The Asian financial crisis and the subsequent serious downturn in these and other key markets led to a decline in our exports last year. At the same time, the strength of the U.S. economy has kept U.S. demand for imports at a high level. This is what is driving our rising trade deficit. While recognizing that certain sectors of our economy have been hit hard by slower growth overseas and stronger imports, imports play a positive role in the U.S. economy. They provide consumer freedom of choice, fill a market demand that may not be available domestically, and are often incorporated as components into American-made final products.
Imports also provide a healthy dose of competition.
In fact, the competitiveness fostered by our openness to imports is one of the fundamental reasons our economy is as strong as it is today. Finally, the United States, like other countries, has trade laws to deal with injurious imports. American economic leadership in bolstering global economic growth and U.S. exports can help stem the rising U.S. trade deficit. This means stabilizing economies in turmoil in Asia and Latin America, keeping markets open, further liberalizing trade and investment, and making sure American exporters and workers have the necessary tools from our government to compete globally on a level playing field. These tools include establishing predictable and effective trade rules, negotiating market-opening trade agreements, halting the use of counterproductive unilateral economic sanctions, and providing competitive export and investment financing.