Reflection and Application Report
CHAPTER 2
Global Economic Environment
World, Regional, & National Economies
Chapter 2
Chapter Goals
The main goals of this chapter are to:
Present an overview of world trade to re-emphasize the economic linkages among nations.
Describe how WTO and UNCTAD and other global organizations influence trade.
Explore the developments in regional trading blocs and other areas like Eastern Europe.
Discuss the national role in global trade and identify some key countries for business in the coming decade.
Present information on population, urbanization, income, natural physical endowments, and infrastructure and then provide and overview of how these characteristics impact business.
World Economic Environment
- World trade
- Balance of payments
- Commercial policies
- Global organizations affecting trade
- Regional economic groups
- National economic policies
Chapter 2
Trade Theories
- Macro economic theories
- Absolute Advantage [1776] - Absolute efficiency of production. Adam Smith, Wealth of Nations, New York: Modern Library, 1937.
- Comparative Advantage [1800] - Relative efficiency of production.
Ricardo, D. "Principles of Political Economy and Taxation," in The Works and Correspondence of David Ricardo, eds. P.Sraffa & M.H. Dobb, Cambridge: University Press).
- Heckscher-Ohlin (H-O) MODEL [1933] - Relative factor endowments.
Macro economic trade theories were developed to explain why NATIONS trade.
See also: Leontief Paradox [1968] Readings in International Economics. Statistics do not support earlier theories, but what Leontief did not consider is QUALITY of inputs (e.g., he compared/equated highly educated work force with poorly educated work force).
Chapter 2
Macro Economic Trade Theory -Assumptions
- Closed economy (2 countries, US and Korea).
- Equal amounts of resources (fixed stock of resources with a total value of $10,000).
- Production is limited to 2 goods (lumber and steel).
- Production functions are linear and constant.
- No government intervention.
- No transportation or other distribution costs.
Notes:
US stated to have Ascribed (natural) Advantage (land), while Korea stated to have an Acquired (developed) Advantage (high technology manufacturing capability).
Chapter 2
Absolute Advantage
Note that the points on the production possibilities curve (A, B, and C) are reversed in the two charts. This was done to allow the addition of production possibilities that would yield the ‘Worst’ at point A, ‘Moderately good/bad’ at point B and the ‘Best’ at point C.
In the case of absolute advantage, the two nations each have an advantage over the other in making something. A micro economic example would be a master electrician and a master plumber exchanging services; one being able to do something better and quicker (i.e., for less time and money) than the other. Or, to put it in to terms the students might appreciate – Absolute Advantage theory explains why a financial advisor might use the services of a CPA to prepare tax statements. Both are well-educated and trained to provide specialized services, but they require special knowledge best left to those trained in each area.
Chapter 2
Absolute Advantage
Production Possibilities (000s)
Steel Steel
US 10 C KOREA
5 B
2 A
1 B
C Lumber A Lumber
0 100 200 0 50 100 200
"Total World" Production
Point Quantity
A - 100,000 board feet of lumber and 2,000 tons of steel.
B - 150,000 board feet of lumber and 6,000 tons of steel. C - 200,000 board feet of lumber and 10,000 tons of steel.
Comparative Advantage
Note that the points on the production possibilities curve (A, B, and C) are reversed in the two charts. This was done to allow the addition of production possibilities at each point.
In the case of comparative advantage, the one nation can make everything ‘better’ than the other (i.e., cheaper). A micro economic example would be a apprentice electrician and a master builder. The master builder can do a better job of building a home. It might be cheaper, though if the master builder concentrates on the complicated tasks and leave the easier electrical tasks (e.g., wiring a new lamp) to lower the overall cost of building the home. Or, in the case of our CFA (Certified Financial Advisor) and our CPA (Certified Public Accountant) – the Comparative Advantage theory explains why a financial advisor, even though trained in accounting practices might still use the services of a CPA to prepare tax statements. While the CFA COULD prepare their own tax statements, they could earn more money/have more left over by providing services in which they are trained and pay an accountant to provide the services in which they are trained. Again, both are well-educated and trained to provide specialized services, but they require special knowledge best left to those trained in each area.
