U.S. international transactions in 2007

Survey of Current Business, April, 2008 by Christopher L. Bach

The deficit with Canada decreased $8.2 billion. Exports of all major categories, led by industrial supplies and materials, continued to rise. Imports also increased, mainly as a result of an increase in petroleum and products; partly offsetting was a decrease in automotive products.

The deficit with Japan decreased $5.9 billion after increasing for 3 years. Imports decreased for the first time in 4 years as a result of a slowdown in industrial supplies and materials and decreases in capital goods and automotive products. Exports continued to increase, with industrial supplies and materials and foods, feeds, and beverages accounting for nearly the entire increase.

The deficit with South and Central America decreased $5.4 billion after increasing for 9 years. Imports slowed considerably from large increases in the previous 3 years, mainly as a result of a slowdown in industrial supplies and materials, led by petroleum and products; imports of automotive products, particularly from Mexico, also slowed. Exports of all major categories increased, led by industrial supplies and materials and capital goods.

The deficit with Asia, excluding Japan, increased $5.2 billion, considerably less than the sizable increases in the previous 5 years. The smaller increase in 2007 resulted from sizable slowdowns in imports of consumer goods, capital goods, and industrial supplies and materials, mainly from China and Taiwan. Exports continued to increase, with the increase led by capital goods and industrial supplies and materials.

The deficit with members of OPEC increased $19.5 billion. The increase reflected an $11.2 billion deficit with Angola, which was admitted to membership at the start of 2007. The increase also resulted from an increase in imports of petroleum and products from Nigeria, Saudi Arabia, and Venezuela. Exports also increased; capital goods to Saudi Arabia and Qatar accounted for over half of the increase.

Services

The surplus on services increased to $106.9 billion in 2007 from $79.7 billion in 2006 (table L, chart 8). The increase was the largest by a wide margin of any of the annual increases in the past 4 years. From a recent low in 2004, the surplus has nearly doubled, rising from $57.5 billion in 2004 to $106.9 billion in 2007.

A large share of the increase in services receipts in 2007 was attributable to continued strength in "other" private services, which increased by a somewhat larger amount in 2007 than in 2006. Increases in travel, as well as in royalties and license fees, were much larger in 2007 than in 2006. When these increases are combined with those of other services categories, total services receipts increased 13 percent in 2007, up from a 9 percent increase in 2006.

A large share of the increase in services payments in 2007 was also attributable to continued strength in "other" private services, which was up slightly more in, 2007 than in 2006. However, unlike the situation with receipts, the increase in travel was only slightly larger than in 2006, and most other major categories of services increased less than in 2006. Consequently, the increase in total services payments remained at 9 percent, unchanged from a 9 percent increase in 2006.