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)