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US tech trade deficit tops US$102b in 2006
Tue, Jul 17, 2007
AP (Associated Press)

WASHINGTON (AP) -- The U.S. technology industry imported more computers, high-tech components and consumer electronics in 2006 than it exported, resulting in a record $102 billion (euro74 billion) trade deficit in the sector, according to a new report due out Tuesday.

Total tech imports hit $322 billion (euro233.66 billion) in 2006, up 9 percent from the prior year, according to the report from the tech industry's largest trade group, AeA. The U.S. imported more high-tech goods from China than any other nation.

But the import numbers do not tell the whole picture. Many American companies, such as semiconductor giant Intel Corp., design and test their chips in the United States, but manufacture them in their plants overseas and then import them. Just how many of these "intracompany transfers" make up the overall import figure cannot be discerned from government data, according to AeA.

U.S. high-tech exports have increased over the past four years, although they are still running below the dot-com bubble record of $223 billion set in 2000, according to the report from the AeA, which includes Hewlett-Packard Co., Microsoft Corp. and Dell Inc. among its 2,500 members.

High-tech exports -- mostly semiconductors, computers and related equipment and industrial electronics -- totaled $220 billion last year, about 10 percent higher than in 2005.

That accounted for about 21 percent of all U.S. exports last year, said AeA, which used international trade data for 2006 compiled by the U.S. Census Bureau.

California topped a 50-state ranking of the biggest tech exporters that included the District of Columbia and Puerto Rico, according to the report, called "Trade in the Cyberstates 2007."

Accounting for 24 percent of U.S. tech exports, California shipped about $51.8 billion (euro37.59 billion) worth of high-tech merchandise abroad. Texas was second with $38.6 billion (euro28 billion), followed by Florida, Massachusetts and New York.

Florida's ranking shows that it has become a hub for Latin American exports, said Matthew Kazmierczak, AeA's vice president of research and industry analysis. He added that high-tech exports are vital to the economies of several other states, such as Vermont, New Mexico and Idaho. High-tech accounted for 70 percent or more of all exports in those three states.

Nationwide, the tech industry employs about 684,000 workers whose jobs are tied to exports. Total tech employment is estimated at 5.2 million jobs.

Some of those jobs could be at risk if the tech trade deficit, which has doubled since 2000, continues to widen as expected, Kazmierczak said. He argued that the federal government needs to do a better job of protecting U.S. intellectual property overseas and opening up foreign markets now inaccessible to U.S. companies.

Robert Atkinson, president of the Information Technology and Innovation Foundation, a public policy think tank, said the trade deficit has grown partly because countries such as China and India have implemented high tariffs that weaken demand for American high-tech products.

"This report is a wake-up call that should shed light on the significant unfair trade practices other countries are engaged in," he said.

 

 
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