US Envoy: Trade Deal Would Ease Deficit

12/15/2005

HONG KONG Dec 15, 2005 (AP) — A sweeping global trade deal would reduce the U.S. trade deficit, the nation’s top trade official said Thursday, shrugging off suggestions that the growing trade gap would undermine his efforts to negotiate at the World Trade Organization talks this week.

“Yes, there’s a trade deficit,” U.S. Trade Representative Rob Portman told reporters. “This does not mean the United States is going to back off of our strong promotion of” a WTO treaty that would slash tariffs and subsidies.

The Commerce Department announced Wednesday that the difference between what America sells overseas and what it imports rose by 4.4 percent to $68.9 billion in October, an all-time high, surpassing the old record of $66 billion set in September.

Some experts say the ballooning trade gap is evidence that U.S. efforts to strike free trade agreements that cut trade barriers such as tariffs and quotas have exposed the United States to unfair competition and a flood of imports from low-wage nations that have ended up costing American jobs.

A global free trade pact, which negotiators are striving to hammer out in Hong Kong this week, would only worsen the trade gap, they say.

Joseph Mayer, president of the Committee to Support U.S. Trade Laws, said “it would be absurd to consider weakening U.S. trade laws during the WTO rules negotiations. If anything, they should be strengthened.”

He said that “stripping the very safeguards that ensure fair competition … is like asking American companies to compete with one hand tied behind their backs.”

Portman, however, said he was confident a WTO deal lowering trade protections “will be good for our exports.”
He pointed out that the U.S. economy is “extremely open to trade right now,” with U.S. farm tariffs averaging 12 percent, as opposed to a global average of 62 percent. U.S. industrial tariffs, he said, averaged 3 percent, compared to 30 percent worldwide.

“By leveling the playing field and reducing the barriers to trade, we will see an expansion of U.S. exports and that will be beneficial to our current balance of trade and reduce our deficit,” Portman said. “I believe that.”