Japan External Trade Organization
(2) Changes in Trade Environment
(3) Developments in Trade with Japan
A look at U.S. trade in 1996 reveals that, despite the rising value of the US dollar, exports rose 6.9 percent over the previous year to US$625.1 billion. This was the result of factors such as the high international competitiveness in the area of the manufacture of capital goods and the low rise in unit labor costs (wages per unit of production) in the manufacturing sector. Imports climbed 7.0 percent to US$795.3 billion reflecting the recovery in personal consumption, continued favorable capital investment, and the resultant strength in the domestic economy. As a result, the U.S. trade deficit rose 7.2 percent in 1996 to a record high of US$170.2 billion.
Canadian exports in 1996, on the other hand, rose 4.0 percent to C$258.4 billion due to the strong economic performance of the U.S., the main destination of its exports. Imports into Canada rose 3.2 percent to C$232.9 billion. The trade surplus consequently climbed 11.7 percent to C$25.5 billion.
The Clinton administration, in its second term, continues to assign the highest priority to balancing the budget and achieving stable economic growth through stressing both domestic demand and increasing exports by opening up global markets. Due in part to the fact that the U.S. trade deficit with Japan declined in 1996, trade relations between the two countries remained stable. The growing deficit in trade with China and problems in intellectual property rights, however, led to an increasing focus on Sino-American relations.
In Canada, the Chretien administration has been working to expand trade by diversifying export markets, such as Chile, with whom Canada concluded a free trade agreement. Additionally, Canada has been emphasizing its trade with Asian countries, and the Chretien government in its second term beginning in June 1997 has also been vigorously pursuing trade relations with Latin America.
In 1996, backed by the recovery in competitiveness of American businesses, the U.S. increased its exports to Japan by 5.1 percent to US$67.6 billion. Imports, on the other hand, fell 6.7 percent to US$115.2 billion. The trade deficit with Japan fell 19.5 percent to US$47.6 billion for the second straight year of decline. Due to the depreciation of the yen and appreciation of the dollar starting in October 1996, however, the trade deficit with Japan is again showing signs of increasing. The U.S. government has been watching this trend carefully.
Canadian exports to Japan dropped 12.8 percent to C$10.4 billion due to the plummeting price of pulp. Canadian imports from Japan also declined in all main items and dropped 13.7 percent to C$10.4 billion. Consequently, the trade deficit with Japan declined 68.0 percent to C$60 million.
This paper is online: http://www.jetro.go.jp/WHITEPAPER/Trade97/index.html
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