Engler on U.S. Trade Surplus with FTA Partners

By July 15, 2008Trade

NAM President John Engler stopped by a reporters’ briefing today to talk about the NAM’s new analysis that shows U.S. trade in manufactured goods is now in a surplus with its Free Trade Partners (see news release in the extended entry):

At a time when there is so much worrisome about the U.S. economy, this is bright spot we ought to be reinforcing. When you’ve a Congress that’s been willing to vote preferences for regions of the world for them to send their goods to us, I would hope that they would treat the U.S. based manufacturers as well as we’ve treated other people all over the globe, and let us send our goods out.

In this audio clip, Engler also discusses the difficulty that faces any Congressional attempt to enact the pending free trade agreements this year. In addition, he looks at problems the lack of trade promotion authority will pose for a new President, addressing the question: Given the House leadership’s decision to circumvent the rules of consideration and shelve the Colombia FTA, how can you ever enact a new PTA that can be effective? 

Engler also talks about the prospects of the next Doha ministerial meeting in Geneva. The NAM’s Frank Vargo, vice president for international economic affairs, will be on hand.

Stories from today:


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“Indisputable Proof that Trade Agreements Work for America,” Says Engler


WASHINGTON, July 15, 2008 – The National Association of Manufacturers (NAM) announced today that manufactured goods trade with U.S. free trade agreement (FTA) partners has moved into surplus for the first time.

“This is huge, and people need to take notice,” said NAM President John Engler. “Contrary to the widely-held view that our trade agreements are the cause of the U.S. trade deficit, FTAs are actually the brightest part of our trade picture.

“Through May, manufactured goods trade with our FTA partners was in surplus by nearly a half billion dollars,” said Engler. “While this is a modest surplus, it contrasts sharply with our $176 billion deficit with countries who are NOT our free trade partners.

“Moreover, this surplus reflects an improving trend in trade with FTA partner countries that has been going on for five years,” said Engler. “In 2002 the manufactured goods deficit with those countries was $41 billion (11 percent of our total manufactures deficit), but by 2007 the deficit had fallen to $27 billion (5 percent of the deficit). And now, so far in 2008, the deficit is gone. We have a surplus.

“This is going to come as a shock to many in the Congress who have been misled by isolationists telling them a ‘failed trade policy’ of bilateral trade agreements has been at the heart of our trade deficit,” Engler said. “Nothing could be further from the truth, and I call for quick approval of the agreements now pending before Congress – Colombia, Korea, and Panama – so we can get even more benefits from FTAs.

“The facts are indisputable: trade agreements work for America,” said Engler. “While we don’t necessarily expect trade agreements to generate surpluses, we do expect them to create a level playing field where America’s manufacturers and workers can compete fairly, and clearly that has been happening. Holding back more trade agreements will only harm the expansion of U.S. exports, which are now the mainstay of the U.S. economy.

“Every day that Congress continues to delay in passing the Colombia agreement, for example, costs U.S. manufacturers about $2 million in additional import penalties they have to pay to sell U.S.-made goods in Colombia,” Engler stressed.

Census Bureau data below show how the U.S. manufactured goods trade balance with FTA partners has improved over the last five years and moved into a surplus position.

Manufactured Goods Trade Balance with Free Trade Partners and Rest of World, 2002-2007 and Jan-May 2008



Billions of Dollars




























Total, All FTA Partners




























































Non-FTA Partners










Total, All Countries










FTA % of Total










Source:  Foreign Trade Division, Census Bureau, U.S. Dept of Commerce

SITC 5-9 Total Exports less General Imports



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