8A
Wednesday, September 21, 1994
Sat. October 1 Kansas Union
9:00 am - 3:30 pm Conference
9:00 am - 3:30 pm Conference
3:30 pm - 6:30 pm Community Service Project
Conference fee is $12 prior to Sept. 23rd
Late registration fee is $15 until Sept. 27th by 5:00 pm
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NATION/WORLD UNIVERSITY DAILY KANSAN
Trade deficit grows larger
The Associated Press
WASHINGTON — The government said yesterday that rising oil prices and a drop in airliner sales in July gave the nation its second worst merchandise trade deficit in history, which sent financial markets into a tailspin.
The Commerce Department said the overall deficit in goods and services surged 21.6 percent to $10.9 billion as imports remained near an alltime high and exports weakened considerably.
The worse-than-expected deficit figure, which followed a June shortfall of $9.04 billion, rattled Wall Street. Stocks, bonds and the dollar weakened.
Analysts said the weaker dollar would only add to inflationary pressures and increase the prospect that
the federal Reserve would be forced to boost interest rates for a sixth time this year, possibly as soon as the next Fed policymakers meeting Sept. 27 in Washington.
The disappointing trade performance and rate increase fears sent the Dow Jones industrial average down by nearly 68 points, with the 30 blue-chip stocks losing 1.72 percent of their value. The yield on Treasury's benchmark 30-year bond, which moves in the opposite direction of its price, climbed to 7.78 percent.
Commerce Secretary Ron Brown said the dramatic widening of the deficit was "not indicative of the economy's long-term trend." The Clinton administration insisted the trade deficit would shrink in coming months as faster growth in Europe and Japan helps increase demand for U.S. exports.
Allen Sinai, chief economist at Lehman Brothers in New York, said it was critical for export growth to rebound to keep the U.S. economy out of recession.
So far this year, America's merchandise deficit is running at an annual rate of $145.6 billion, which is the second worst in history. The biggest merchandise trade deficit was a $152.1 billion imbalance in 1987.
The administration has pushed both countries this year to open their markets to more American goods but has met with little success.
As usual, the biggest monthly deficit—a shortfall of $5.67 billion, which is the worst showing since March—was with Japan. The deficit with China rose 8.6 percent to an all-time high of $2.67 billion.
Committees agree on trade accord
The Associated Press
WASHINGTON — Lawmakers yesterday approved recommendations to President Clinton for putting a new, tariff-reducing, 123-nation world-trade accord into force.
After weeks of contentious talks, members of House and Senate committees that deal with trade reached agreement on most provisions of a bill implementing the pact negotiated under the General Agreement on Tariffs and Trade.
Because the legislation cannot be amended once it is introduced, the Clinton administration has engaged in a lengthy consultation process
with congressional committees before it actually submits its proposal.
The consultation period ended late yesterday afternoon with unanimous votes by delegates from the Senate Finance and House Ways and Means committees. The two panels resolved most of their differences and agreed on a financing package to offset $12 billion in tariff revenues expected to be lost during the agreement's first five years.
GATT would cut worldwide tariffs by about a third and reduce other barriers to trade.
"It is the largest world-trade agreement in history. It means more jobs and growth and higher incomes for ordinary Americans," Clinton said.
Opponents, however, say the agreement gives too much power to a new World Trade Organization, which would police the accord.
They fear world-trade bureaucrats will use the threat of huge fines to force changes in federal and state laws on everything from auto-emission standards to protecting porpoises from tuna nets.
Many union leaders also oppose the pact, fearing it will push thousands of jobs in the textile and apparel industries to low-wage countries.