Perceptions in the United States about the U.S. merchandise trade deficit are almost exclusively focused on the newly emergent Chinese economy and its trade balance with America. One would think that the Chinese trade is causing serious problems for the U.S. economy. In fact, the way trade issues are expressed by mainstream media, trade with China is a major component of U.S. trade. This is a gross misrepresentation.
Based on 2004 trading data, Chinese trade accounts for only 13% of U.S. imports. By comparison, 28% of U.S. imports come from its NAFTA partners, Canada and Mexico. In terms of export markets, NAFTA partners account for 37% of total U.S. exports. Of course, the issue for critics of trade with China is the anemic export totals to China – merely $37.4-billion or 4% of total U.S. exports. The end result is a trade deficit with China that reflects the immaturity of the Chinese market. However, the trade deficit with NAFTA partners, at $111.9-billion (compared to $162-billion trade deficit with China) reflects how important continental trade is to the U.S. picture.
The trade interdependency of the NAFTA nations is well established, but the monetary implications of these relationships does not seem to attract the same level of evaluation as other less significant trading relationships. Surely once a discussion of trade and monetary integration in the NAFTA framework seriously commences the important capital implications of union will motivate the political forces in the United States. The continental framework, and perhaps an Americas (North and South) framework would counteract the presumed ascendancy of China in world trade.