Maybe it's time for the Legislative Branch to play hard ball on trade negotiations, because it sure seems the Executive Branch has dropped the ball.
I’ve been thinking about trade. Actually I've been thinking about our April consumption, our deficits, oil/ petroleum consumption, our debt holders, and fast tracking. What happened in April 2007 may seem like ancient history in a global economy which turns on a dime and where Billions of “dollar” denominated transactions are consummated at the click of the enter key. There is a time lag between when these transactions occur, and when they are compiled for release to the general public by the Federal agencies which track them. But . . . does anybody care what transpired economically—or worse . . . what seems looming on the horizon for us?
You see it is a sorry situation when there is more coverage and commentary about these data in the international media than in our own domestic press. Is this because our addiction to consumption of foreign goods, services, and energy (that is “deficit financed” by these same foreign $ugar daddies) is bleeding this country dry or is this just too depressing for our nationals to contemplate? Is it that Uncle $ugar's biased and one-sided “free trade” working against US/us in the global marketplace is simply beyond the grasp of American public? I understand why the foreign media covers such trends for their readers on a regular basis—they sell Us/us their stuff, and we sell them our public debt and debt instruments! They WANT to know where they stand—so why is it that our people, our business moguls, and our elected officials don't seem to care?
Our eight largest trade deficits for the month of April 2007 (and 2007 Year to Date) are as follows: China $19.374 Billion ($76.324 Billion YTD), Japan $7.365 Billion ($27.974 Billion YTD), Canada $5.808 Billion, ($23.237 Billion YTD), Mexico $5.215 Billion ($21.589 Billion YTD), Germany $3.841 Billion ($14.087 Billion YTD), Venezuela $2.311 Billion ($7.566 Billion YTD), Ireland $2.052 Billion ($7.243 Billion YTD), and Saudi Arabia $1.985 Billion ($6.312 Billion YTD). Considering that our hands-down overall biggest dollar denominated imports are for crude oil and petroleum distillates, just WHAT are we hocking our souls for in what we are getting from China, Japan, Germany, and Ireland? By the way as an aside . . . our biggest trade surpluses are with the Netherlands with an April surplus of $1.427 Billion and a YTD surplus of $6.475 Billion. Suddenly . . . I find myself loving the Dutch!
We continue to depend on foreign suppliers for more than two-thirds of our current level of energy consumption—with an ever narrowing mix of the suppliers. The top eight sources of Uncle $ugar's crude oil imports for April 2007 were: Canada (1.909 Million barrels per DAY-MBPD), Mexico (1.460 MBPD), Saudi Arabia (1.458 MBPD), Venezuela (1.182 MBPD), Nigeria (0.891 MBPD), Iraq (0.562 MBPD), Algeria (0.530 MBPD), and Angola (0.514 MBPD). Uncle $ugar's top eight sources of total petroleum imports for April 2007 were: Canada (2.479 MILLION barrels per DAY-MBPD), Mexico (1.572 MBPD), Saudi Arabia (1.488 MBPD), Venezuela (1.412 MBPD), Nigeria (0.948 MBPD), Algeria (0.798 MBPD), Iraq (0.562 MBPD) and Russia (0.550 MBPD. The April import value of crude oil ($17.5 billion) was the highest since September 2006 ($19.7 billion) and the April import average price per barrel of crude oil ($57.28) was the highest since September 2006 ($62.40). Crude in July is now over $72.
Foreign holdings of US Treasury Securities have more than doubled under the Bush Administration—from $1.040 Trillion in January 2001 to $2.224 Trillion in April 2007. At the end of April 2007 China held $414.0 Billion (up 573%), Japan held $614.8 Billion (up 97%), the United Kingdom held $134.2 Billion (up 181%), the oil exporters held $112.2 Billion (up 131%) and the remaining share of the rest held by others outside US/us jumped 65%. I find this turn of financial fortune appalling. The ongoing relative value decline of the dollar isn't helping either.
Last week the prerogative of “fast tracking” trade deals—whereby Congress can only vote up-or-down a trade agreement submitted by the President-lapsed; Congress refused to renew the tradition of deferring all such details to the White House. Maybe it's time for the Legislative Branch to play hard ball on trade negotiations, because it sure seems the Executive Branch has dropped the ball.
I'm Fred Cederholm and I've been thinking. You should be thinking, too.
Copyright 2007 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at email@example.com
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This story was published on July 12, 2007.