Indeed, in the first half of this year, the quantity of exports declined two quarters in a row for the first time since the mid-1980s, with shipments to Korea and Japan down sharply. Declines in exports of machinery, industrial supplies, and agricultural equipment were especially noteworthy.
When we include the effect of rising imports as well, net exports subtracted more than 2 percentage points from GDP growth over this period, and our trade deficit on goods and services widened to about $ billion at an annual rate in the second quarter. I should emphasize that not all of the effects on our economy of the Asian crisis have been adverse.