Dollars Drop in Asia Double-Edged Sword
An article by this title in Forbes magazine explaining how Asian market exporters and importers are reacting to the dollar's depreciation
Help the World’s Poor: Buy Some New Clothes
Help the World’s Poor: Buy Some New Clothes : "Back to school shopping leads many people to buy apparel that was made in sweatshops. Rather than feel guilty for “exploiting” poor workers, shoppers should rejoice. Their spending is some of the best aid we can give to people in poorer countries." So says Benjamin Powell on the always provocative AidWatch blog. Liberal New York Times columnist and Economics Nobel Prize international economist Paul Krugman wrote an earlier and now often cited statement along similar lines titled " In Praise of Cheap Labor: Bad jobs at bad wages are better than no jobs at all ." Do you agree with these arguments?
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Offers U.S. Path to Press Beijing
Overall Gap Declines 8.4%
Amid Sharp Drop in Crude;
Stronger Hand for Paulson
By GREG HITT
December 13, 2006; Page A2
WASHINGTON -- The latest snapshot of U.S. trade flows gives Treasury Secretary Henry Paulson plenty of ammunition to press Beijing to step up efforts to open China's economy.
[Henry Paulson]
While the U.S.'s overall trade deficit fell, the imbalance with China rose for a third straight month, jumping 6.1% in October from September, to $24.37 billion, the Commerce Department said yesterday. The increase reflected a swell of Chinese imports, from toys and sporting goods to televisions and computers, as retailers stocked shelves for the holiday shopping season.
U.S. trade figures were promising on other fronts. The overall deficit dropped 8.4% in October from the previous month on a sharp decline in crude-oil prices. Economists said international trade may give a lift to the slowing U.S. economy at a time when the dollar is also on the decline.
In the first 10 months of the year, the trade deficit with China -- by far the largest gap it has with a single country -- totaled $190.63 billion, putting it on pace to smash last year's record of $201.66 billion.
The trade numbers, preceding a trip by Mr. Paulson and other senior officials to China this week to discuss how to ease strained bilateral trade ties, raise pressure on Mr. Paulson to move more aggressively in dealing with Beijing.
In recent years, the U.S. trade deficit, especially with China, has become an important political symbol. As public concerns about free trade and globalization have increased, much of the angst has focused on China. Many lawmakers have urged the Bush administration to take a tougher line toward China, a trend likely to intensify when Democrats take control of Congress in January.
[Talking Point]
For October, the overall U.S. trade gap in goods and services totaled $58.88 billion, the lowest in more than a year. Imports declined as the nation's bill for foreign fuel fell, and exports edged up 0.2% to $123.63 billion on demand for pharmaceuticals, pleasure boats and other consumer goods.
The monthly trade numbers are particularly important as the U.S. dollar appears to be succumbing to the decline that forecasters long have predicted. A large and rising trade deficit often triggers a declining currency, which, in turn, can help shrink a trade deficit by making exports more attractive and imports more expensive.
The modest increase in exports in October and the decline in imports, of oil and other goods, are welcome as the U.S. economy is slowing. The "much-better-than-expected improvement" is "substantially mitigating downside risks" that the U.S. economy would expand at slower than a 2% inflation-adjusted pace in the fourth quarter, Goldman Sachs economists said. "If sustained at this level, the trade balance would add about one percentage point to fourth-quarter growth."