U.S. Trade with Free Trade Agreement (FTA) Partners

Congressional research reportApr 24, 2018

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U.S. Trade with Free Trade Agreement (FTA)

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Specialist in International Trade and Finance

Updated April 24, 2018

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R44044

U.S. Trade with Free Trade Agreement (FTA) Partners

Summary

During the Obama Administration, the United States negotiated two mega-regional free trade

agreements that its participants argued were comprehensive and high-standard: the Trans-Pacific

Partnership (TPP) among the United States and 11 other countries, and the U.S.-European

Transatlantic Trade and Investment Partnership (T-TIP). The 12 TPP countries signed the

agreement in February 2016, but the agreement required ratification by each country before it

could enter into force. In the United States, this required implementing legislation by Congress.

Upon taking office, President Trump withdrew the United States from the TPP and halted further

negotiations on the T-TIP, but may reengage in the TPP under different terms. The remaining 11

partners to the TPP concluded, without U.S. participation, a revised TPP, now identified as the

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Trump

Administration is also attempting to revise the two largest existing U.S. FTAs, through the

ongoing renegotiation of the North American Free Trade Agreement (NAFTA), and modification

talks regarding the U.S.-South Korea (KORUS) FTA.

President Trump has addressed trade broadly and trade agreements more directly through an

assertive trade enforcement agenda and vocal skepticism of past U.S. trade agreements and the

potential benefits of trade. The Trump Administration has characterized U.S. trade agreements as

unfair and detrimental to the economy, a viewpoint that is not shared by U.S. trading partners,

established economic analysis, and various business and consumer groups. For some observers,

the growing globalization of the economy raises concerns that the cost of U.S. leadership in the

global arena is outstripping the benefits of U.S. global engagement. Others argue that the United

States needs to renegotiate its role and require others to share more of the costs. The Trump

Administration’s approach does not rule out the possibility that some countries are not fully

abiding by international trade agreements and rules. Such actions may distort market performance

and erode public support for the international trade system.

Discussions of FTAs often focus on trade balances, particularly U.S. bilateral merchandise trade

balances with its FTA partner countries, as one way of measuring the success of the agreements.

Although bilateral merchandise trade balances can provide a quick snapshot of the U.S. trade

relationship with a particular country, most economists argue that such balances serve as

incomplete measures of the comprehensive nature of the trade and economic relationship between

the United States and its FTA partners. Indeed, current trade agreements include trade in services,

provisions for investment, and trade facilitation, among others that are not reflected in bilateral

merchandise trade balances.

This report presents data on U.S. merchandise (goods) trade with its Free Trade Agreement (FTA)

partner countries. The data are presented to show bilateral trade balances for individual FTA

partners and groups of countries representing such major agreements as the North America Free

Trade Agreement (NAFTA) and the Central American Free Trade Agreement and Dominican

Republic (CAFTA-DR) relative to total U.S. trade balances. This report also discusses the issues

involved in using bilateral merchandise trade balances as a standard for measuring the economic

effects of a particular FTA.

Congressional Research Service

U.S. Trade with Free Trade Agreement (FTA) Partners

Contents

Background ..................................................................................................................................... 1

U.S. Trade with FTA Partner Countries ........................................................................................... 3

Bilateral Trade Balances ................................................................................................................ 10

Global Value Chains ...................................................................................................................... 14

Issues for Congress ........................................................................................................................ 15

Figures

Figure 1. U.S. Merchandise Trade: Exports, Imports, and Balances, 1980-2017 ........................... 2

Figure 2. Global Trade, Percentage Change, Volume and Value, 2000-2018 .................................. 3

Figure 3. U.S. Merchandise Trade Deficit With FTA Partners as a Share of

Total U.S. Merchandise Trade Deficit, 2007-2017....................................................................... 4

Figure 4. U.S. Merchandise and Services Balances With Major Partner Groups, 2016.................. 4

Figure 5. U.S. Merchandise Exports and Imports by Principal End-Use Category, 2017 ............. 12

Figure 6. Share of Foreign Value Added in Exports, by Country or Region, 2010 ....................... 15

Figure A-1. U.S. Trade With Canada, China, and Mexico (Select years1990-2017) .................... 18

Tables

Table 1. U.S. Free Trade Agreements and Date of Congressional Approval ................................... 1

Table 2. U.S. Merchandise and Services Trade with FTA Partner Countries, 2016 ........................ 5

Table 3. U.S. Merchandise Trade Balances with FTA Partner Countries, 2003-2017 ..................... 7

Table 4. Estimated U.S. Trade Balance of Crude Oil and Products With FTA Partners.................. 8

Table 5. International Trade Commission Estimates of the Economic Effects of

U.S. Trade Agreements................................................................................................................. 9

Table 6. U.S. Long-run Export and Import Elasticities ................................................................. 13

Table B-1. U.S. Trade with Australia: Top 10 Products, 2014 ...................................................... 19

Table B-2. U.S. Trade with Bahrain: Top 10 Products, 2014 ........................................................ 20

Table B-3. U.S. Trade with Canada: Top 10 Products, 2014 ......................................................... 20

Table B-4. U.S. Trade with Chile: Top 10 Products, 2014 ............................................................ 21

Table B-5. U.S. Trade with Colombia: Top 10 Products, 2014 ..................................................... 22

Table B-6. U.S. Trade with Costa Rica: Top 10 Products, 2014 ................................................... 22

Table B-7. U.S. Trade with Dominican Republic: Top 10 Products, 2014 .................................... 23

Table B-8. U.S. Trade with El Salvador: Top 10 Products, 2014 .................................................. 24

Table B-9. U.S. Trade with Guatemala: Top 10 Products, 2014.................................................... 24

Table B-10. U.S. Trade with Honduras: Top 10 Products, 2014 ................................................... 25

Table B-11. U.S. Trade with Israel: Top 10 Products, 2014 .......................................................... 26

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U.S. Trade with Free Trade Agreement (FTA) Partners

Table B-12. U.S. Trade with Jordan: Top 10 Products, 2014 ........................................................ 26

Table B-13. U.S. Trade with South Korea: Top 10 Products, 2014 ............................................... 27

Table B-14. U.S. Trade with Mexico: Top 10 Products, 2014 ....................................................... 28

Table B-15. U.S. Trade with Morocco: Top 10 Products, 2014 .................................................... 28

Table B-16. U.S. Trade with Nicaragua: Top 10 Products, 2014 .................................................. 29

Table B-17. U.S. Trade with Oman: Top 10 Products, 2014 ......................................................... 30

Table B-18. U.S. Trade with Panama: Top 10 Products, 2014 ...................................................... 30

Table B-19. U.S. Trade with Peru: Top 10 Products, 2014............................................................ 31

Table B-20. U.S. Trade with Singapore: Top 10 Products, 2014 ................................................... 32

Appendixes

Appendix A. U.S.-NAFTA Trade .................................................................................................. 17

Appendix B. U.S. Trade with FTA Partner Countries, Top 10 Export and Import

Commodities, 2014 .................................................................................................................... 19

Contacts

Author Contact Information .......................................................................................................... 32

Congressional Research Service

U.S. Trade with Free Trade Agreement (FTA) Partners

Background

During the Obama Administration, the United States considered two mega-regional free trade

agreements that its participants argued were comprehensive and high-standard: the Trans-Pacific

Partnership (TPP) among the United States and 11 other countries, and the U.S.-European

Transatlantic Trade and Investment Partnership (T-TIP). The 12 TPP countries signed the

agreement in February 2016, but the agreement required ratification by each country before it

could enter into force. In the United States, this required implementing legislation by Congress.

