DEPOSITED BY THE

UNITED STATES OF AMERICA

FACTS ABOUT FOREIGN TRADE

On January 9, 1958, President Eisenhower told Congress that the Nation's two
principal tasks were "to insure our safety through strength" and to work construc-
tively for the building of a genuine peace. In an eight-point "outline of action
designed to focus our resources upon the two tasks of security and peace," the Presi-
dent included this statement, quoted in part below, concerning the importance of
mutual trade:

"World trade supports a significant segment of American industry and agri-
culture. It provides employment for 41⁄2 million American workers. It helps supply
our ever-increasing demand for raw materials. It provides the opportunity for
American free enterprise to develop on a worldwide scale. It strengthens our
friends and increases their desire to be friends. World trade helps to lay the ground-
work for peace by making all free nations of the world stronger and more self-reliant.

"America is today the world's greatest trading nation. If we use this great
asset wisely to meet the expanding demands of the world, we shall not only provide
future opportunities for our own business, agriculture, and labor, but in the process
strengthen our security posture and other prospects for a prosperous, harmonious
world."

In order to illustrate some of the basic facts about U. S. foreign trade, the
Department of State has prepared the following series of charts. In general they
demonstrate the importance to the U. S. economy of our exports and imports and
describe the problem of the "trade gap.

The U.S. Foreign Trade Story

The First Chart illustrates the dramatic increase in the level of our imports
and exports since World War II. It also shows that for nearly half a century we
have consistently sold more than we have bought from abroad. The irregular white
band running through the upper part of the chart represents "the trade gap" or the
amount of the difference between what we buy from other countries and what we
sell to them. (Separate statistics for military and nonmilitary trade for the war
years are not available.)

U.S. Government grants and loans from 1941 to 1951 were a major source of
the dollars used to fill this "trade gap" (lower graph). In recent years public grants
and loans have declined. U.S. private investment abroad has helped to fill the gap
but has not increased enough to do the job alone. During 1956 and 1957 a number
of foreign countries found it necessary to borrow unusually large amounts from
international lending institutions--in particular the International Monetary Fund--
in order to meet their import needs. This situation poses important problems for
the United States and its free-world allies. In these circumstances the U.S. faces
three choices in its trade policy:

1. We can accept cuts in exports with resultant declines in domestic employ-
ment and production;

2. We can meet the trade deficit with more money from the public treasurythe taxpayer's pocket; or

3. We can face the economic facts of life and recognize that the only way we can export is to be willing to receive payment in increased imports of goods and services.