	Background

During the Obama Administration, the United States considered two mega-regional free trade agreements that its participants argued were comprehensive and high-standard: the Trans-Pacific Partnership (TPP) among the United States and 11 other countries, and the U.S.-European Transatlantic Trade and Investment Partnership (T-TIP). The 12 TPP countries signed the agreement in February 2016, but the agreement required ratification by each country before it could enter into force. In the United States, this required implementing legislation by Congress. Upon taking office, however, President Trump withdrew the United States from the TPP and halted further negotiations on the T-TIP. The remaining 11 partners to the TPP concluded, without U.S. participation, a revised TPP, now identified as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Trump Administration is also attempting to revise the two largest existing U.S. FTAs, through the ongoing renegotiation of the North American Free Trade Agreement (NAFTA), and modification talks regarding the U.S.-South Korea (KORUS) FTA. President Trump has addressed trade broadly and trade agreements more directly through an assertive trade enforcement agenda and vocal skepticism of past U.S. trade agreements and the potential benefits of trade. The Trump Administration also has characterized U.S. trade agreements as unfair and detrimental to the economy, a viewpoint that is not shared by U.S. trading partners, established economic analysis, and various business and consumer groups. For some observers, the growing globalization of the economy raises concerns that the cost of U.S. leadership in the global arena is outstripping the benefits of U.S. global engagement. Others argue that the United States needs to renegotiate its role and require others to share more of the costs. At times, data on U.S. trade with FTA partner countries are provided by various groups in different formats, which present various conclusions about U.S. trade balances with FTA partners. Bilateral Trade Balances

In most cases, economists question the usefulness of using bilateral trade balances as indicators of trade relations, of the effectiveness of a trade agreement, or of the costs and benefits of a trade agreement. Issues for Congress

In discussing proposed FTAs, both advocates and opponents of such agreements often focus on the U.S. merchandise trade balance with existing FTA partners as one way of measuring the success of such agreements. Economists generally argue, however, that due to the nature of recent FTAs, bilateral trade balances serve as incomplete measures of the comprehensive nature of the trade and economic relationships that often exist between the United States and its FTA partners. For instance, recent trade agreements include trade in services, provisions for investment, and trade facilitation, among other areas that are not reflected in bilateral merchandise trade balances.
During the Obama Administration, the United States negotiated two mega-regional free trade agreements that its participants argued were comprehensive and high-standard: the Trans-Pacific Partnership (TPP) among the United States and 11 other countries, and the U.S.-European Transatlantic Trade and Investment Partnership (T-TIP). The 12 TPP countries signed the agreement in February 2016, but the agreement required ratification by each country before it could enter into force. In the United States, this required implementing legislation by Congress. Upon taking office, President Trump withdrew the United States from the TPP and halted further negotiations on the T-TIP, but may reengage in the TPP under different terms. The remaining 11 partners to the TPP concluded, without U.S. participation, a revised TPP, now identified as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Trump Administration is also attempting to revise the two largest existing U.S. FTAs, through the ongoing renegotiation of the North American Free Trade Agreement (NAFTA), and modification talks regarding the U.S.-South Korea (KORUS) FTA.
President Trump has addressed trade broadly and trade agreements more directly through an assertive trade enforcement agenda and vocal skepticism of past U.S. trade agreements and the potential benefits of trade. The Trump Administration has characterized U.S. trade agreements as unfair and detrimental to the economy, a viewpoint that is not shared by U.S. trading partners, established economic analysis, and various business and consumer groups. For some observers, the growing globalization of the economy raises concerns that the cost of U.S. leadership in the global arena is outstripping the benefits of U.S. global engagement. Others argue that the United States needs to renegotiate its role and require others to share more of the costs. The Trump Administration's approach does not rule out the possibility that some countries are not fully abiding by international trade agreements and rules. Such actions may distort market performance and erode public support for the international trade system.
Discussions of FTAs often focus on trade balances, particularly U.S. bilateral merchandise trade balances with its FTA partner countries, as one way of measuring the success of the agreements. Although bilateral merchandise trade balances can provide a quick snapshot of the U.S. trade relationship with a particular country, most economists argue that such balances serve as incomplete measures of the comprehensive nature of the trade and economic relationship between the United States and its FTA partners. Indeed, current trade agreements include trade in services, provisions for investment, and trade facilitation, among others that are not reflected in bilateral merchandise trade balances.
This report presents data on U.S. merchandise (goods) trade with its Free Trade Agreement (FTA) partner countries. The data are presented to show bilateral trade balances for individual FTA partners and groups of countries representing such major agreements as the North America Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement and Dominican Republic (CAFTA-DR) relative to total U.S. trade balances. This report also discusses the issues involved in using bilateral merchandise trade balances as a standard for measuring the economic effects of a particular FTA.