The agreements aimed to reduce and eliminate barriers to trade, enhance trade rules and

disciplines, and develop closer economic and strategic ties among the negotiating parties. Upon

taking office, however, President Trump withdrew the United States from the TPP and halted

further negotiations on the T-TIP. The remaining 11 partners to the TPP concluded, without U.S.

participation, a revised TPP, now identified as the Comprehensive and Progressive Agreement for

Trans-Pacific Partnership (CPTPP). The Trump Administration is also attempting to revise the

two largest existing U.S. FTAs, through the ongoing renegotiation of the North American Free

Trade Agreement (NAFTA), and modification talks regarding the U.S.-South Korea (KORUS)

FTA.

President Trump has addressed trade broadly and trade agreements more directly through an

assertive trade enforcement agenda and vocal skepticism of past U.S. trade agreements and the

potential benefits of trade. For the Trump Administration, the U.S. trade deficit often serves as a

proxy for evaluating the success or failure of U.S. trade policy and is viewed as the source of a

number of ills afflicting the U.S. economy, including the rate of unemployment, slow gains in

wages, and income inequality. The Trump Administration also has characterized U.S. trade

agreements as unfair and detrimental to the economy, a viewpoint that is not shared by U.S.

trading partners, established economic analysis, and various business and consumer groups. For

some observers, the growing globalization of the economy raises concerns that the cost of U.S.

leadership in the global arena is outstripping the benefits of U.S. global engagement. Others argue

that the United States needs to renegotiate its role and require others to share more of the costs.

Trade agreement negotiations have sparked a debate over the impact of FTAs on the U.S.

economy and on U.S. trade with its FTA partners, particularly the impact of FTAs on bilateral

trade balances.1 At times, data on U.S. trade with FTA partner countries are provided by various

groups in different formats, which present various conclusions about U.S. trade balances with

FTA partners. This report presents U.S. trade data with its FTA partners in different ways in order

to demonstrate the effect these differences have on conclusions about U.S. trade balances. It also

provides some basic information on the nature of U.S. bilateral trade with its 20 FTA partner

countries. In particular, the data indicate U.S. total trade balances, trade balances with all FTA

partners, and trade balances with the 17 FTA partners with agreements signed after 2000, which

excludes Israel, Canada, and Mexico.

Between 1985 and 2011, the United States entered into 14 FTAs with 20 countries. The countries

and the year in which the agreement received congressional approval are listed in Table 1.

Table 1. U.S. Free Trade Agreements and Date of Congressional Approval

Israel (1985)

Canada (1987)

1 For additional information, see CRS Report R44546, The Economic Effects of Trade: Overview and Policy

Challenges, by (name redacted) , and CRS Report R44551, The Trans-Pacific Partnership (TPP): Analysis of

Economic Studies, by (name redacted) .

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U.S. Trade with Free Trade Agreement (FTA) Partners

Canada FTA subsumed with Mexico under the North

American Free Trade Agreement (NAFTA) (1994)

Jordan (2001)

Australia (2004)

Chile (2004)

Singapore (2004)

Costa Rica, El Salvador, Guatemala, Honduras,

Nicaragua, and the Dominican Republic under the

Dominican Republic-Central America Free Trade

Agreement (CAFTA-DR) (2005)

Morocco (2006)

Bahrain (2006)

Oman (2006)

Peru (2007)

Colombia (2011)

Panama (2011)

South Korea (2011)

Source: Office of the United States Trade Representative.

The U.S. Census Bureau is the official source for data on U.S. import and export statistics for

goods and services. In this memorandum, U.S. merchandise trade data are represented by Census

Bureau data on U.S. total merchandise exports and U.S. total merchandise imports. Data on

services for recent years reflect expanded data on services for countries with which the United

States has negotiated an FTA. The merchandise trade data reported by the Census Bureau are

comparable to the types of data that are reported by other countries. U.S. merchandise trade, or

trade in goods, with FTA partner countries represents nearly 70% of all U.S. exports in goods and

services, and more than 80% of all U.S. imports of goods and services.2 As indicated in Figure 1,

the United States consistently has experienced a deficit in its merchandise goods trade account

since at least 1980. U.S. merchandise exports and imports, and global trade generally, dropped

sharply in 2009 as a result of the global financial crisis, which limited the amount of funds that

were available for trade financing, and the economic recession that negatively affected consumer

spending and business investment.

Figure 1. U.S. Merchandise Trade: Exports, Imports, and Balances, 1980-2017

Source: U.S. Census Bureau. Figure created by CRS.

2 Council of Economic Advisors, Economic Report of the President, February, 2015, p. 390, Table B-5.

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U.S. Trade with Free Trade Agreement (FTA) Partners

Global trade also slowed in both volume and value terms after 2010. Since 2012, trade volumes

have recovered, reflecting an increase in global and major area GDP, while trade values reflect

volatility in commodity prices and exchange rates, as indicated in Figure 2. In part, the slowdown

likely reflects legacy issues associated with the 2008-2009 global financial crisis and recession.

The value of trade has varied, likely due to the drop and subsequent rise in commodity and oil

prices, especially since 2014, reflecting changes in the direction of China’s economic policies,

among other factors.3 The slowdown and subsequent increase in trade volumes likely reflects the

progressive increase in economic growth since 2012 in both developed and developing

economies.

Figure 2. Global Trade, Percentage Change,Volume and Value, 2000-2018

Source: International Monetary Fund. Figure created by CRS.

U.S. Trade with FTA Partner Countries

As Table 2 indicates, the United States experienced an overall merchandise trade deficit in 2016

of $734.3 billion and a surplus in services trade of $247.7 billion, for a combined total of -$486.6

billion. During the same year, the United States ran a merchandise trade deficit of -$71.3 billion

with the 20 FTA partner countries and a services surplus of $68.9 billion, or a goods and services

deficit of -$2.5 billion. The share of the U.S. trade deficit with FTA partners, however, has fallen

by nearly half over the 2007-2017 period, from 18% to about 10% of the total U.S. merchandise

trade deficit, as indicated in Figure 3.

3 See CRS Report RS22204, U.S. Trade Deficit and the Impact of Changing Oil Prices, by (name redacted)

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U.S. Trade with Free Trade Agreement (FTA) Partners

Figure 3. U.S. Merchandise Trade Deficit With FTA Partners as a Share of

Total U.S. Merchandise Trade Deficit, 2007-2017

Source: U.S. Census Bureau. Figure created by CRS.

In trade with the European Union in 2016, the United States ran a goods deficit of -$146 billion

and a services surplus of $54.8 billion, or a combined goods and services deficit of -$91.5 billion,

as indicated in Figure 4. With proposed TPP countries, the United States experienced a deficit in

goods trade in 2016 of -$172 billion, mostly with Japan, Mexico, and Vietnam, and a services

surplus of $75 billion, or a combined total of -$97 billion.

Figure 4. U.S. Merchandise and Services Balances With Major Partner Groups, 2016

Source: U.S. Census Bureau. Figure created by CRS.

