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Well, the overall news is bad. We are now running a trade deficit with Canada to the tune of over $65 billion per year -- definitely not something we were promised when NAFTA was being touted.

But somehow this article forgot to mention the good news that "The 2004 exports of goods and services ($1,146.1 billion) and 2004 exports of goods ($807.6 billion) were records." (Trade Highlights for 2004 from the Bureau of the Census.) (There are a few factors about exports made for re-importation that probably should be netted out, though even if they were, it probably would still be a record year for overall exports.)

Also in the good news from the foreign trade area from the same Census report:

Exports

    * Exports in 2004 of $819.0 billion were a record.
    * The 2004 exports of foods, feeds, and beverages 
($56.3 billion); industrial supplies and materials 
($203.6 billion); automotive vehicles, parts and engines
($88.2 billion); and consumer goods ($102.8 billion) 
were records.
    * The 2004 exports of capital goods ($331.1 billion)
were the highest since 2000 ($356.9 billion).

I had hoped that capital goods would have been a bit better, but still it is some progress. We can hope that the cheaper dollar should help more on the exports side for 2005, though if we don't do something about our level of imports, the cheaper dollar will mean that we will be paying more for the same volume of goods imported.

It's a pity that services are now getting close to a wash; we have run a good surplus in the past in services, but it's now dropped to less than $50 billion for 2004.

But the disturbing number is the rampant growth in the import of goods. In 2002, we imported $1.164 trillion in goods; in 2004, that had leaped to $1.473 trillion, a growth of 27% in two years. That's not a sustainable trend when our GDP is growing at 4% per year. (Figures from the Bureau of Economic Analysis.)

The good news is that exports also grew 17% in two years. If we could just manage to switch those two and get exports growing at a much faster pace than imports, then the trade situation would certainly be better.

We are now running a trade deficit with Canada to the tune of over $65 billion per year -- definitely not something we were promised when NAFTA was being touted.

I'm reasonably sure that NAFTA did not require exact matches of exports and imports for its sponsor countries. NAFTA promised increased exports for Mexico USA and Canada. Did we increase our exports to Canada? If so NAFTA delivered. What matter if Americans have the income to buy more than we sell. We make money selling things to ourselves as well.

The times we see a shrinking trade deficit are during recessions because Americans do not have disposable income to purchase foreign goods.

Thank you for the link pointing me to the latest trade data.