WASHINGTON -- In a rewarding but little-noticed role reversal, the nations of the developing world have quietly been helping the affluent United States through hard times.
The reason: U.S. exports to the developing nations grew almost six times as fast last year as sales to the industrialized world. From 1990 to 1991, exports to developing countries increased 15.2 percent, to $146.8 billion, while exports to the developed world were up 2.57 percent, to $263.5 billion.
The increase in sales to the Third World accounted for 55 percent of total U.S. export growth between the third quarter of 1989 and the same quarter of 1991, according to a study by Stephen Roach, senior economist with Morgan Stanley in New York.
Latin America and Southeast Asia, where economic growth has averaged a healthy 5 percent a year, were the boom areas. Demand has been high for machinery and equipment needed to expand economies in those areas.
"There has been a dramatic shift in the mix of our export shipments over the past two years," Mr. Roach said. "While Europe, Japan and Canada are still our largest trading partners, the incremental change in our export patterns has been dominated by a striking surge of American-made goods to Latin America and the newly industrialized nations of Asia."
The diversification helps reduce U.S. dependence on traditional trading partners and could help cushion the U.S. economy against the negative impact of the slowdowns in Japan and Germany, two of the richest export outlets. It also reflects improved U.S. competitiveness.
"It is not true to say, 'As the U.S. goes, so goes Latin America' or 'As Japan goes, so goes the rest of Asia.' It just has not panned out that way. Look at the numbers; look at the growth rates," Mr. Roach said.
Overall U.S. exports have risen nearly 30 percent during the past three years, but from 1990 to 1991 the rate of increase slowed to 7.1 percent, taking the global total from $393.8 billion to $421.8 billion.
Exports to the United States' largest customer, Canada, were 1.5 percent higher in 1991 than in 1990, at $85.1 billion, while exports to Japan showed a trend-reversing decline of 0.8 percent, to $48.1 billion. Exports to the European Community expanded by 5.2 percent, to $103.2 billion, with the German share increasing by 14 percent, to $21.3 billion
Claude Barfield, international trade expert at the conservative American Enterprise Institute, said, "The trend may be quite beneficial if it continues. Those economies are not as affected by the downturn as Japan and Western Europe" are.
But Steven Cooney, economist with the international department the National Association of Manufacturers, questioned the significance of the increase in imports to developing countries.
"You get impressive percentage changes in [exports to] developing countries, but in most of these cases the markets are small. A 1 percent growth in demand in Germany is more important than a 5 percent growth in demand in Korea, or a 100 percent increase in demand for exports to some place like India," Mr. Cooney said.
Such countries as Mexico, Taiwan and South Korea were industrially advanced enough to be considered developed nations, he said, adding that their markets added disproportionately to the impact of the "developing" countries' totals.
"There are three markets you have to cover if you are an industrial manufacturer -- the Far East, North America [including Mexico] and Europe. The big three marketing regions that are going to dominate American industrial plans and American industrial policy for the next 10 years will be those three markets," he said.
The Bush administration is negotiating a North American free trade agreement with Canada and Mexico, which will create the world's largest trading bloc of 360 million consumers with a $6 trillion economy.
Exports to Mexico have increased 60 percent over the past three years, three times the growth of U.S. trade with Canada over the same period, twice the rate for Japan and well above the 36.5 percent increase for trade with the European Community. Mexico's per capita consumption of U.S. goods is already higher than the per capita consumption in either Japan or Europe.
Trade and investment agreements have been completed with 31 countries as the administration pushes for free trade throughout Latin America and the Caribbean under its Enterprise for the Americas Initiative.
U.S. exports to Central and South America, excluding Mexico, grew from $31 billion in 1986 to $53 billion in 1990. Exports to Argentina were up 74 percent last year; to Venezuela, 50 percent; and to Uruguay, 49 percent.
Southeast Asia is also enjoying an investment boom as Japanese companies, attracted to South Korea and Taiwan in the 1960s and 1970s, again relocate in the region in search of lower-paid labor, and Korea and Taiwan progress to more sophisticated production lines for electronics and autos. That has prompted industrial and infrastructure expansion, creating a market for the sort of goods the United States can competitively supply.
Since 1988, U.S. exports to Thailand have risen 91 percent; to Malaysia, 82 percent; and to South Korea, 38 percent.
"We expect this shift to continue; therefore, we see strong Southeast Asia demand in the years ahead," says the current issue of DRI/McGraw-Hill's U.S. Forecast Summary.
In billions of dollars
.. .. .. .. .. 1990. ... 1991. ... change
World.. .. ... 393.8.. .. 421.8. ... +7.1%
nations.. .. . 256.8.. .. 263.5. ... +2.6%
nations... ... 127.4.. .. 146.8.. .. +15.2%
and China.. .. . 9.6. .. . 11.5.. .. +19.8%