WORLD TRADE EARL ANDERSON, Senior Associate Editor
Lying dormant, for the moment at least, in the Senate Finance Committee and the House Ways and Means Committee are two identical resolutions ( S J . Res. 115 and H.J. Res. 696) which call for changes in the methods of reporting U.S. trade statistics. Should hearings on these resolutions be held, as soon they may, they could provide the liveliest battleground for verbal warfare between protectionists and freetraders since the hearings on the Trade Expansion Act of 1962. Basically, the resolutions ask that our export statistics exclude re-exports (of imported foreign goods), that they define the amount of exports produced under government subsidy, and that they show the amount exported under government-financed programs. And, according to the resolutions, imports should be reported at landed, or c.i.f. (cost, insurance, and freight), value as they are in most other countries, rather than at their foreign value as they are now reported. On the surface, there is nothing controversial about these requests. In this age of the information explosion, they simply seek to provide more detailed information about our import and export trade. To argue against them is to argue against motherhood and the flag. But the infighting that lies behind these resolutions and their possible consequences warrants some attention. Demand for these reporting changes stems from a feeling, expressed consistently by the nationwide Committee on Import-Export Policy and echoed by many businessmen, that our trade statistics overstate our true balance of trade and mask our diminishing competitiveness in world markets. Within our persistent balance of payments problem, the one bright spot has been our favorable balance of trade. Last year, this surplus of exports over imports was $5.20 billion, according to the most widely published figure. This calculated surplus was based on exports of $26.57 billion (excluding military grant aid but including $343 million in re-exported foreign merchandise) and imports of $21.37 billion. Proponents of the new reporting system would lower the export total by $2.83 billion, which covers government-sponsored shipments under the PL-480 Food for Peace program and procurements in the U.S. by the Agency for International Development during fiscal 1965. Then, in shifting from a foreign value to a landed value, they would increase the import total by $3.74 billion (or 17.5r/o, which is the figure most often cited in discussing the resolutions). As a result of these adjustments, last year's favorable trade balance of $5.20 billion shrinks to a deficit of $1.37 billion. Now, there is nothing wrong in wanting to know the amount of government-sponsored exports, or the amount of exports produced under government subsidy (although the figure may be a difficult one to pin down), or the freight bill on our imports. These are valuable bits of information. Indeed, they are even available with some bothersome searching through several obscure government publications. The problem is described in the old saw about little lies, big lies, and statistics. It is possible to understate our trade prowess with statistics, just as present statistics may overstate it. For instance, why should imports alone be changed to a landed-cost basis? Why not exports also? Is 17.57