Chapter 2
Comparative Advantage
Production Possibilities (000s)
Steel Steel
10 A US KOREA
8 C
5 B
4 B
C Lumber A Lumber
0 50 100 0 16 32 100
"Total World" Production
Point Quantity
A - 32,000 board feet of lumber and 10,000 tons of steel.
B - 66,000 board feet of lumber and 9,000 tons of steel.
C - 100,000 board feet of lumber and 8,000 tons of steel.
Balance of Payments
- The Balance of Payments (BOP) is a summary of a country's economic transactions with the world, for a specified period of time.
- These transactions are arranged according to the nature of the transactions (reflected in 3 accounts in the U.S.) and whether the transactions result in an inflow (credit) or outflow (debit). This summary is arranged as a double-entry system; that is, credits = debits.
Balance of Payments
- BoP is an indicator of the international economic health of a nation.
- The use of the data:
- help gov. plan monetary, fiscal, foreign exchange, and commercial policies.
- help strategy global decisions.
- Use import data:
To determine the major sources of foreign-made products
To gain idea of competitors’ locations
- Export data:
where the product was sold?
identify consumers’ locations
BOP Accounts
- Current Account.
- Goods (Merchandise),
- Services
- Unilateral Transfers.
- Capital Account.
- Includes flows such as direct and portfolio investments, private placements and, bank and government loans.
- Reserve Account.
- Includes assets such as monetary gold, special drawing rights and foreign currencies.
- Errors And Omissions.
- ‘Plug’ figure used to balance payment and receipt figures.
One source of Balance of Payment information for the United States is the Bureau of Economic Analysis (BEA). The home page of this site is: http://www.bea.gov/; the page that contains actual current balance of payment information is: http://www.bea.gov/bea/uguide.htm#_1_22.
Chapter 2
US Balance-of-Payments Accounts 2000
$Millions
Current Account
Credits
Debits
Export of goods, services and income
$1,069,531
Merchandise
773,304
Services
296,227
Income receipts on investments
345,394
Imports of goods, services and income
$-1,797,061
Merchandise
-1,222,772
Services
-215,239
Income payments on investments
-359,050
Unilateral transfers
-53,241
Balance of current account
-435,377
Capital Account
US assets abroad (net)
-553,349
Foreign assets in the US
952,430
Balance on capital account
399,081
Statistical discrepancy
35,616
Balance-of-Payments
- Current Account Deficit occurs when imports are greater than exports.
- Current Account Surplus occurs when exports are greater than imports.
- Capital Account records transactions that involve the purchase or sale of assets.
Commercial Policy Tools
used to affect changes in trade
- Tariffs/Duties:
- Ad valorem - percentage of value tax.
- Specific - per unit tax.
- Combination - mixture of above.
- Non-tariff Barriers (NTBs):
- Subsidies (includes government sponsored research, data, etc.).
- Quotas (embargoes).
- Custom's valuations.
- Exchange rate controls.
- 'Voluntary' restraint agreements.
- 'Buy local' restrictions (state and local as well).
- Standards and specifications (food and drug).
- Currency restrictions.
- Countervailing duties.
Tariffs
Tariffs
Specific
Fixed charge
per unit
Ad Valorem
Charge is
a proportion of the
goods value
Oldest form of protection.
Good for the Government.
Good for producers.
Leads to inefficiency.
Bad for consumers.
Subsidies
Government
payment to a
domestic producer
Cash Grants
Tax Breaks
Low Interest
Loans
Government
Equity
Participation
Subsidies
Agriculture
1.Keeps inefficient
farmers in business.
2.Encourages production
of subsidized products.
3.Produce products grown
more cheaply elsewhere.
4.Reduces agriculture
trade.
Helps domestic
producers to
compete internationally.
Paid by taxing
individuals
Import Quotas and Voluntary Export Restraints
Hurts
consumers
Raises domestic
prices on imported
goods (and possibly imported good)
Helps
producers
Direct restriction
on the quantity of a
good that can
be imported into
a country.
Import Quotas
Quota on trade imposed
by the exporting
country at the request
of the importing
country’s government.