In 2016, the 20 FTA partner countries accounted for $677 billion in U.S. goods exports, or 47%

of total U.S. goods exports, and $749 billion in goods imports, or 34% of total U.S. goods

imports. U.S. merchandise trade data with FTA partners has been expressed in various ways,

including the total for all 20 FTA partners, and various subgroups of these 20 partners, as

indicated in Table 2, which lists FTA partners in the order in which the trade agreement was

implemented. For instance, U.S. trade with FTA partners has been expressed by some as trade

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U.S. Trade with Free Trade Agreement (FTA) Partners

with only 17 of the FTA partners, or trade with those countries that implemented an FTA after

2000, thereby excluding U.S. trade with Israel, Canada, and Mexico. The data indicate that in

2016, the United States had an overall merchandise trade deficit with Israel, Canada, and Mexico

of -$83 billion and a services surplus of $30 billion. The United States also ran a merchandise

trade surplus of $12 billion and a services surplus of $38.8 billion with the other 17 FTA partners,

or a combined goods and services surplus of $51 billion. U.S. FTA partners as a group accounted

for 9.7% of the total U.S. merchandise trade deficit, although, as indicated, the largest share of

that deficit is in trade with Israel, Canada, and Mexico. U.S. trade surpluses and deficits with the

other 17 FTA partners are small relative to total U.S. trade.

Table 2. U.S. Merchandise and Services Trade with FTA Partner Countries, 2016

(in billions of dollars)

Goods

Balance

Total

Balance

Services

Exports

Imports

Balance

Exports

Imports

Exports +

Imports

Total All Countries

$-734.3

$1,454.6

$2,188.9

$247.7

$752.4

$504.7

$-486.6

Total FTA countries

$-71.3

$677.5

$748.8

$68.9

$176.1

$107.2

$-2.5

Israel, Canada, Mexico

$-83.4

$511.0

$594.4

$30.0

$91.1

$61.1

$-53.4

17 FTA Partners

$12.1

$166.5

$154.4

$38.8

$84.9

$46.1

$50.9

Israel

$-9.0

$13.2

$22.2

$-1.4

$5.1

$6.6

$-10.5

NAFTA

$-74.4

$497.8

$572.2

$31.5

$86.0

$54.5

$-42.9

Canada

$-11.2

$266.8

$278.1

$24.0

$54.0

$30.0

$12.8

Mexico

$-63.2

$231.0

$294.2

$7.5

$32.0

$24.6

$-55.7

Jordan

$-0.1

$1.5

$1.6

$0.1

$0.7

$0.6

$0.0

Australia

$12.7

$22.2

$9.5

$14.7

$22.0

$7.3

$27.4

Chile

$4.1

$12.9

$8.8

$2.6

$4.3

$1.7

$6.7

Singapore

$9.1

$26.9

$17.8

$9.7

$16.9

$7.3

$18.7

CAFTA-DR

$5.5

$28.9

$23.4

$-2.2

$8.2

$10.4

$3.3

Costa Rica

$1.6

$5.9

$4.3

$-0.8

$2.1

$2.9

$0.8

Dominican Republic

$3.1

$7.8

$4.7

$-2.8

$1.8

$4.6

$0.3

El Salvador

$0.5

$3.0

$2.5

$0.4

$1.1

$0.7

$0.9

Guatemala

$2.0

$5.9

$3.9

$0.6

$1.6

$1.0

$2.6

Honduras

$0.2

$4.8

$4.6

$0.5

$1.2

$0.6

$0.7

Nicaragua

$-1.8

$1.5

$3.3

$-0.2

$0.4

$0.6

$-2.0

Morocco

$0.8

$1.9

$1.0

$-0.1

$0.6

$0.8

Bahrain

$0.1

$0.9

$0.8

$-0.8

$0.3

$1.0

$-0.6

Oman

$0.7

$1.8

$1.1

$0.2

$0.5

$0.3

$0.8

Peru

$1.8

$8.0

$6.2

$1.1

$2.7

$1.6

$2.9

Colombia

$-0.7

$413.1

$13.8

$3.2

$6.2

$3.0

$2.5

Panama

$5.7

$6.1

$0.4

$0.3

$1.5

$1.3

$6.0

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U.S. Trade with Free Trade Agreement (FTA) Partners

Goods

Total

Balance

Services

Exports

Imports

Balance

Exports

Imports

Exports +

Imports

$-27.7

$42.3

$69.9

$10.1

$21.1

$11.0

$-17.6

Trans-Pacific Partnership (TPP)

$-172.4

$657.3

$829.7

$75.2

$184.0

$108.8

$-97.2

European Union (T-TIP)

$-146.3

$270.3

$416.7

$54.8

$231.2

$176.5

$-91.5

Balance

Korea, South

Proposed FTAs

Source: U.S. Census Bureau.

Note. Countries are listed in the order in which the FTA was implemented, or proposed.

The U.S. trade surplus with the 17 FTA partners, excluding Israel, Canada, and Mexico, is a

relatively recent phenomenon, as indicated in Table 3, which shows U.S. trade balances with all

20 FTA partners and subgroups of the FTA partners from 2003 to 2017 listed in the order in

which the FTA was implemented.

Over the 2002-2016 period, the U.S. merchandise trade deficit with all 20 FTA partners fell by

about half as a share of the total U.S. merchandise trade deficit: from 20.7% of the total

merchandise trade deficit in 2002 to 9.7% in 2016. Trade deficits with Canada and Mexico have

generally declined in recent years, despite the fact that oil imports from Canada and Mexico have

remained steady or increased slightly, even as U.S. production of shale oil has increased.

Census Bureau trade data also indicate that of the 20 FTA partner countries, the U.S. deficit in

trade in crude oil and products is the largest with Canada, in part reflecting the close trade

relationship between Canada and the United States and the U.S. trade deficit with Canada in

petroleum trade. As indicated in Table 4, Canada accounted for $48 billion of the $80 billion U.S.

trade deficit in oil and petroleum products in 2015 and Mexico accounted for $1.2 billion of the

energy trade deficit. Canada also accounted for 60% of the U.S. crude oil trade deficit in 2015, up

from 20% in 2008. The sharp decline in the U.S. oil trade deficit largely reflects the sharp drop in

petroleum prices in 2014 and 2015

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Table 3. U.S. Merchandise Trade Balances with FTA Partner Countries, 2003-2017

(in billions of dollars)

