TIME: Almanac 1993/TIME Almanac 1993.iso/time/062590/0625205.000

Text File | 1992-08-28 | 3.7 KB | 84 lines

                                                                                BUSINESS, Page 48

Ring 'Em Up, Ship 'Em Out



U.S. companies, becalmed at home, register record sales abroad


    With the U.S. economy stagnant and domestic sales hurting,
boosting new markets overseas became a simple matter of
survival for many U.S. firms. So far, their efforts have paid
off handsomely. Exports have zoomed to record levels this year,
a trend that has helped narrow the chronic U.S. trade deficit
and provide the domestic economy with just enough vitality to
avert a recession. "Thank goodness for exports," says Allen
Sinai, chief economist with the Boston Co. Economic Advisers.


    Statistics released last week show the U.S. trade picture
brightening considerably. The current-account deficit, the
trade figure that is most closely watched because it measures
transactions in services as well as goods, shrank 14% during
the first three months of the year, to $22.9 billion, the
smallest quarterly gap in six years. In a separate report, the
merchandise trade deficit in April fell 17%, to $6.9 billion,
its second best showing in six years. At this pace, the gap for
the year as a whole could fall below $100 million for the first
time since 1983.

    The extraordinary rise in foreign demand for U.S. goods has
come partly as a result of the fast-growing economies in the
Far East and Europe. But the U.S. has received substantial help
from a declining currency, which has made American goods less
expensive overseas. Since 1985, the dollar has fallen 43%
against major world currencies. American firms have also shown
greater flexibility in negotiating trade deals. More U.S.
companies are willing to barter or accept payment in local
currency instead of dollars, notes consultant Matt Schaffer of
Sand Point, Idaho, author of The Countertrade War.

    The U.S. aerospace industry has been one of the top
beneficiaries of the export boom. Last week Boeing announced
a $4.8 billion deal to sell 23 new 747-400 jumbo jets to Korean
Air Lines, which had earlier bought nine of the planes. All
told, Boeing has 161 foreign orders for airliners, which range
in price from $35 million to $130 million apiece. Even small
U.S. firms have made impressive inroads abroad. Trilling
Medical Technologies, a Carlstadt, N.J., firm of 50 employees
that sells burn-protection products, has seen its international
sales increase 400% during the past year, to $500,000.

    Yet the impressive gains made by U.S. exporters have begun
to inspire some resistance overseas. In South Korea, which is
suffering from a flagging economy, the government has staged
what amounts to an official boycott of many imports. Japan in
recent years has substantially increased its imports of
American goods, ranging from Timberland shoes to Harry Winston
jewelry, but trade tension resurfaced last week. The Bush
Administration voiced fears that Tokyo, after making promises
this spring to help reduce the U.S. trade deficit with Japan,
is dragging its feet again. Said Commerce Secretary Robert
Mosbacher: "I hope they are just testing us to see if we have
lost any of our resolve."

    Now that more American products have gained foreign
acceptance, U.S. business leaders have boosted their confidence
as well as their competitive skills. "Over the past five
years," says Jerry Jasinowski, president of the National
Association of Manufacturers, "U.S. manufacturers have turned
themselves inside out trying to improve the quality of their
products, and they have succeeded in a great many cases."


By Bernard Baumohl. Reported by Gisela Bolte/Washington and
Edwin M. Reingold/Los Angeles.