IN 1986 U.S. exports reached $220 billion and imports were $365

billion, accounting for some 12 and 20 percent of the world’s exports

and imports, respectively. Yet trade constitutes a relatively small

proportion of the U.S. GNP, between 7 to 10 percent, compared with

much higher proportions for Western Europe and Japan. Manufactured

goods account for the bulk of our trade, approximately 75 to 85

percent, while the balance consists of raw materials. U.S. main trading

partners are Canada, a market for 20 and 25 percent of our exports and

imports, followed by Japan, 12 and 22 percent, and Western Europe,

24 and 27 percent (see Table 7-1).