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total All Countries

-547.6

-665.4

-782.7

-838.3

-794.5

-816.2

-503.6

-634.9

-727.4

-729.6

-688.7

-722.5

-762.6

-752.5

-796.1

Total FTA

-108.2

-132.4

-144.9

-146.7

-140.4

-126.6

-61.9

-79.0

-80.5

-70.5

-66.6

-61.8

-64.0

-72.6

-76.7

Israel, Canada,

Mexico

-92.3

-111.5

-128.2

-136.1

-142.8

-143.1

-69.4

-95

-98.9

-93

-85.4

-87.9

-76.2

-75.3

-88.6

17 FTA Partners

-15.9

-20.9

-16.7

-10.6

2.4

16.5

7.5

18.4

22.5

18.8

26.1

12.2

2.7

11.9

Israel

-5.9

-5.4

-7.1

-8.2

-7.8

-9.2

-9.7

-9.1

-7.9

-9.1

-8.0

-10.9

-9.0

-9.4

NAFTA

-92.3

-111.5

-128.2

-136.1

-142.8

-143.1

-69.4

-95.0

-98.9

-93.0

-85.4

-87.9

-76.2

-75.3

-88.6

Canada

-51.7

-66.5

-78.5

-71.8

-68.2

-78.3

-21.6

-28.5

-34.5

-31.4

-30.9

-34.0

-15.5

-11.0

-17.6

Mexico

-40.6

-45.1

-49.7

-64.3

-74.6

-64.7

-47.8

-66.4

-64.5

-61.6

-54.4

-53.8

-60.7

-64.4

-71.1

Jordan

-0.2

-0.5

-0.6

-0.8

-0.5

-0.2

0.3

0.2

0.4

0.6

0.9

0.7

-0.1

0.3

Australia

6.7

8.5

9.6

10.6

11.6

13.2

17.3

21.6

16.9

16.0

14.1

12.6

14.6

Chile

-1.0

-1.1

-1.4

-2.8

-0.7

3.7

3.4

3.9

6.9

9.4

7.1

6.7

4.1

3.1

Singapore

1.4

4.2

5.5

6.9

7.9

12.0

6.5

11.6

12.1

10.3

12.8

14.1

10.2

8.9

10.4

CAFTA-DR

-1.8

-1.9

-1.2

1.0

3.7

6.0

1.1

0.6

1.5

-1.0

-0.5

2.9

5.0

5.4

7.1

Costa Rica

0.0

0.2

0.3

0.6

1.7

-0.9

-3.5

-4.1

-4.8

-4.7

-2.5

1.6

1.5

1.7

Dom. Rep.

-0.2

0.1

0.8

1.9

2.6

1.9

2.9

3.1

2.6

2.9

3.4

2.4

3.1

3.0

El Salvador

-0.2

-0.1

0.3

0.2

0.9

0.5

0.8

1.0

0.7

0.4

0.6

Guatemala

-0.7

-0.6

-0.3

0.4

1.0

1.3

0.7

1.3

1.4

1.3

1.4

1.8

1.7

1.9

3.0

Honduras

-0.5

-0.6

-0.5

0.0

0.5

0.8

0.0

0.7

1.6

1.1

0.8

1.3

0.5

0.2

0.5

Nicaragua

-0.3

-0.4

-0.6

-0.8

-0.7

-0.6

-0.9

-1.0

-1.5

-1.6

-1.7

-2.1

-1.9

-1.8

-1.7

0.1

0.0

0.1

0.4

0.7

0.6

1.2

1.3

1.8

1.2

1.5

1.1

0.6

0.9

Bahrain

0.1

-0.1

-0.2

0.0

0.3

0.2

0.8

0.7

0.5

0.4

0.1

0.4

0.1

-0.1

Oman

-0.4

-0.1

0.0

-0.1

0.0

0.5

0.2

0.3

-0.8

0.4

0.5

1.0

1.4

0.7

1.0

Peru

-0.7

-1.6

-2.8

-3.0

-1.2

0.4

0.7

1.7

2.9

2.0

4.0

3.7

1.7

1.4

Colombia

-2.6

-2.8

-3.4

-2.6

-0.9

-1.7

-1.9

-3.6

-8.8

-8.3

-3.2

2.1

2.2

-0.7

-0.3

Panama

1.5

1.8

2.3

3.4

4.5

4.0

5.7

7.9

9.3

10.1

10.0

7.3

5.7

6.0

Morocco

Korea, South

-13.2

-19.8

-16.0

-13.4

-12.9

-13.4

-10.6

-10.0

-13.2

-16.6

-20.7

-25.1

-28.3

-27.6

-22.9

Total FTA (% share)

19.8%

21.5%

18.5%

17.5%

17.7%

15.5%

12.3%

12.4%

11.1%

9.7%

9.6%

8.9%

8.4%

9.7%

9.6%

Source: U.S. Census Bureau.

Notes: Countries are listed by the order in which the FTA was implemented.

CRS-7

U.S. Trade with Free Trade Agreement (FTA) Partners

Table 4. Estimated U.S.Trade Balance of Crude Oil and Products With FTA Partners

(in billions of dollars)

2012

2013

2014

2015

2016

2017

Total All Countries

$-272.97

$-220.71

$-168.66

$-81.26

$-63.16

$-62.61

Total FTA

-102.83

-93.31

-77.19

-41.00

-28.61

-34.09

Australia

0.15

0.28

0.43

-0.02

0.13

0.42

Bahrain

-0.04

0.00

-0.17

-0.03

Canada

-93.42

-91.76

-85.85

-48.47

-37.48

-53.40

Chile

5.39

4.95

4.80

2.54

2.02

2.58

Colombia

-13.22

-9.66

-5.93

-3.85

-4.40

-4.18

Costa Rica

1.77

1.66

1.60

0.91

0.74

1.02

Dominican Republic

1.51

1.49

1.60

1.12

1.00

1.22

El Salvador

0.26

0.42

0.63

0.38

0.42

0.54

Guatemala

1.29

1.06

1.30

0.97

1.05

1.85

Honduras

1.66

1.59

1.86

1.00

0.66

0.92

Israel

0.48

0.53

0.50

0.22

0.16

0.20

Jordan

0.26

0.32

0.00

0.03

0.02

Korea, South

-1.55

-1.91

-0.47

-0.64

0.00

1.22

Mexico

-17.35

-13.69

-9.42

-1.17

2.78

6.37

Morocco

0.89

1.17

1.33

0.62

0.47

0.77

Nicaragua

0.00

0.04

0.03

0.05

0.12

0.23

Oman

-0.30

-0.11

0.00

0.05

-0.37

-0.15

Panama

4.65

5.10

5.89

2.66

1.46

2.00

Peru

0.52

0.88

0.90

0.88

0.94

1.11

Singapore

4.21

4.32

3.76

1.78

1.69

3.19

Source: Estimated by CRS from data published by the United States Energy Information Administration.

The United States International Trade Commission (ITC) is tasked by Congress to provide the

official U.S. government assessment of the economic effects of U.S. trade agreements. In June

2016, the ITC published a congressionally mandated4 report on the estimated economic effects of

U.S. FTAs.5 The ITC’s analysis considered industry-specific agreements and bilateral, regional,

and multilateral agreements.6

The commission’s economic analysis, as indicated in Table 5, indicates that in 2012 U.S. bilateral

and regional trade agreements increased U.S. aggregate trade by about 3% and U.S. real GDP and

4 The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C 4204 (f) (2)). Section 105

(f)(2) of the Act requires the ITC to submit two reports to the House Committee on Ways and Means and the Senate

Committee on Finance, one in 2016 and a second not later than mid-2020, on the economic impact of trade agreements

implemented under trade authorities procedures since 1984.

5 Economic Impact of Trade Agreements Implemented Under Trade Authorities Procedures, 2016 Report, Publication

number 4614, United States International Trade Commission, June 2016.

6 Ibid., p. 17.

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U.S. employment by less than 1%, $32.2 billion and 159,300 fulltime equivalent employees,

respectively, and increased bilateral trade with partner countries by 26.3%. The ITC’s analysis

also indicated that agreements that focus on specific industries have had larger impacts on trade

in their targeted industries than do bilateral agreements that cover many sectors. The ITC also

estimated that FTAs provided



gains to consumers through lower prices to the extent that the lower-priced items

were present in consumers’ budgets;

greater product variety;

increased receipts for intellectual property; and

a positive effect, on average, on U.S. bilateral merchandise trade balances with

partner countries.

Table 5. International Trade Commission Estimates of the Economic Effects of

U.S.Trade Agreements

Type of economic impact

Findings

Effects on bilateral trade

The bilateral and regional trade agreements increased bilateral

trade with partner countries by 26.3% in 2012.

