AMERICAN EXPORTS have fallen over the past year, as you would expect in a recession. But the pattern is instructive. Since demands for protection against imports are becoming a central issue in American politics, it's not a bad idea to keep an eye on the actual figures. The Commerce Department has just published the data for 1982, a panorama of this country's economic relations with the rest of the world.
The striking thing about the drop in exports is the extent to which it is concentrated in only two countries--Canada and Mexico. The Canadian case is simply the mirror image of our own recession. Mexico's situation is complicated by its debts, the price of oil, and its devalued currency. But both are reminders that downturns in the United States have disproportionately severe consequences in the two countries that share its borders, and, as they buy less here, their troubles feed back into our own factories.
But even in a year of prolonged recession, this country sold $211 billion worth of goods abroad last year. Simply for purposes of comparison, that is four times the output of the American automobile industry. You have heard it said repeatedly that the American economy is becoming less competitive. Is it? A decade ago the United States exported about 4 percent of its GNP. That proportion has nearly doubled since then. If American producers' ability to compete is declining, why have export sales been rising?
Competitiveness, by the way, doesn't have much to do with industrial efficiency. It's really a matter of exchange rates. The current trade disputes between this country and Japan are a good example. While some of Japan's industries are world leaders, the productivity of the Japanese economy as a whole is slightly less than three-fourths the American level. That puts it a little ahead of Britain and Italy and well behind France and Germany in national productivity. But the Japanese are great savers with money to invest, while the United States has got its interest rates abnormally high. The stream of capital flowing from Japan into this country depresses the yen and raises the value of the dollar in the exchange markets. That makes Japanese goods unusually cheap here, by American standards.
The moral of the story is that American performance in the world economy is a good deal better than most of Congress seems to think. Where there are imbalances and trade quarrels, import quotas and tariffs won't help. The right remedy is cooperation among governments on monetary policy to correct the distorted currency exchange rates that exaggerated interest rates have produced.