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©AFP/File / Hector Mata

The trade deficit shrank to 37.3 billion dollars down from a revised 39.9 billion dollars

WASHINGTON (AFP) - The US trade deficit narrowed unexpectedly in January as imports and exports declined and overall volume fell for the first time in five months, the government reported Thursday.

The Commerce Department said the trade deficit shrank to a seasonally adjusted 37.3 billion dollars, from a downwardly revised 39.9 billion dollars in December.

The figures surprised most analysts who had expected the trade shortfall would increase to 41.0 billion dollars.

"The recent roller-coaster ride in trade news continues with this month's release, though the overall trend of slowly growing trade volume continues," said Christopher Cornell at Moody's Economy.com.

Imports dropped 1.7 percent to 180.0 billion dollars, including the lowest level of oil imports in more than a decade, while exports slipped 0.3 percent to 142.7 billion dollars.

Analysts noted the slowing trade flows had come after surges in previous months.

Natixis analyst Inna Mufteeva said the data clouded the outlook for the country's fragile recovery from severe recession that began in December 2007.

"Improvement in US consumption did not impress much the importers as consumer goods imports dropped 2.3 percent in January," she said.

Consumer spending accounts for two-thirds of US economic activity and is considered key to sustainable growth in a budding recovery that so far has been propped up by government spending.

US trade volume with the rest of the world declined for the first time since August, by 1.1 percent from December, the data showed.

"We are inclined to view it as a seasonal adjustment or weather story, or both, and we expect trade flows to rebound strongly in February," said Ian Shepherdson at High Frequency Economics.

©AFP/Getty Images/File / Joe Raedle

The January deficit surprised most analysts who had expected the trade shortfall would increase to 41.0 billion dollars

The lower January deficit was partly due to crude oil imports that slumped to their lowest level since February 1999, at 245 million barrels.

The gap in petroleum products, however, again weighed heavily on the trade balance, though it narrowed to 22.7 billion dollars in January from 23.6 billion dollars the previous month.

The average price of imported oil jumped to 73.89 dollars, its highest peak since October 2008.

In unadjusted data, the trade deficit with Canada, the largest US trading partner, grew to 3.9 billion dollars, marking the biggest gap since October 2008.

The deficit with Mexico narrowed to 4.6 billion dollars from 5.2 billion dollars.

The politically sensitive trade deficit with China edged up to 18.3 billion dollars from 18.1 billion in December.

"Do not expect the situation to last," warned Moody's Cornell, after China reported February trade data Wednesday showing exports soared for the third straight month and at their fastest pace in three years.

"These will be reflected in the US trade data for February, set for release next month," he said.

The country's massive trade gap with China, by far its largest with any trading partner, is an underlying source of friction in bilateral trade ties.

Critics accuse Beijing of keeping its yuan currency undervalued to maintain a trade advantage.

President Barack Obama Thursday called on China to embrace a "market-oriented" exchange rate for its yuan currency, according to an advance copy of a major speech on trade he was due to deliver later in the day.

"China moving to a more market-oriented exchange rate would make an essential contribution" to efforts to rebalance imports and exports in the global economy, he said.

The US trade deficit narrowed with other major trading partners: to 3.3 billion dollars with Japan and 2.8 billion dollars with the European Union.

©AFP/File / Robert Sullivan

Peter Bethune, a member of the militant Sea Shepherd Conservation Society, has been arrsted in Japan

TOKYO (AFP) - A New Zealand anti-whaling activist was arrested in Japan Friday after a harpoon ship he boarded in Antarctic waters last month docked in Tokyo, greeted by police and nationalist protesters.

Peter Bethune, of the militant Sea Shepherd Conservation Society (SSCS), was engaged in months of high-seas clashes with the Japanese whaling fleet but has been in custody since mid-February when he boarded the Shonan Maru II.

About 20 angry nationalist protesters with Rising Sun flags, watched over by riot police, lined the pier and shouted through megaphones: "Step forward Pete Bethune! Apologise to the Japanese people! We will tear you apart!"

The harpoon ship docked alongside a vessel of the Japan Coast Guard, whose officers served him with an arrest warrant for trespass on a ship, a charge that can carry up to three years' jail.

It is the latest chapter in a long-running battle between environmentalists and Japanese whalers, who hunt the ocean giants in the name of scientific research, a loophole to a moratorium on whaling.

Japan maintains that whaling has been part of the island-nation's culture for centuries, and it does not hide the fact that whale meat from its expeditions ends up in shops and restaurants.

As TV helicopters buzzed overhead, the protesters -- watched by riot police and plain-clothed officers with video cameras -- also expressed their fury with Australia, which has threatened to take Japan to an international court unless it commits to ending its annual whale hunts.

Japan's Fisheries Minister Hirotaka Akamatsu told a press conference that the nation would maintain a "resolute stance" but said he did not see a diplomatic row brewing.

©AFP Graphic

Graphic on the Japanese whaling catch in Antarctic waters in recent years

Bethune, 44, was the captain of the Sea Shepherds' high-tech powerboat that was sliced in two in a collision with the Shonan Maru II in January.

He climbed aboard the Japanese ship before dawn on February 15 from a jet ski with the stated intention of making a citizen's arrest of captain Hiroyuki Komiya for what he said was the attempted murder of his six crew.

Bethune also presented the Japanese whalers with a three-million-dollar bill for the futuristic carbon-and-kevlar trimaran Ady Gil, which sank in the icy waters a day after the collision on January 6.

Instead, the Japanese whalers took Bethune into custody and sailed for Japan. They reported he was in good health and being treated well, unrestrained but under watch in a private cabin with three meals a day.

The SSCS, which has called Bethune the first New Zealander taken as a "prisoner of war" to Japan since World War II, said on its website it was preparing legal representation for the skipper.

The group declared an end to this season's pursuit of Japanese harpoon ships in Antarctic waters on February 27, saying it had been the most successful campaign so far, saving many whales.

If Bethune faces trial in Japan, it would be the second court case there centred on whaling, besides the ongoing proceedings against two Japanese Greenpeace activists now in the dock in the northern city of Aomori.

The so-called "Tokyo Two" face up to 10 years in prison for theft and trespassing after they took a box of salted whale meat, which they said was proof of embezzlement in Japan's state-funded annual whaling expeditions.