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US POLICY
OBAMA ADMINISTRATION Obama Outlines Drive to Raise U.S. Exports ... FROM 2010 Original article: https://www.nytimes.com/2010/03/12/business/economy/12trade.html Peter Burgess COMMENTARY Peter Burgess | |||||||||
Obama Outlines Drive to Raise U.S. Exports
Written by Javier C. Hernández ... Sewell Chan contributed reporting.
March 11, 2010
President Obama on Thursday announced a broad effort to promote American goods overseas, hoping to bolster competitiveness abroad and create jobs in the United States.
But trade specialists questioned whether the plan had the potential to double exports in five years and create two million jobs — the president’s goal — saying the major challenge would be to overcome stiff trade barriers and create new markets.
Mr. Obama framed his plan as a means of jump-starting the sluggish economy. He called for increasing credit for small- and medium-sized businesses by $2 billion, easing restrictions on selling certain goods abroad, and the establishment of a cabinet-level panel on exports.
“In a time when millions of Americans are out of work, boosting our exports is a short-term imperative,” Mr. Obama said at a conference of the Export-Import Bank of the United States. “The world’s fastest-growing markets are outside our borders. We need to compete for those customers because other nations are competing for them.”
Economists pointed to several hurdles that must be overcome, including undervalued currencies in some countries and an abundance of tariffs and protectionist pressures. United States exporters also face tough price competition, as American goods are often more expensive because production costs are higher.
On Thursday, the Commerce Department said the trade deficit narrowed by 6.6 percent in January, to $37.3 billion.
Imports fell 1.7 percent as Americans imported the lowest monthly quantity of oil in more than a decade. Exports declined by 0.3 percent. It was the first drop since April, as demand for products like aircraft and cars dwindled.
As policy makers seek to curb the deficit by stimulating exports, some economists say they believe that the focus should be on investing in new technologies to make up for losses of market share in traditional areas like manufacturing.
“It’s not just a matter of selling what we’ve got,” said Robert E. Scott, senior international economist at the Economic Policy Institute. “We’ve got to come up with new products and break down barriers in foreign markets.”
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Credit...The New York Times
Businesses also face the problem of manipulated currencies overseas. A handful of Asian countries — economists pointed to China — continue to keep currencies at artificially low levels, making their exports more attractive to buyers than American goods. The biggest United States trade deficit continues to be with China. In January, it rose to $18.3 billion, from $18.1 billion in December, the Commerce Department said.
In his remarks, Mr. Obama singled out those policies, saying “China moving to a more market-oriented exchange rate will make an essential contribution to that global rebalancing effort.”
But few expect to see major shifts in Chinese monetary policy anytime soon, making it hard for American companies to tap into the explosive growth of emerging Asian economies.
There is also the threat of protectionism. Ralph C. Bryant, senior fellow at the Brookings Institution, said efforts to stimulate exports could prompt other countries to take similarly ambitious actions.
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“There’s no way that all countries can increase exports at the same time,” Mr. Bryant said. “If we do it and everyone else does it, it will be less successful and raise the possibility of friction.”
Administration officials said they remained confident that their policies would spur substantial growth in exports. They noted that senior officials had been instructed to work with foreign governments to broker new export opportunities.
The president’s new panel, called the Export Promotion Cabinet, will include representatives from the State Department, the Treasury, the Commerce and Agriculture Departments, and other federal agencies involved in trade. The president also named an advisory committee on international trade, called the President’s Export Council, which will be led by W. James McNerney Jr., the chief executive of Boeing, and Ursula M. Burns, the chief executive of Xerox.
In addition, the administration plans to make significant changes to the export control system, which restricts exporting certain technologies for national security reasons, like cellphones with encryption capabilities.
The export drive also faces political obstacles, chief among them the considerable disagreement in Congress, which controls trade policy, over American participation in the long-stalled Doha round of global trade negotiations.
In addition, free-trade agreements with Colombia, Panama and South Korea that were negotiated by the administration of President George W. Bush have stalled in the Senate, even though Mr. Bush and Democratic leaders in Congress agreed in 2007 to insert labor and environmental protections into the accords.
Sewell Chan contributed reporting.
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