Effects on total exports and imports

The bilateral and regional trade agreements increased total U.S.

exports by 3.6% in 2012. They increased total U.S. imports by

2.3%.

Effects on real GDP

The bilateral and regional trade agreements increased real GDP

by $32.2 billion (0.2%) in 2012.

Effects on U.S. labor markets

The bilateral and regional trade agreements increased total

employment by 159,300 fulltime equivalent employees (0.1%)

and increased real wages by 0.3% in 2012.

Effects on U.S. receipts for intellectual property

Increases in patent protection since the Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS) entered

into force increased U.S. international receipts for the use of

intellectual property by $10.3 billion (12.6%) in 2010.

Effects on international investment

The bilateral and regional trade agreements had a mixed effect

on foreign direct investment, in some cases increasing and in

other cases decreasing inbound and outbound investment flows.

Effects on bilateral trade balances

The bilateral and regional trade agreements had a positive

effect, on average, on U.S. bilateral merchandise trade balances

with the partner countries, increasing trade surpluses or

reducing trade deficits by a total of $87.5 billion (59.2%) in

2015.

Effects on U.S. consumers

The bilateral and regional trade agreements resulted in tariff

savings of up to $13.4 billion in 2014, with a significant part of

these savings benefiting U.S. consumers, and also increased the

variety of products imported by the United States.

Effects of the Information Technology

Agreement (ITA) on U.S. information

technology exports

The ITA increased annual U.S. exports of covered information

technology products by $34.4 billion (56.7%) in 2010.

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Type of economic impact

Findings

Effects of the Uruguay Round and NAFTA tariff

reductions on U.S. steel imports

These agreements are estimated to have increased annual U.S.

steel imports by $1.2 billion (14.7%) in 2000.

Effects on U.S. employment in the textile and

apparel industries

Rising imports, due in part to the Agreement on Textiles and

Clothing (ATC), accounted for most of the reduction in U.S.

employment in the apparel industry between 1998 and 2014.

Source: Economic Impact of Trade Agreements Implemented Under Trade Authorities Procedures, 2016 Report,

Publication number 4614, United States International Trade Commission, June 2016, p. 21.

Bilateral Trade Balances

In most cases, economists question the usefulness of using bilateral trade balances as indicators of

trade relations, of the effectiveness of a trade agreement, or of the costs and benefits of a trade

agreement. In general terms, viewing trade balances in isolation or as a measure of a trade

agreement represents an approach that is fundamentally different from general economic

arguments concerning the costs and benefits of trade and trade agreements. Economists generally

argue that from the perspective of a large open economy with liberalized capital flows and

floating exchange rates, such as the United States, broad macroeconomic forces, particularly

domestic saving and investment levels, determine the overall trade deficit or surplus. They argue

that, with floating exchange rates (most developed economies have floating exchange rates, while

many smaller developing economies do not have fully floating currencies) and highly liberalized

flows of capital across national borders, domestic macroeconomic forces determine the demand

for and supply of capital that, in turn, drive cross-border capital flows, which are a major factor in

determining the international exchange value of the dollar and, therefore, the overall U.S. trade

balance. Factors external to the U.S. economy often are particularly important in determining the

value of the dollar, which serves as the international reserve currency.

While many of the economic arguments can be arcane at times, economists generally contend that

from this overall economic perspective both consumers and producers benefit as a result of

liberalized trade and that the gains for the economy as a whole outweigh the costs, irrespective of

the bilateral trade deficit or surplus. Most economists argue that the economy as a whole operates

more efficiently as a result of competition through international trade and that consumers

throughout the economy experience a wider variety of goods and services at varying levels of

quality and price than would be possible in an economy closed to international trade. They also

contend that trade may have a long-term positive dynamic effect on an economy that enhances

both production and employment. In addition, U.S. trade agreements comprise a broad range of

issues that may affect trade and commercial relations over the long run between the negotiating

parties, particularly for developing and emerging economies.

At the same time, bilateral trade balances are influenced by a seemingly innumerable list of

economic activities at the micro level, or at the level of the individual firm or consumer, that are

as diverse as the trading partners themselves. These activities can include, but are not limited to,

the overall level of economic development; the abundance of raw materials; relative rates of

economic growth; rates of technological change; changes in productivity; differences in rates of

inflation; changes in commodity prices (especially the price of oil); and changes in exchange

rates.

Most economists also recognize that a broad range of activities can affect national economies and

trade balances overall to a greater degree than even the most robust bilateral or international trade

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agreement. Generally, it is very difficult to unravel the complicated linkages that exist within the

economy in order to derive cause and effect relationships, that is, attempting to link a specific

trade agreement with movements in bilateral trade balances. For instance, movements in

international exchange rates, such as the decline in the value of the peso in late 1994, followed by

a financial crisis in Mexico and severe economic recession,7 had a major impact on U.S.-Mexico

trade that arguably was greater than anything that could have been anticipated by the completion

of NAFTA. More recently, the appreciation of the dollar relative to most other currencies is

expected to reduce U.S. exports overall, if the appreciation is sustained, but it would also reduce

the costs of U.S. imports, which would tend to lower the overall U.S. merchandise trade deficit—

at least in the short run. In addition, large changes in the price of crude oil, similar to that which

occurred in 2009, are expected to lower the overall U.S. trade deficit, given the significant role

that crude oil plays in U.S. imports. Also, global trade has been affected by such macroeconomic

events as the 2008-2009 financial crisis and associated economic recession in the United States

and elsewhere, which caused global trade to decline by 30% in 2009 from the previous year. (For

additional information, see Appendix A.)

On a bilateral basis, trade balances are shaped by a host of factors, as indicated above. Indeed,

U.S. FTA partners display a great deal of variation in their economies, ranging from Canada,

which is a highly developed open economy that is within close proximity to the United States, to

small, Central American developing economies that are different in structure from the U.S.

economy and are at some physical distance from the United States. In addition, many U.S. FTA

partners represent economies that are substantially smaller than the U.S. economy and often are

limited in what they produce. As a result, U.S. trade with these countries often is concentrated in

a small number of items and often is comprised of trade in raw materials and intermediate

processed goods, as indicated in Appendix B. In most of the countries that have an FTA with the

United States, the top 10 export and import commodities account for significant shares of total

bilateral trade: more than 90% in some cases. In some cases, bilateral trade is reliant on trade in

raw materials and agricultural commodities; in other cases, bilateral trade is based on trade in

energy items, particularly U.S. trade with Canada and Mexico. Such differences in the underlying

structure of trade with particular trading partners, however, complicate efforts to compare the

performance of one trade agreement with another and to derive cause and effect relationships

between the implementation of an FTA and bilateral trade balances.

Another factor that can affect bilateral trade relations and trade balances is the composition of

trade relationships, which are distinct from one country to another. While trade agreements

determine the rules by which nations conduct trade and provide incentives to consumers in the

form of lower tariff rates and firms in the form of lower trade barriers, behavioral characteristics

of consumers and firms determine how those incentives affect bilateral trade. Economists often

attempt to estimate the impact of a trade agreement on bilateral trade based on estimates of the

strength of the responsiveness by consumers and firms to the incentives provided by the

agreement. The responsiveness of consumers and firms to the incentives associated with trade

agreements seems to vary by different types of goods, or by major end-use categories. Consumer

purchases of luxury goods, for instance, are highly responsive to changes in prices and

consumers’ incomes, while consumer consumption of agricultural products is less responsive.

