Jerry Jasinowski.
But weak economic growth overseas, especially in Europe, means that export growth probably won't really pick up until the second half of this year assuming the geopolitical situation stabilizes, he added.
The narrowing of the trade deficit came even as the average price of imported crude oil jumped to $27.73 a barrel in January, the highest price since November 2000.
January's per barrel price was $3.58 higher than December's, marking the largest one-month gain since September-October 1990. Fears about a potential war with Iraq are contributing to higher energy prices.
Imports of goods and services, meanwhile, dropped by 2 percent in January to $123 billion, reflecting Americans' weaker demand for a wide variety of foreign-made goods amid economic jitters at home.
Sales of foreign-made cars to the United States dropped by $863 million to $16.8 billion in January.
Imports of consumer goods, including TVs, VCRs and household appliances, also lost ground, declining to $26.9 billion in January.
Imported capital goods, such as airplanes and telecommunications equipment, went down by $270 million to $24.3 billion in January.
To combat the trade deficit, the Bush administration says the United States should seek to boost American exports by attacking foreign trade barriers, rather than raising barriers to imports coming into the country.
The United States has free-trade agreements with Mexico and Canada, its partners in the North American Free Trade Agreement, and with Israel and Jordan, deals that were struck in an effort to promote economic development in the Middle East.

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