VERs
Quota
rent
Local Content Requirements
A specific
fraction of a
good must be
domestically
produced.
A specific
fraction of a
good must be
domestically
produced.
Physical
amount
Value
Widely used
by developing
countries to
develop their
manufacturing
base.
Used by developed
countries to
protect local jobs
and industry from
foreign competition.
Administrative Policies
- Bureaucratic rules designed to make it difficult for imports to enter a country.
- Japanese ‘masters’ in imposing rules.
- Tulip bulbs.
- Federal Express.
Antidumping Policies
- Selling goods into a foreign market below production costs, or
- Selling below “fair market value”.
- Used to unload excess production.
- Or, predatory pricing.
- Antidumping policies are used to:
- punish foreign firms.
- Protect local industry from “unfair” practices.
- Impose “countervailing” duties.
Agricultural Subsidies
- Developed nations spend > $300b/year to subsidize their farmers.
- Why?
- EU set a min. price for butter €3,282/ton
- EU subsidize sugar beet producers /w min guarantee price
- US subsidize cotton farmer; guarantee $.70/pound.
- Consequences?
The Costs of Protectionism
- Import tariffs to protect US firms and employees from the effects of low-cost foreign competitors
- These tariffs removed an incentive for firms in the protected industries to become more efficient.
Slow down economic progress
- Results: Sugar price increase 40%
Textile price increase 70%
- In 1996, import protection cost US cons. $223.4 b in higher prices.
Commercial Policies
The Pros and Cons of Government Regulation of
International Trade
- Pros:
- Cost of unemployment is high.
- Provides time to start up (or retool an industry).
- Long term; increased competition and associated benefits).
- Vital to defense.
- Diversification of economy.
- Cons:
- Ineffective allocation of resources.
- Reduces incentive to reinvest.
- Increases costs to consumers in short run and long run, to all.
- Leads to over capacity.
- Possible reciprocity.
Global Trade Organizations
- United Nations Conference on Trade and Development (UNCTAD).
- World Trade Organization (WTO).
There are many other international organizations, but the WTO and UNTAD are the two main TRADE-related global entities. There are others, such as the United Nations Commission on International Trade Law (UNCITRAL): http://www.uncitral.org.
Chapter 2
United Nations Conference on Trade and Development
- Although WTO has been an important force in world trade expansion, benefits are not distributed equally.
- Under WTO, trade expanded especially in manufactured goods
Creating a growing trade gap b/w industrial and developing nations.
- Less developed countries are dissatisfied with trade arrangements b/c their share of world trade has been declining.
- they formed UNCTAD in 1964
There are many other international organizations, but the WTO and UNTAD are the two main TRADE-related global entities. There are others, such as the United Nations Commission on International Trade Law (UNCITRAL): http://www.uncitral.org.
Chapter 2
United Nations Conference on Trade and Development
Objectives:
- To further the development of emerging nations.
- To improve the prices of primary goods exports through commodity agreements.
- To establish a tariff preference system favoring the export of manufactured goods from less developed countries.
There are many other international organizations, but the WTO and UNTAD are the two main TRADE-related global entities. There are others, such as the United Nations Commission on International Trade Law (UNCITRAL): http://www.uncitral.org.
Chapter 2
International Financial System
- Exchange rate instability
- International Monetary Fund (IMF)
- Goal: to promote worldwide financial stability and economic growth
- The World Bank
- Mission: to promote economic growth
- Provide loans for infrastructure development (especially for developing nations)
- To further the development of emerging nations.
There are many other international organizations, but the WTO and UNTAD are the two main TRADE-related global entities. There are others, such as the United Nations Commission on International Trade Law (UNCITRAL): http://www.uncitral.org.
Chapter 2
Principal Regional Economic Groups
Table 2-5
The EFTA agreement was signed on January 4, 1960 and included Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom. Today, EFTA is an international organization that includes Iceland, Liechtenstein, Norway and Switzerland. The original EFTA members, except for Switzerland, decided to take more comprehensive steps to unify trading (and many other) policies and went on to form, or later became members of what is the European Union (EU). Because there are great benefits to the members for cooperation, in 1992 EFTA and the EU agreed to form an even larger country grouping called the European Economic Area (EEA) that contains all the EU and EFTA members, except for Switzerland.
