Friday, August 24, 2012

Twenty years of trade deficits

Here is a chart from the trusty FRED database at the FRB:

The US has run a trade deficit since the beginning of the Clinton administration.  The passage of NAFTA and allowing China to have permanent normal trade relations (PNTR) status in P.L. 106-286, which President Clinton signed into law in October 2000 facilitated China’s accession to the WTO in December 2000 and contributed significantly to the deficit.  The big explosion in US trade deficits with China occurred after accession to the WTO.

It appears that Ross Perot's prediction of job losses after passage of NAFTA, along with preferred trade status for China, was accurate.

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