By Yvonne Gordon

For 1998, exports of $931.3 billion and imports of $1.099 trillion resulted in a trade deficit of $168.6 billion, according to a report released by the U.S. Commerce Department's Bureau of Economic Analysis. The record high exceeded the 1997 level by more than 50 percent – $58.4 billion more than the 1997 deficit of $110.2 billion.

Analysts predict that the 1999 trade deficit may go even higher because of the troubles overseas, citing trouble in Asia, Latin America, and other regions.

The report showed that exports fell 0.7 percent – $8.3 billion from 1997, to $931.3 billion – the first decline in 13 years. The largest decreases were in industrial supplies and materials – $10.3 billion – with petroleum products, finished textiles supplies, and organic chemicals decreasing the most. Decreases in foods, feeds, and beverages totaled $5.1 billion with farm products such as soybeans and corn suffering the greatest decline.

For 1998, the American consumer's growing consumption of foreign goods sent the rise in imports up 5 percent, to nearly $1.1 trillion. The largest increases were in consumer goods of $22.6 billion (apparel products and pharmaceutical products increased the most) and capital goods of $16.2 billion (telecommunications equipment, civilian aircraft, and computer accessories increased the most).

For 1998, exports of services were up $2.0 billion from 1997, while imports of services were up $10.3 billion from 1997. Travel abroad by Americans accounted for $2.1 billion, and royalties and license fees accounted for $1.5 billion.

Joel Prakken, chairman of Macroeconomic Advisers, a St. Louis economic forecasting firm, told The Washington Post that he expected the 1999 gap to widen even further. He said: "Asian economies are still weak, there's growing signs of lethargy in Europe, and Latin American economies are going into recession. So, we expect to see a bigger trade deficit this year." He figured that the gap probably will not widen as dramatically as it did in 1998.

Robert J. Shapiro, undersecretary of Commerce for Economics and Statistics, claimed that the deficit "represents the strength of the U.S. economy compared to weakness abroad." He pointed out, though, that the deficit accounts for some 2.1 percent of gross domestic product, much less than the record 3.3 percent set in 1987.

The U.S. automotive trade gap continued to widen in 1998. The country bought $150,715 million worth of foreign cars, compared to $140,779 million in 1997. Yet the United States exported only $72,696 million worth of cars in 1998, down from $74,029 million in 1997.

The United States has a trade surplus when it comes to foods, feeds and beverages. In 1997, the country imported $39,694 million in foods, feeds and beverages while exporting $51,507 million. However, the amount of foods, feeds and beverages exported decreased to $46,379 million in 1998. The amount of foods, feeds and beverages imported in 1998 increased to $41,229 million.

Worker advocates see the deficit as an indication that the U.S. is losing a battle – a battle of jobs and strength.

GCIU Pres. James J. Norton said: "Every time someone buys a shirt made overseas, it represents a U.S. textile worker out of work and an overseas worker underpaid. If we were balancing buying the shirt, for example, with selling a pair of slacks made in the United States, it would be different. But we are not doing that."

He added: "The increase in the trade deficit can also be viewed as a weakening of our country. Our self-sufficiency and our independence are our strength. When we cannot buy a phone, a keyboard, a shirt or a pair of pants made in this country, then we are headed down a road toward increased dependence upon other governments and on workers in other countries."

Norton said he blamed corporate greed for the increase in the trade deficit. He said companies are rushing to move production oversees often to "take advantage of the opportunity to grossly underpay those workers, charge the same prices to U.S. consumers as before, and pocket immense profits at the expense of workers on both sides of the ocean."

AFL-CIO Pres. John J. Sweeney, in recent testimony to the Senate Finance Committee – which handles trade issues – decried the trade gap in the steel industry.

With steel exports to the United States threatening to take half of the U.S. market and push thousands of steel workers out of jobs because much of the steel export tonnage to the United States comes from economically ravaged Asian nations, Sweeney testified: "Global flows of goods unleashed by devalued currencies have wreaked havoc in our domestic steel industry – a model of an American industry whose workers and firms did all the right things [to adjust to trade]."

He added that while steel did everything right, workers still lost out in global markets. He declared: "We can and must moderate the markets' tendency to pit worker against worker, firm against firm, and country against country in a competitive spiral that makes us all worse off. . . . The global market does not work very well for working people."