Over the past year, the U.S. trade picture improved as a result of solid
export gains in both manufactured and agricultural products. Agricultural
exports reached a new record of over $40 billion, while manufactured
exports have grown by 24 percent to a record $144 billion. In these areas
the United States recorded significant surpluses of $24 billion and $19
billion respectively. While our oil imports remained a major drain on our
foreign exchange earnings, that drain was somewhat moderated by a 19
percent decline in the volume of oil imports.
U.S. trade negotiators made significant progress over the past year in
assuring effective implementation of the agreements negotiated during the
Tokyo Round of Multilateral Trade Negotiations. Agreements reached with the
Japanese government, for example, will assure that the United States will
be able to expand its exports to the Japanese market in such key areas as
telecommunications equipment, tobacco, and lumber. Efforts by U.S. trade
negotiators also helped to persuade a number of key developing countries to
accept many of the non-tariff codes negotiated during the Multilateral
Trade Negotiations. This will assure that these countries will increasingly
assume obligations under the international trading system.
A difficult world economic environment posed a challenge for the management
of trade relations. U.S. trade negotiators were called upon to manage
serious sectoral problems in such areas as steel, and helped to assure that
U.S. chemical exports will have continued access to the European market.
Close consultations with the private sector in the United States have
enabled U.S. trade negotiators to pinpoint obstacles to U.S. trade in
services, and to build a basis for future negotiations. Services have been
an increasingly important source of export earnings for the United States,
and the United States must assure continued and increased access to foreign
markets.
The trade position of the United States has improved. But vigorous efforts
are needed in a number of areas to assure continued market access for U.S.
exports, particularly agricultural and high technology products, in which
the United States continues to have a strong competitive edge. Continued
efforts are also needed to remove many domestic disincentives, which now
hamper U.S. export growth. And we must ensure that countries do not
manipulate investment, or impose investment performance requirements which
distort trade and cost us jobs in this country.
In short, we must continue to seek free--but fair--trade. That is the
policy my Administration has pursued from the beginning, even in areas
where foreign competition has clearly affected our domestic industry. In
the steel industry, for instance, we have put Trigger Price Mechanism into
place to help prevent the dumping of steel. That action has strengthened
the domestic steel industry. In the automobile industry, we have worked--
without resort to import quotas--to strengthen the industry's ability to
modernize and compete effectively.