World Trade
EARL ANDERSON, Senior Editor
Tricks with trade statistics
Did the U.S. really have a trade surplus of $2.7 billion last year as the official trade statistics indicate? Or did it have a trade deficit of $1.7 billion? Or a deficit of $3.2 billion? It all depends on what figures you pump into the equation—and what ones you leave out. According to current reporting practice, the U.S. has chalked up a long, consistent string of trade surpluses, even if the surplus has dwindled over the past few years. However, Sen. Russell B. Long (D.-La.), chairman of the Senate Finance Committee, and many others believe that our foreign trade statistics are fraudulent and misleading. If the trade balance were calculated to show an honest-to-goodness "commercial" trade balance, says Sen. Long, we would find that the U.S. has been carrying a trade deficit for the past four years. The trade balance is the difference between the values of exports and imports. If your exports exceed imports, you have a trade surplus. If imports exceed exports, you have a trade deficit. Currently, the exports used to calculate trade balance are "exports of domestic and foreign merchandise, excluding military grant-aid." But Sen. Long thinks that all government-financed shipments, not just military grant-aid, should be excluded to arrive at a true "commercial" export figure. Specifically, he says that exports financed under PL-480 (the Food for Peace program) and those financed by the Agency for International Development (AID) under the Foreign Assistance Act should also be excluded from the export total. Calculated this way, last year's $42.7 billion export total shrinks to $40.8 billion. Similarly, Sen. Long says that our import statistics also are misleading. Imports now are reported at their foreign value, or for all practical purposes, their
f.o.b. (free on board) value at the foreign port. Sen. Long and his supporters argue that the proper basis is their landed value at the U.S. port, or their c.i.f. value (cost, insurance, and freight). Not enough data have been collected to pinpoint just how much higher the value of imports would be on a c.i.f. basis than on an f.o.b. basis. The Department of Commerce says 6.3% higher; the Tariff Commission estimates 10%. Using the 6.3% estimate, last year's $40.0 billion worth of imports increases to $42.5 billion; using 10%, $44.0 billion. Either way, the higher import values coupled with lower "commercial" export values transform the 1970 trade surplus into a trade deficit. After four years of fighting to get the trade statistics revised, Sen. Long has achieved only a partial victory. "Commercial" exports and c.i.f. imports are now reported on a quarterly basis, but they are inconspicuously set aside from the regular trade statistics. Recently, Sen. Long apparently convinced Secretary of Commerce Maurice Stans that the revised trade statistics should be published prominently on a monthly basis along with the regular trade statistics. And, apparently, Secretary Stans received the green light from the President. However, "nameless and faceless bureaucrats," as Sen. Long calls them, have just as apparently sidetracked the proposal. So last month, Sen. Long introduced S. 1815, a bill that he says "would by statute direct the publication of the statistics which the President's bureaucracy refuses to publish." The same bill was introduced last year as part of the aborted trade bill. Here's hoping it passes this time. Controversial statistics make interesting reading.
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