Appendix Table A1

Trade and GDP growth, Plaza Accord (1985–1987) vs. eliminating currency manipulation (2012–2015)

Trade scenario*
Low impact High impact
Plaza Accord +$200 billion +$500 billion
Year Imports Exports GDP growth Trade deficit as a share of GDP Year Imports Exports Trade deficit as a share of GDP** Imports Exports Trade deficit as a share of GDP** GDP growth**
Base year 1985 1.7% -1.8% 4.2% 2.8% 2012 4.8% 3.3% 5.9% 4.8% 3.3% 5.9% 2.3%
Year 1 1986 9.0% 3.4% 3.5% 3.2% 2013 5.3% 8.3% 5.8% 5.3% 10.4% 5.6% 1.4%
Year 2 1987 11.2% 12.0% 3.5% 3.3% 2014 4.7% 12.3% 5.2% 3.8% 17.8% 4.3% 2.6%
Year 3 1988 9.1% 28.0% 4.2% 2.4% 2015 4.3% 14.9% 4.1% 2.6% 21.6% 2.0% 4.1%
Year 4 1989 6.8% 12.4% 3.7% 2.1%
Average 7.6% 10.8% 3.8% 2.7% 4.8% 9.7% 5.2% 4.1% 13.3% 4.5% 2.6%
Addenda
  Changes in trade flows ($ billions)  Changes in trade flows ($ billions)
1985–1988 109.1 104.3 2012–2015 314.6 514.6 253.8 753.8

*The scenarios estimate the effects of ending currency manipulation over three years, modeled as having begun in 2013. The low-impact scenario assumes ending currency manipulation would reduce the trade deficit by $200 billion in 2015 relative to the trade deficit in 2012; the high-impact scenario assumes a $500 billion reduction in the trade deficit.

**These columns show change in the measure relative to CBO forecast for GDP.

Source: Author's analysis of U.S. Census Bureau, Foreign Trade Division (2013), U.S. Department of Commerce, Bureau of Economic Analysis (2013c), Congressional Budget Office (2013a)

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