Free Trade Agreements, Part of the Solution

By May 28, 2010Trade

The NAM’s Frank Vargo, refuting the anti-trade Global Trade Watch, in a letter in today’s The Hill newspaper, “GTW needs to recognize FTAs are part of solution“:

The facts are clear – the Commerce Department’s Export Fact Sheet from April 13 states, “With exports exceeding imports, the U.S. has a trade surplus in manufactured goods with its FTA partners. In just the first two months of 2010, the trade surplus in manufactured goods with our trade partners totaled $3.0 billion.”

As for the Peru agreement that GTW states is not growing? The same fact sheet says, “The U.S. trade surplus in manufactured goods with Peru has grown 173 percent in the first two months of 2010.”

GTW makes a severe miscalculation in their trade deficit calculation by subtracting re-exports from the export side of the trade balance and neglecting to subtract them from the import side. This miscalculation drastically overstates the U.S. manufactured goods trade deficit by $114 billion in 2009. According to the Census Bureau’s Foreign Trade Division and the International Trade Administration’s trade analysis office this method used by GTW is not a legitimate way to calculate the trade deficit.

Yeah, never get in a data-driven dispute with Frank Vargo. He really knows his numbers.

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