Remarks by Secretary of Commerce Donald L. Evans

In Response to U.S. International Trade Data for May 2001

July 19, 2001

Washington, DC

[As Prepared For Delivery]

I am optimistic about our nation's economic future, and today's economic news is consistent with that.

Following three years of a sharply rising trade deficit, we've seen a leveling-off in the past nine months -- to an average of roughly $32 billion a month. During this period, we've seen both imports and exports decline, but imports have fallen more rapidly. This month the deficit has fallen even further - to $28 billion, its lowest level since January 2000.

Secretary Donald Evans speaking on U.S. International Trade Data for May 2001.

Slower growth in the U.S. has reduced our demand for foreign goods and services. At the same time, however, slower growth in many foreign economies has decreased the demand for our exports. Real GDP growth in Canada, our largest trading partner, dropped from a 5-percent pace in the first quarter of 2000 (year-over-year) to a 2.5-percent pace in the first quarter of this year, while Mexico's growth fell from an 8-percent pace to a 2-percent pace. Many Asian economies, including Japan, are flirting with recessions. Elsewhere around the world, China's growth remains strong; European growth continues, albeit more modestly; and growth in South America is deteriorating.

So why am I optimistic?

International trade is more important to our economy than ever before. Today's data, along with other recent economic indicators, show our nation has a lot of room to grow, particularly in the global marketplace. and President Bush has a solid agenda to nurture that growth. At the top of that agenda is Trade Promotion Authority for the President.

The United States has historically played a leadership role in international trade, constantly pushing for more freedom - and fairness - in the global marketplace. This has been, and continues to be, in our nation's best economic interest.

Trade liberalization has been a key factor leading to our excellent performance, including the longest post-war period of economic expansion. Exports accounted for nearly one-quarter of the economic growth our nation experienced in the last decade.

When NAFTA and the Uruguay Round were implemented in 1995, total private sector productivity in the U.S. has increased an average of 3 percent a year. And our goods and services exports have grown even faster than the U.S. economy, increasing 7 percent a year.

Even as today's numbers show that the overall deficit continues to reflect large deficits in consumer goods, automobiles and oil, the U.S. continues to maintain a trade surplus in services and in capital goods.

Exports support 12 million jobs in our country today, and those jobs are good jobs - they pay as much as 18% more than the national average.

The bottom line is this: free trade is good for America's economy. It's good for American workers - it creates good-paying jobs. It is good for consumers - it expands their choices. It is good for entrepreneurs - it brings new customers within reach. And it's good for the nation - it fuels economic growth and a higher standard of living.

There is tremendous potential for U.S. growth in the international marketplace. But much of that potential remains untapped.

There are 130 free trade agreements in the world today; the United States is party to only two.

We must get off the sidelines and back into the game. Trade Promotion Authority is a critical component of America's leadership in the world marketplace. As Alan Greenspan said in testimony before Congress yesterday, Trade Promotion Authority is "important and indisputable for continued cutting-edge growth."

I'm hopeful and optimistic that Congress will pass Trade Promotion Authority.