In the 1960s, the Latin Americans responded to European integration moves by forming regional groupings of their own. In Central America, they formed the Central American Common Market; in South America, they formed the Latin American Free Trade Area; the Andean countries broke away from LAFTA to form the Andean Common Market. In the early 1990s, the Southern Cone countries (Argentina, Brazil, Paraguay, and Uruguay) formed Mercosur.
During the Vietnam War, a number of Southeast Asian nations formed ASEAN (Association of Southeast Asian Nations). ASEAN includes over 500 million people, with a collective GNI of more than US$750 billion. In 1992, ASEAN launched AFTA, the ASEAN Free Trade Area, the strategic objective of which is to increase the ASEAN region’s competitive advantage as a single production unit.
The United States is a member of two free-trade areas, one with Israel and one with Canada and Mexico in NAFTA. NAFTA is very important because it creates a free-trade area of 410 million consumers—as large as the EU-EFTA grouping. As with any regional grouping, NAFTA has encountered some rough spots, but its importance can be seen in the fact that the three member countries are each other’s largest customers and suppliers. (The U.S. also has agreements on free trade with many nations, including Chile, Jordan, Australia, and others, but these are not the same as free trade areas.) In December 1994, Canada, the United States and Mexico as well as other nations in the Americas established the FTAA, the Free Trade Agreement of the Americas (34 members; 800 million people) that stretches from Alaska to Tierra del Fuego. The goal was to complete negotiations for the agreement by December, 2005.
ALADI web site: http://www.aladi.org/; ASEAN web site: http://www.aseansec.org/home.htm (but tends to go offline for extended periods. Also try: http://www.asean.or.jp/eng/index.html); CAN web site: http://www.comunidadandina.org/endex.htm; CARICOM web site: http://www.caricom.org/; ECOWAS web site: http://www.ecowas.int/; EU web site: http://europa.eu.int/index.htm; MERCOSUR web site: http://www.sice.oas.org/trade/mrcsr/mrcsrtoc.asp; NAFTA web site: http://www.ustr.gov/Trade_Agreements/Regional/NAFTA/Section_Index.html. For additional information, please see Everything International: http://faculty.philau.edu/russowl/region.html.
Chapter 2
|
ALADIA: La Asociación Latinoamericana de Integración {Latin American Integration Association (LAIA)} |
Argentina, Bolivia, Brazil, Chile, Columbia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela |
|
ASEAN: Association of Southeast Asian Nations |
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam |
|
CAN: Comunidad Andina {Andean Community} |
Bolivia, Columbia, Ecuador, Peru and Venezuela |
|
CARICOM: Caribbean Community |
Antigua and Barbuda, Bahamas, the Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago |
|
ECOWAS: Economic Community of West African States |
Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo |
|
EU: European Union |
Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom |
|
MERCOSUR |
Argentina, Brazil, Paraguay, and Uruguay |
|
NAFTA: North American Free Trade Area |
Canada, Mexico, the United States |
Regional Economic Integration
Table 2-6
What
Economic alliances, a.k.a. economic integration, supranational organizations, multinational markets.
The basis is that nations felt that regional political and economic goals could be harmonized more realistically than those pursued on a global basis through other supranational organizations like the UN, IMF, IBRD, WTO, etc.
All are aimed at improving the economic situation of member countries. The tradeoff is that all members must give up some amount of national sovereignty.
Where
All over - (ASEAN, ECOWAS, EU, LAIA, MERCOSUR, NAFTA, .......)
Types – see above
Also: Regional cooperation groups
Some are project oriented and are formed because the requirements exceed a single nation's resources (e.g., Arianne).
Some are formed to control resources/products (e.g., OPEC, Debeers, coffee, bauxite, and rubber).
