TRADE GAP NARROWEST SINCE '83

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 21, 1992                   TAG: 9202210127
SECTION: BUSINESS                    PAGE: A-3   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium
TRADE GAP NARROWEST SINCE '83
America's trade deficit improved dramatically in 1991, falling below $100 billion for the first time in eight years as exports hit a record high and the recession held down goods purchased from overseas, the government reported Thursday.
While the 35 percent drop in the trade imbalance to $66.2 billion represented America's best trade performance since 1983, analysts saw plenty of problems ahead.
For one thing, America's deficit with Japan rose in 1991, by 5.7 percent to $43.44 billion. The deficit to Japan represented two-thirds of the total imbalance.
And the overall deficit worsened considerably in December, rising by 42 percent to $5.94 billion as U.S. exports fell for a second straight month and imports climbed 2.3 percent.
Analysts have predicted the trade gap will widen considerably this year as export growth falters because of weakness in many of America's major overseas markets.
"The success of U.S. exporters in international markets continues to be the bright spot in the U.S. economy. Exports will make a strong contribution to the economic recovery this year and to the expansion of U.S. jobs," said Acting Commerce Secretary Rockwell Schnabel.
But David Wyss, chief financial economist for DRI-McGraw Hill, said he thought 1991 would represent the high-water mark for America's trade performance for years to come. He predicted the deficit would approach $100 billion again by 1994.
"Until we get U.S. productivity up to where it ought to be, we are going to have a trade problem," he said.
Much of last year's improvement reflected stronger sales in Latin America and Europe, where America's trade surplus registered a four-fold increase to $16.13 billion.
The $66.2 billion trade deficit for all of 1991, the lowest since a $52.4 billion 1983 deficit, was $35.5 billion below 1990's gap of $101.7 billion. The record deficit was $152.1 billion set in 1987.
Much of last year's improvement reflected the effects of the U.S. recession, which dampened demand for foreign goods. Imports fell by 1.5 percent to $488.06 billion. Oil imports dropped by $10.3 billion and car imports were down $2 billion.
American exports climbed to a record $421.85 billion last year, up 7.2 percent from the previous year. Big export gainers were aircraft sales, up $4.2 billion, and computers and semiconductors, up $2.3 billion.

by Bhavesh Jinadra by CNB