WASHINGTON - February 13 - Today’s announcement that the U.S. trade deficit hit $764 billion in 2006, up 6.5 percent since last year’s record-breaker, is further evidence that our nation’s trade policies are broken and badly in need of an overhaul.
Every day we continue following the Bush Administration's path on trade, we feed a dangerous, unsustainable deficit. This Administration has utterly failed to enforce the trade laws and trade agreements we have in place, it has failed to get the Doha Round on track to address the concerns of American workers and farmers, and it has continued to negotiate NAFTA-style trade agreements that accelerate the outflow of good jobs from this country. Congress must act immediately to reevaluate the flawed policies that led to this enormous imbalance before we reach the point of no return.
Our trade deficit has set records in each of the last five years. The last thing we need to do is extend George W. Bush’s fast track authority so he can negotiate more of the kind of failed trade deals that got us into this trouble in the first place. We will be fighting any extension of fast track this year and any new bilateral free trade agreements modeled on the failed NAFTA template.
The deficit in goods hit $836 billion, up 6.8 percent over last year. The trade deficit with China alone grew by 15 percent, providing additional evidence that the Chinese government's manipulation of its currency is still distorting global trade flows.
While we saw healthy growth in exports in 2006, which we welcome, it’s troubling that the trade deficit grew by almost $50 billion and hit another record high despite the solid growth in exports. The imbalance between our imports and our exports is so enormous now that our exports would need to grow at least 53 percent faster than our imports just to keep the trade deficit from growing. Unfortunately, we are far from realizing that goal.
On the policy front, this means we face enormous challenges in turning around our trade deficit and rebuilding our trade-sensitive manufacturing sector.
On the trade front, we need to tackle currency manipulation, worker rights abuses, unfair trade practices, and our own corporate tax code for starters. On the home front, we need to invest in our workers, shore up our K-12 and higher education systems, and ensure that our infrastructure and communications networks are suited for a highly competitive 21st century global economy.
It’s long past time for a correction in course on trade. Congress must reject any trade agreement that does not provide adequate workers’ rights and environmental protections. Congress must also act quickly to pass the Fair Currency Act of 2007 (HR 782), which would stop countries like China from gaining an unfair advantage by manipulating their currencies.