The U.S. Census Bureau provides summary information concerning U.S. trade by grouping U.S.

merchandise trade into six major end-use categories, including (1) foods, feeds, and beverages;

(2) industrial supplies, including petroleum; (3) capital goods, or machinery and equipment that

are used in manufacturing of other items; (4) automotive vehicles and parts; (5) consumer goods;

7 Whitt, Joseph A. Jr., “The Mexican Peso Crisis,” Economic Review, Federal Reserve Bank of Atlanta,

January/February 1996.

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and (6) other goods. As indicated in Figure 5, trade in food and agricultural commodities,

industrial supplies (including petroleum products), capital goods and other goods are greater as a

share of U.S. exports than of U.S. imports, but U.S. imports of automotive vehicles and parts and

consumer goods are a greater share of U.S. imports compared with U.S. exports.

Figure 5. U.S. Merchandise Exports and Imports by Principal End-Use Category,

2017

Source: U.S. Census Bureau. Figure created by CRS.

The structural composition of U.S. trade, or the role of the six categories listed above as shares of

U.S. trade, plays a role in shaping bilateral trade relationships. This structural composition of U.S.

trade also has important implications for the persistence of the annual U.S. merchandise trade

deficit, despite significant changes in the global growth in merchandise trade, major multinational

trade liberalization, and the various FTAs the United States has implemented. This subject is of

continuing interest to academic economists, who have focused on the way U.S. trade flows

respond to changes in national incomes and in prices, specified by economists as the price and

income elasticity of trade.8

8 Foreign demand for U.S. goods and services is determined by foreign income, the prices of U.S. goods and services,

and the prices of goods and services that compete with U.S. goods and services in the foreign market. Similarly, U.S.

demand for foreign goods and services is determined by U.S. income, the prices of foreign goods and services, and the

prices of goods and services that compete with foreign goods and services in the U.S. market. The income elasticity of

demand for imports measures to what extent changes in an importing country’s income affect change in its imports.

Similarly, the income elasticity of demand for exports measures to what extent changes in foreign countries’ income

affect the exporting country’s exports. Crane, Leland, Meredith A. Crowley, and Saad Quayyum, “Understanding the

Evolution of Trade Deficits: Trade Elasticities of Industrialized Countries,” Economic Perspectives, 4Q2007, Federal

Reserve Bank of Chicago, 2007, p. 4. Academic research on trade elasticities is based on the article: Houthakker, H.S.,

and Stephen P. Magee, “Income and Price Elasticities in World Trade,” The Review of Economics and Statistics, May

1969, pp. 111-125. Examples of recent research include: Mann, Catherine, and Katharina Pluck, “Understanding the

U.S. Trade Deficit,” in G7 Current Account Imbalances: Sustainability and Adjustment, ed. by Richard H. Clarida,

University of Chicago Press, May 2007; Gangnes, Byron S., Alyson C. Ma, and Ari Van Assche, Global Value Chains

and Trade Elasticities, Working Paper 2014-2,The Economic Research Organization at the University of Hawaii,

February 2014; Imbs, Jean and Isabelle Majean, “Trade Elasticities: A Final Report for the European Commission,”

Economic Papers no. 432, European Union, 2010.

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Trade elasticities measure how much a country’s imports or exports will change in response to

changes in national incomes or the relative price of imported goods and services to domestically

produced ones.9 While economists have developed varied estimates of the elasticities, depending

on the particular study, one result common among the various studies covering different time

periods and using different econometric methods is that U.S. demand for foreign imports is

estimated to be more sensitive to changes in income and prices than is foreign demand for U.S.

exports.

The estimated price and income elasticities in Table 6 indicate that for every 1% increase in U.S.

GDP, U.S. consumers increase their purchases of imports by 2.11%. Similarly, for every 1%

increase in GDP among U.S. trading partners, the consumers in those countries would increase

their consumption of U.S. goods by 1.86%. While this difference seemingly is not large, the

difference in size between the U.S. economy and the economies of other countries, especially

those of developing economies, can magnify the differences in responsiveness to the growth in

national GDP. The disparity in responsiveness likely stems from the relatively larger share that

consumer consumption plays in the U.S. economy. This also implies that with constant prices and

similar rates of economic growth in both the United States and among its trading partners, the

U.S. merchandise trade deficit would be expected to worsen over time, in part due to the way the

various components of U.S. trade are affected differently by changes in incomes and prices. One

notable difference is in the U.S. and foreign demand for services. Since U.S. demand for imported

services is less sensitive to changes in income compared with foreign demand for U.S. services

exports, the U.S. surplus in services would be expected to increase over time, assuming constant

prices and similar rates of economic growth between the United States and its trading partners.

Table 6. U.S. Long-run Export and Import Elasticities

(percentage change)

Exports

Imports

Income

Prices

Income

Prices

Total

1.86%

-5.07%

2.11%

-0.62%

Goods

1.91

-8.56

2.18

-0.69

1.65

-0.07

1.82

-0.41

Industrial durables

1.78

0.30

2.11

-0.04

Industrial nondurables

1.57

-0.18

1.56

-0.79

1.10

0.07

1.23

-0.03

Industrial goods

Agriculture

Petroleum

Capital goods

-5.94

-63.07

-1.20

-2.39

Autos

2.53

-0.82

2.03

0.11

Consumer goods

2.76

-0.49

1.76

-1.78

Durable consumer goods

2.91

-0.59

2.56

-0.87

Nondurable consumer

goods

2.59

-0.41

3.68

1.34

Services

1.87

-0.61

1.64

0.06

Nonpetroleum goods

1.96

-10.14

1.82

-1.07

9 Crane, et al., “Understanding the Evolution of Trade Deficits,” p. 4.

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Source: Crane, Leland, Meredith A. Crowley, and Saad Quayyum, Understanding the Evolution of Trade

Deficits: Trade Elasticities of Industrialized Countries, Economic Perspectives, 4Q/2007, Federal Reserve Bank of

Chicago, 2007, pp. 13-14.

Notes: Values represent percentage changes in demand relative to a 1% change in national income (gross

national income) or prices, based on data from 1988-2006. Income elasticities are expected to be positive, since

changes in the demand for goods and services are positively related to changes in income; price elasticities are

expected to be negative, since changes in the demand for goods and services are inversely related to changes in

prices. A higher value represents a stronger change in demand to a change in income or relative prices; a lower

value represents a weaker change in demand to a change in income or relative prices.

Global Value Chains

In addition, the proliferation of global value chains, or complex cross-border production networks

in which goods and services can cross national borders multiple times through various stages of

production, is blurring the distinction between the domestic content value of exports and imports

and raising questions about how accurately bilateral trade balances reflect actual trade

relationships. Additionally, most economists argue that both exports and imports benefit the

economy, because nations export in order to import those goods and services they either do not

produce, or cannot produce as efficiently as another country. As a result, trade allows the

economy to specialize in producing those goods and services in which it has an international

competitive advantage, thereby maximizing the total amount of goods and services that are

available to its citizens.

