Import growth may slow. With the U.S. economy assumed to grow at a rate closer to its long-term trend, import growth will decline somewhat from its rapid pace of the past two years to a range of 7 to 8.5 percent. This would be more in keeping with its average annual rate of growth of 6.9 percent since 1990. Trade deficit may improve. However, a significant improvement cannot take place without a reduction in the U.S. budget deficit, an increase in other domestic saving, or both.
Competitiveness is critical.
To be effective in lowering the trade deficit, policies to increase national saving must be accompanied by policies that increase U.S. competitiveness in world markets. The United States needs to continue increasing productivity through better training and education, commercialization of technology, increased investment and more vigorous export promotion programs. A primary objective of the U.S. Global Trade Outlook is to provide insight into the trade prospects of a number of key sectors of the U.S. economy. These sectors were selected to provide a cross-section of U.S. industries that are heavily involved in the global economy. In subsequent reports we plan much more extensive coverage.