Despite a record U.S. trade deficit in 1977, American exporters haven't suffered any "noticeable" loss in price competitives compared with other major industrial countries, a high-ranking Treasury official said yesterday.
In fact, according to Assistant Treasury Secretary C. Fred Bergstein, the decline in the value of the dollar last year and so far in 1978 has offset the decline in competitives caused by an overvalued dollar and inflated U.S. prices in 1974-75.
But he said that the rising industrial strength in a group of more advanced developing nations offers "increased competition for the United States and all other industrial countries which we must consider carefully in assessing our own competitive position now and in the future."
Impressive gains in both manufacturing capacity and in export shares have been registered by Brazil, Mexico, Taiwan, Hong Kong, Singapore, the Phillipines, South Korea, and Malaysia, Bergsten said.
U.S. exports to these countries have also grown. Exports of manufactured goods to all less developed nations (excluding the oil-producing countries) now amount to about 25 percent of all U.S. manufactured goods exports, or more than to the entire European community, Bergsten pointed out.
The main thrust of Bergsten's remarks was that the trade deficit hit a peak when it ran at a $45 billion annual rate in the first quarter of this year.
Bergsten, in an address to a session on trade and dollar problems before The Conference Board in New York, estimated that the chaper dollar will boost exports at an annual rate of $7 to $8 billion by the end of 1978. A text of his remarks was released here.
The Carter administration stresses that the lower dollar value did not arise out of deliberate policy manipulation.
Bergsten said that not only would the trade deficit problems benefit from the depreciated dollar, but also from a recovery in economic activity in Eruope and in a number of advanced developing countries such as Mexico.
But Bergsten carefully avoided predicting whether the deficit for calendar 1978 will be less or more than the $31 billion red ink total for last year.
He noted, moreover, that the sharp increase in oil imports at higher prices "means that we will have to export a larger share of our gross national product in the future in order to produce a sustainable position in our external accounts."
President Carter has directed the Commerce Department, as part of the anti-inflation program, to recommend policies to boost export performance. This program is now being developed by Commerce Assistant Secretary Frank A. Weil, and is scheduled to be unveiled in a few weeks.
In a recept speech, Weil revealed that one proposal under discussion is a new tax incentive that would take the place of the DISC tax subsidy to encourage exports. Weil suggested creating a World Trade Corporation that would give a tax break to American companies that incur additional foreign sales expenses in an attempt to penetrate markets abroad.
Such a new incentive, Weil said, "would go to the heart of what is widely believed to be a fundamental problem for mediumsized American firms - their inability to get out and stay out in a foreign markets long enough to get started."
For the long run, Bergsten said that the emergence of the advanced developing countries and strong growth of the Communists bloc, will provide tougher competition for the traditionally strong countries of North America and Europe.
Thus, between 1963 and 1976, the share of global industrial production accounted for by Europe and North America, Bergsten said was reduced by 8 percentage points, "a very sharp change . . . for such a short time span.