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Last Updated: Thursday, 14 February 2008, 18:46 GMT
US annual trade deficit narrows
A container ship passes through the San Francisco Bay
Despite the falling deficit, petroleum demand remains high.
The US trade deficit narrowed in 2007, official figures show, as a rise in exports offset the country's large growth in oil imports.

The deficit reached $711.6bn (361.1bn) last year, down from $758.5bn in 2006, the Commerce Department said.

Strong demand for oil from overseas had seen the trade gap set records for five consecutive years.

December's trade deficit fell to $58.8bn from $63.1bn in November - a bigger decline than expected.

China gap widens

The decline in the dollar helped to spur exports, analysts said, as this made US products cheaper abroad and therefore more competitive.

President George W Bush's administration has said that its free trade policies have also bolstered sales overseas.

However, critics point to a deficit that is almost double the level of 2001 when President Bush came office.

As analysts had expected, the trade deficit with China grew in 2007 despite the string of recalls of Chinese-made products during the year.

The trade gap with China jumped by 10.2% to $256.3bn - the biggest the US has had with a single country.

The next largest deficits were with the European Union at $107.4bn, and Japan at $82.8bn.

Commerce Department figures showed that exports, which were helped by farm products and car and vehicle parts, totalled $1.62 trillion, while imports, led by oil, rose to $2.33 trillion.

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