Current trade data treat exports and imports as though the full value of an export was produced

domestically and the full value of an import was produced abroad. However, the rapid growth of

global value chains and intra-industry trade (importing and exporting goods in the same industry)

has significantly increased the amount of trade in intermediate goods in ways that can blur the

distinction between domestic and foreign firms and goods. For instance, foreign value added

accounts for about 28% of the content on average of global exports, as indicated in Figure 6, but

this share can vary considerably by country and industry. Foreign value added in the exports of

developed countries accounts for about 31% of the content of exports and about 11% of U.S.

exports. This value for developed countries likely is inflated due to the highly integrated

economies within the EU, which accounts for 70% of the exports from EU countries. In

developing countries, the highest foreign value added shares in exports occurs in countries in East

and South-East Asia and in Central America, where processing industries account for large shares

of exports.10

As a result of the growth in value chains, traditional methods of measuring trade may obscure the

actual sources of goods and services and the allocation of resources that are used in producing

those goods and services. Trade in intermediate goods also means that imports may be essential

for exports. As a result, countries that impose trade measures that restrict imports may negatively

affect their own exports.11 This complex process of cross-border production and trade in

intermediate goods also uses a broad range of services that has greatly expanded and redefined

the role that services play in international trade and increased the number of jobs in the economy

that are tied directly and indirectly to international trade in ways that are not captured fully by

traditional trade data.

10 World Investment Report 2013, United Nations Conference on Trade and Development, 2013, pp. 123-127.

11 Ibid, p. 172.

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Figure 6. Share of Foreign Value Added in Exports, by Country or Region, 2010

Source: UNCTAD-Eora GVC Database. Figure created by CRS.

Issues for Congress

In discussing proposed FTAs, both advocates and opponents of such agreements often focus on

the U.S. merchandise trade balance with existing FTA partners as one way of measuring the

success of such agreements. Economists generally argue, however, that due to the nature of recent

FTAs, bilateral trade balances serve as incomplete measures of the comprehensive nature of the

trade and economic relationships that often exist between the United States and its FTA partners.

For instance, recent trade agreements include trade in services, provisions for investment, and

trade facilitation, among other areas that are not reflected in bilateral merchandise trade balances.

Instead of focusing exclusively on merchandise trade balances as a key measure of a bilateral

trade relationship, most economists argue that liberalized trade creates a broad set of costs and

benefits for the economy. They argue that, over the long run, the benefits will outweigh the costs,

or that the net effect on the economy is positive, regardless of the overall U.S. trade balance or a

bilateral trade balance. According to this approach, the economy as a whole tends to operate more

efficiently as a result of competition through international trade, and consumers throughout the

economy experience a wider variety of goods and services at varying levels of quality and price

than would be possible in an economy closed to international trade.

Economists generally also contend that international trade may have a long-term positive

dynamic effect on an economy that enhances both production and employment. In addition, trade

agreements of the type currently being negotiated by the United States comprise a broad range of

issues that could have significant economic effects on trade and commercial relations over the

long run between the negotiating parties, particularly for developing and emerging economies.

Economists and others also acknowledge that the negative effects of international trade and trade

agreements, particularly potential job losses and lower wages, often are distributed

disproportionately with the effects falling more heavily on some workers and on some firms. As a

consequence, governments often have implemented programs to provide benefits to those

negatively affected by trade agreements to ease their transition to other economic activities.

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Most economists also argue that bilateral merchandise trade balances do not serve well as a basis

for comparing the relative merits of particular FTAs, because each bilateral trade relationship is

unique to the particular trading partners and is subject to a great number of factors. These unique

bilateral trade relationships reflect underlying fundamentals that shape the composition of the

particular trade relationship. As a consequence of the underlying composition of bilateral trade

relationships, bilateral trade and trade balances respond differently to trade liberalization, which

makes it difficult to compare the U.S. experience with individual FTA partners.

Furthermore, the growth of global value chains and inter-industry trade are blurring the

distinction between exports and imports and fundamentally changing the meaning of bilateral

trade balances. Cross-border trade in intermediate goods not only has increased as a share of total

trade in the economy, but it has expanded the role of services in international trade in ways that

are not fully credited in bilateral trade data. As a consequence of the growth in global value

chains, exports and imports are growing less distinct: policies that affect a nation’s imports

ultimately affect its exports and vice versa. Trade in intermediate goods also means that imports

are essential inputs into the production of exports. As a result, countries that impose trade

measures that restrict imports invariably negatively affect their own exports. This loss of

distinction between exports and imports as strictly domestic or foreign activities further

complicates efforts to distinguish between exports and imports on a bilateral basis.

Congress has considered, and may again consider, two mega-regional free trade agreements that

its participants argue are comprehensive and high-standard: the concluded Trans-Pacific

Partnership (TPP) among the United States and 11 other countries, and the U.S.-European

Transatlantic Trade and Investment Partnership (T-TIP). Since the two agreements could have

potentially economy-wide effects, Congress may choose to examine the current methods that are

used to collect data on U.S. exports and imports and the potential costs and benefits of improving

the data to have them more fully reflect the resource costs they may imply for the economy.

Congress may also choose to examine the state of data collection and analysis on workers and

industries and the states where they are located in order to determine those that may be the most

vulnerable to economic dislocations as one way of anticipating the costs and benefits of the

proposed agreements to the economy as a whole. Congress may also choose to examine the role

that global value chains are playing in the economy and the impact they are having on the

nation’s ability to assess the impact of exports and imports on the allocation of resources in the

economy.

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Appendix A. U.S.-NAFTA Trade

NAFTA is often cited as an example of a trade agreement that performed differently than some

had anticipated, because the United States continued to experience a merchandise trade deficit

with the two NAFTA partners. For some, however, the agreement is seen as an example of the

impact that broad economic events can have on trading partners in ways that that are not

anticipated at the time an FTA is negotiated, but can outweigh the impact of the agreement. In

particular, China’s accession to the WTO in 2001 affected U.S. trade relations and those of its

NAFTA partners in a number of ways. China’s accession to the WTO reduced China’s barriers to

trade and investment, which tended to increase trade between the United States and China and

boosted U.S. investment in China. As a result of the increased amount of U.S. trade with China,

U.S. trade with other countries, including Canada and Mexico, were affected. In particular, U.S.

imports from China of computer equipment, apparel, and semiconductors reduced imports of such

items from other countries.

These various events played out differently with U.S. trade partners, as indicated in Figures A-1

and A-2, which show the average share of U.S. imports and exports with Canada, Mexico, and

China in five-year periods from 1989 to 2017.12 In 1989, total U.S. imports were $473 billion,

with Canada, Mexico, and China accounting for $88 billion, $27 billion, and $12 billion,

respectively. In terms of shares, these three countries accounted for 18.6%, 5.7%, and 2.5%,

respectively, of total U.S. imports.

By 2000, total U.S. imports had grown to $1.2 trillion, with imports from Canada ($231 billion),

Mexico ($136 billion), and China ($100 billion) accounting for shares of 19%, 11.5%, and 8.2%,

respectively. During the period 1990-2000, Canada’s share of total U.S. imports rose slightly,

while shares of imports from Mexico doubled and shares of imports from China nearly

quadrupled. Between 2000 and 2017, however, Canada’s share of total U.S. imports fell to

account for 12.8%, while Mexico’s share rose slightly to 13.4%, and China’s share more than

doubled to account for 21.4% of total U.S. imports. The data reflect the average share of U.S.

imports over five-year periods, except for the data for 1990, which reflect the share in 1990, and

the share in 2017, which reflects the average share over the two-year 2016-2017 period.

