WASHINGTON (AP) -- The trade deficit broke a record for the third straight month in March as countries struggling to recover from economic turmoil continued to unload their products in the United States' booming economy. ``Until the pace of economic growth in the United States slows and the rest of the world picks up, the deficit will continue to grow. It is just that simple,'' said David Orr, chief economist with First Union Corp., in Charlotte, N.C. The March trade deficit of $19.7 billion was 2.9 percent higher than the previous record of $19.1 billion set in February, the Commerce Department said Thursday. So far this year, the trade deficit is running at an annual rate of $222.6 billion, nearly one-third higher than the all-time high of $169.3 billion set last year. But there are glimmers of hope for improvement now that some countries in Asia and elsewhere have begun a fragile recovery. U.S. exports, which had fallen for four straight months, staged a small rebound in March, climbing by 0.9 percent to $77.5 billion. Exports of farm goods were up 2.5 percent, led by rising sales of soybeans and corn. Farmers have been among the hardest hit by the loss of markets abroad. Also, a separate report Thursday showed that steel imports fell by 14 percent in April, based on preliminary data, a good sign for the country's beleaguered steel industry that has been battered by cheap imports. However, eager American shoppers -- continuing to enjoy the lowest unemployment in nearly three decades and healthy stock market gains -- caused overall imports to rise much faster than exports, climbing 1.3 percent to a record $97.2 billion. Part of that increase reflected rising oil prices, which jumped by nearly $1 dollar a barrel, increasing America's bill for foreign crude oil by $213 million. In a striking example of the impact of cheaper imports on American manufacturers, foreign car imports jumped to an all-time high of $14.9 billion in March, a 2.5 percent increase. Meanwhile, American car makers saw their exports fall by 2.5 percent. The Clinton administration has argued that the trade deficit reflects American strength. As the only major world economy doing well, the United States plays a valuable role by providing a market for countries struggling to emerge from deep recessions. Many economists also note that the influx of low-priced imports has helped keep U.S. inflation under control. ``The wide trade deficit may cause some to fret, but given the labor shortages in this country, let's be glad there is an outlet for our demand,'' said Joel L. Naroff, chief economist with Naroff Economic Advisers in Holland, Pa. However, if the trade deficit gets much worse, Congress may face irresistible pressure to erect barriers to protect industries hurt by foreign competition. The steel industry has already won a House vote to impose global quotas on steel imports into the U.S., despite a threatened Clinton veto. Commerce Secretary William Daley on Thursday reiterated the administration's warnings to Japan and European nations that the United States can't go it alone forever and they must take steps to improve their domestic demand. For March, America's overall trade deficit with Japan shot up 23.2 percent to $6.5 billion as Japanese imports to the United States reached an all-time high. The U.S. trade deficit with the 15-nation European Union, meanwhile, soared 30 percent to $2.6 billion. America's deficit with Mexico, one of its partners in the North American Free Trade Agreement, hit a record $2.5 billion, up 26 percent from the previous month. The deficit with China declined by 10.5 percent in March to $4.1 billion, but was still the second largest for any nation. China has been negotiating an agreement to lower barriers to American goods in hopes it will clear the way for its entry into the World Trade Organization. However, NATO's mistaken bombing of the Chinese Embassy in Yugoslavia and tensions over human rights have threatened any quick deal. -=-=- 