THE United States trade deficit narrowed slightly in August because imports fell a little more than exports.

The US Commerce Department yesterday said the deficit dipped to US$45.61 billion in August, the lowest gap in four months. The July deficit was revised upward to US$45.63 billion.

For the year, the deficit is running at an annual rate of US$564.3 billion, 13 percent higher than last year. A higher deficit acts as a drag on economic growth because it means fewer jobs for American workers.

In August, the US sold fewer cars, aircraft engines and oilfield equipment overseas. Exports slipped by US$95 million to US$177.6 billion.

At the same time, the US imported fewer cars, clothes, televisions and furniture. Imports fell by US$111 million to US$223.2 billion.

Congress on Wednesday approved free trade agreements with South Korea, Colombia and Panama. That ended a four-year impasse in approving new free trade deals.

The US said the deals will boost US exports by US$13 billion a year.

The South Korea FTA will support 70,000 American jobs and could lift exports by US$10 billion, the US said.

That's enough to eliminate the current US$10 billion trade deficit the US has with South Korea.