The data indicate that Canada’s share of U.S. imports grew little under the NAFTA agreement

(implemented in 1994) until 2000, after which that share has fallen, while imports from Mexico

experienced their greatest average rate of growth as a share of U.S. imports between 1995 and

2000. On the other hand, imports from China grew steadily as a share of U.S. total imports over

the entire period, but they grew at a faster rate after China was admitted into the WTO in 2001. A

similar trend holds for shares of U.S. exports, with the share of U.S. exports with Canada

declining after 2000, while the share of U.S. exports with China experiencing a steady increase in

total U.S. exports. The share of U.S. exports going to Mexico dipped during the period just before

and during the 2008-2009 recession, but rebounded as a modest pace after 2010. As previously

indicated, bilateral trade balances are influenced by a broad range of factors. As a result, it is very

difficult to unravel the complicated linkages that exist within the economy in order to derive

cause and effect relationships between a trade agreement and the impact that agreement might

have on bilateral trade balances.

12 The data are organized into five-year periods to illustrate trends and shifts in those trends.

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Figure A-1. U.S. Trade With Canada, China, and Mexico (Select years1990-2017)

Source: U.S. Census Bureau. Figure created by CRS.

Notes: Values represent five-year averages, except for 1990 and 2017.

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Appendix B. U.S. Trade with FTA Partner Countries,

Top 10 Export and Import Commodities, 2014

This Appendix presents 2014 data on the top 10 U.S. export and import commodities by value

and share of total bilateral exports and imports, respectively, for the 20 countries with which the

United States currently has an FTA.

Table B-1. U.S.Trade with Australia: Top 10 Products, 2014

(in millions of dollars and percentage shares)

U.S. Total Exports

Product

U.S. Total Imports

Value

$26,668

100.0%

Total

$10,670

100.0%

Aerospace products and parts

2,364

8.9%

Meat products and meat

packaging products

2,750

25.8%

Motor vehicles

2,294

8.6%

Nonferrous metal and

processing

1,033

9.7%

Agriculture and construction

machinery

1,986

7.4%

Goods returned

681

6.4%

Special classification provisions

1,385

5.2%

Aerospace products and

parts

510

4.8%

Navigational, measuring,

electromedical, and control

instruments

1,171

4.4%

Metal ores

483

4.5%

Other general purpose

machinery

1,108

4.2%

Beverages

460

4.3%

Medical equipment and supplies

1,101

4.1%

Medical equipment and

supplies

432

4.0%

Motor vehicle parts

887

3.3%

Miscellaneous manufactured

commodities

411

3.9%

Pharmaceuticals and medicines

869

3.3%

Pharmaceuticals and

medicines

335

3.1%

Engines, turbines, and power

transmission equipment

853

3.2%

Navigational, measuring,

electromedical, and control

instruments

303

2.8%

$14,018

52.6%

Subtotal

$7,399

69.3%

Total

Subtotal

Product

Source: United States International Trade Commission.

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Table B-2. U.S.Trade with Bahrain:Top 10 Products, 2014

(in millions of dollars and percentage shares)

U.S. Total Exports

Product

U.S. Total Imports

Value

$1,060

100.0%

Total

$965

100.0%

Motor vehicles

263

24.8%

Alumina and aluminum and

processing

254

26.3%

Special classification provisions

221

20.8%

Petroleum and coal products

164

17.0%

Aerospace products and parts

120

11.3%

Pesticides, fertilizers and

other agricultural chemicals

150

15.5%

Other general purpose

machinery

4.4%

Apparel

133

13.8%

Navigational, measuring,

electromedical, and control

instruments

3.2%

Textile furnishings

7.1%

Agriculture and construction

machinery

2.8%

Goods returned

6.9%

Dairy products

2.5%

Basic chemicals

4.5%

Miscellaneous manufactured

commodities

2.3%

Plastics products

3.2%

Resin, synthetic rubber &

artificial & synthetic fibers &

filament

2.1%

Miscellaneous manufactured

commodities

2.5%

Other fabricated metal

products

1.6%

Other general purpose

machinery

0.8%

$804

75.8%

Subtotal

$944

97.8%

Total

Subtotal

Product

Source: United States International Trade Commission.

Table B-3. U.S.Trade with Canada: Top 10 Products, 2014

(in millions of dollars and percentage shares)

U.S. Total Exports

Product

U.S. Total Imports

Value

$312,032

100.0%

Total

$346,063

100.0%

Motor vehicles

26,932

8.6%

Oil and gas

96,128

27.8%

Motor vehicle parts

25,958

8.3%

Motor vehicles

44,249

12.8%

Oil and gas

16,796

5.4%

Petroleum and coal products

15,756

4.6%

Petroleum and coal products

15,086

4.8%

Motor vehicle parts

14,630

4.2%

Agriculture and construction

machinery

11,179

3.6%

Goods returned

12,006

3.5%

Total

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Product

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U.S. Total Exports

Product

U.S. Total Imports

Value

Special classifications

10,562

3.4%

Other general purpose

machinery

9,821

Computer equipment

Value

Nonferrous metal and

processing

10,496

3.0%

3.1%

Aerospace products and

parts

10,351

3.0%

8,723

2.8%

Basic chemicals

8,247

2.4%

Basic chemicals

8,114

2.6%

Pulp, paper, and paperboard

mill products

7,316

2.1%

Iron and steel and ferroalloy

7,853

2.5%

Resin, synthetic rubber, &

artificial & synthetic fibers &

filament

6,171

1.8%

$141,023

45.2%

Subtotal

$225,350

65.1%

Subtotal

Product

Source: United States International Trade Commission.

Table B-4. U.S.Trade with Chile: Top 10 Products, 2014

(in millions of dollars and percentage shares)

U.S. Total Exports

Product

U.S. Total Imports

Value

$16,631

100.0%

Total

$9,491

100.0%

Petroleum and coal products

5,107

30.7%

Nonferrous metal and

processing

2,393

25.2%

Aerospace products and parts

1,635

9.8%

Fruits and tree nuts

1,527

16.1%

Agriculture and construction

machinery

925

5.6%

Farmed fish and related

products

1,000

10.5%

Basic chemicals

694

4.2%

Fish, fresh, chilled or frozen

and other marine products

638

6.7%

Special classification provisions

648

3.9%

Rubber products

395

4.2%

Computer equipment

606

3.6%

Fruit and vegetable preserves

and specialty goods

391

4.1%

Motor vehicles

527

3.2%

Basic chemicals

339

3.6%

Oil and gas

439

2.6%

Veneer, plywood, and

engineered wood products

317

3.3%

Other general purpose

machinery

430

2.6%

Beverages

301

3.2%

Resin, synthetic rubber, &

artificial & synthetic fibers &

filament

420

2.5%

Other wood products

300

3.2%

$11,432

68.7%

Subtotal

$7,601

80.1%

Total

Subtotal

Product

Source: United States International Trade Commission.

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Table B-5. U.S.Trade with Colombia: Top 10 Products, 2014

(in millions of dollars and percentage shares)

U.S. Total Exports

Product

U.S. Total Imports

Value

$20,317

100.0%

Total

$18,234

100.0%

Petroleum and coal products

6,342

31.2%

Oil and gas

10,312

56.6%

Basic chemicals

1,289

6.3%

Nonferrous metal and

processing

1,790

9.8%

Oilseeds and grains

1,270

6.3%

Fruits and tree nuts

1,298

7.1%

Communications equipment

882

4.3%

Petroleum and coal products

1,014

5.6%

Computer equipment

849

4.2%

Mushrooms, nursery and