Chapter 2
|
FORMS OF ECONOMIC INTEGRATION |
|||||
|
Stage of Integration |
Elimination of Trade Barriers among Members |
Common Trade Barriers among Members |
Free Factor Mobility |
Harmonization of Economic Policies |
Harmonization of Political Policies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Trade Area |
Yes |
No |
No |
No |
No |
|
Customs Union |
Yes |
Yes |
No |
No |
No |
|
Common Market |
Yes |
Yes |
Yes |
No |
No |
|
Economic Union |
Yes |
Yes |
Yes |
Yes |
No |
|
Political Union |
Yes |
Yes |
Yes |
Yes |
Yes |
Pricing and the Euro
- Benefits:
- Costs go down.
- Comparison is easier.
- Drawbacks:
- Confusion increases.
- Suspicion is high.
Consider that there are a number of markets after each enlargement that wish to join the ‘Euro-zone’.
- Costs go down. People would be able to travel from one end of Europe to the other without having to exchange Spanish Pesetas for Belgian Francs. Depending on the service charges, formerly a tourist would lose between 25 and 50 percent if they were to stop in each EU country and exchange some of their money.
- Comparison is easier. Pricing would become more transparent (easier to see price differences). Formerly, if one could buy a Sony 27" television in the U.K. for 547£ and the same television cost 1,443 DM in Germany, the consumer might not notice a price difference (with an exchange rate of 2.3 DM for 1£, the TV costs about 80£ more in Germany). But, if both countries used the Euro, a 40 or 50 Euro price difference might cause some to purchase the product in one country over another.
- Confusion increases. Imagine dealing with a foreign currency in your own country. People will need calculators with a Euro button, much as there is a square root button on most calculators (enter the amount of your currency, press the button and the amount is displayed in euros!).
- Suspicion about corporate greed is high. Everything must be ‘repriced’ from gasoline to pension contributions to fines. Many believe that the companies round up, rather than round down and have built in price increases into all their products. While specifically illegal, there is evidence that some of this occurred in the changeover (as it will in nations admitted to the EMU).
Even though transaction costs go down in the long run, initially costs are high since new price signs, packaging, menus, etc. must be printed to reflect new currency; all government documents that include currencies must be restated (at least for comparison from one year to anotehr). Firms must resort earning in multiple years and have them audited again for translation accuracy…..
Archived discussions in pre-2001 are also interesting: http://europa.eu.int/euro/home5.jsp?lang=5
Chapter 2
Recommended Web Sites
- General Data:
- Data Query. (IBRD).
- Dynamic Document Creator (Strategis)
- Trade:
- International Trade Statistics (WTO).
- Trade Stat Express (US Trade with others).
- Interactive International Trade Theory.
Top 10 Purchasers
U.S. Exports
($US billions)
Top 10 Suppliers
U.S. Imports
($US billions)
Canada 169.5 Canada 224.2
Mexico 97.5 China 152.4
Japan 52.1 Mexico 138.1
United Kingdom 33.9 Japan 118.0
Germany 28.8 Germany 68.0
China 28.4 United Kingdom 42.7
Korea, Republic 24.1 Korea, Republic 37.0
Netherlands 20.7 Taiwan 31.6
Taiwan 17.5 France 29.2
France 17.1 Ireland 25.8
2002
billions $US and (percent)
Area or Nation
Gross National/ World
Income (current)
a
Exports, (percent
of World Total)
Imports, (percent
of World Total)
World $32,312.2 (100.0)
Manufactured Goods
b
6,455.0 (100.0) 6,693.0 (100.0)
Commercial Services 1,570.0 (100.0) 1,545.0 (100.0)
Brazil $452.4 (1.4)
Manufactured Goods 60.4 (0.9) 49.7 (0.7)
Commercial Services 8.8 (0.6) 13.6 (0.9)
China $1,266.1 (3.9)
Manufactured Goods 295.2 (4.4) 325.6 (5.0)
Commercial Services 39.4 (2.5) 46.1 (3.0)
Germany $1,984.1 (6.1)
Manufactured Goods 613.1 (9.5) 493.7 (7.4)
Commercial Services 99.6 (6.3) 149.1 (9.6)
Mexico $637.2 (2.0)
Manufactured Goods 160.7 (2.5) 173.1 (2.6)
Commercial Services 12.5 (0.8) 17.0 (1.1)
Russian Federation $346.5 (1.1)
Manufactured Goods 106.9 (1.7) 60.5 (0.9)
Commercial Services 12.9 (0.8) 21.5 (1.4)
United States $10,383.1 (32.1)
Manufactured Goods 639.9 (10.7) 1,202.4 (18.0)
Commercial Services 272.6 (17.4) 205.6 (13.3)
Absolute Advantage
Production Possibilities (000s)
Steel Steel
US 10 C KOREA
5 B
2 A
1 B
C Lumber A Lumber
0 100 200 0 50 100 200
"Total World" Production
Point Quantity
A - 100,000 board feet of lumber and 2,000 tons of steel.
