The United States Commerce Department report that the January 2008 manufactured goods trade deficit dropped by $7 billion from the previous year was hailed by Frank Vargo as validation that “export-led growth and free trade are continuing to hold the economy above water.” Vargo is the National Association of Manufacturers' vice president for international economic affairs.
“While the overall U.S. trade deficit in January was $4 billion larger than the same period last year, this was due to the continued growth in the petroleum trade deficit,” Vargo said.
The January manufactured goods deficit was $37 billion, compared with $44 billion in January 2007. That's a 16 percent improvement over a year, with exports rising by 11 percent and imports growing only one percent.
“The export gain continues a trend that is due to — among other things — the competitive value of the dollar,” said Vargo. “The slow import growth can also be attributed to the value of the dollar, though the slowing U.S. economy has cooled demand for consumer and other goods.
“The other real plus is our free trade agreements. Together, our free trade partners accounted for nearly half of our exports, but only $100 million of our $37 billion January deficit — with notable trade balance improvements in NAFTA and CAFTA.