B - 150,000 board feet o f lumber and 6,000 tons of steel.
C - 200,000 board feet of lumber and 10,000 tons of steel.
ALADIA: La Asociación Latinoamericana de Integración {Latin
American Integration Association (LAIA)}
Argentina, Bolivia, Brazil, Chile, Columbia, Cuba, Ecuador,
Mexico, Paraguay, Peru, Uruguay, and Venezuela
ASEAN: Association of Southeast Asian Nations Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand, and Vietnam
CAN: Comunidad Andina {Andean Community} Bolivia, Columbia, Ec uador, Peru and Venezuela
CARICOM: Caribbean Community Antigua and Barbuda, Bahamas, the Barbados, Belize, Dominica,
Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and
Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname,
Trinidad and Toba go
ECOWAS: Economic Community of West African States Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana,
Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal,
Sierra Leone, and Togo
EU: European Union Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy,
Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland,
Portugal, Slovakia, Slovenia, Spain, Sweden, and the United
Kingdom
MERCOSUR Argentina, Brazil, Paraguay , and Uruguay
NAFTA: North American Free Trade Area Canada, Mexico, the United States
Comparative Advantage
Production Possibilities (000s)
Steel Steel
10 A US KOREA
8 C
5 B
4 B
C Lumber A Lumber
0 50 100 0 16 32 100
"Total World" Production
Point Quantity
A - 32,000 board feet of lumber and 10,000 tons of steel.
B - 66,000 board feet o f lumber and 9,000 tons of steel.
C - 100,000 board feet of lumber and 8,000 tons of steel.
Merchandise
Exports
($US Billion)
Merchandise
(percent)
Service
Exports
($US Billion)
Service
(percent)
World 6,454.9 100.0 1,511.2 100.0
Economic Development
Low 211.2 3.3 41.0 2.7
Middle 1,447.0 22.4 225.6 14.9
High 4,796.7 74.3 1,244.6 82.3
Geographic Area
Africa 140.0 2.2 31.0 2.0
Asia 1,620.0 25.8 322.0 20.5
Central & Eastern Europe 314.0 5.0 60.0 3.8
Western Europe 2,657.0 42.4 763.0 48.6
Middle East 244.0 4.0 29.0 1.8
Latin America 350.0 5.6 56.0 3.6
North America 946.0 15.1 309.0 19.7
FORMS OF ECONOMIC INTEGRATION
Stage of
Integration
Elimination of Trade
Barriers among
Members
Common Trade
Barriers among
Members
Free Factor
Mobility
Harmonization of
Economic
Policies
Harmonization of
Political Policies
Free Trade Area Yes
No No No No
Customs Union Yes Yes
No No No
Common Market Yes Yes Yes
No No
Economic Union Yes Yes Yes Yes
No
Political Union Yes Yes Yes Yes Yes
Current Account
Credits
Debits
Export of goods, services
and income
$1,069,531
Merchandise
773,304
Services
296,227
Income receipts on
investments
345,394
Imports of goods, services
and income
$-1,797,061
Merchandise
-1,222,772
Services
-215,239
Income payments on
investments
-359,050
Unilateral transfers
-53,241
Balance of current account
-435,377
Capital Account
US assets abroad (net)
-553,349
Foreign assets in the US
952,430
Balance on capital account
399,081
Statistical discrepancy
35,616