Aug 12, 2010
The White House and Congress Continue Focusing on Exports
The White House and Congress Continue Focusing on Exports
by L. Preston Bryant, Jr., McGuireWoods Consulting LLC
- National Export Initiative: Progress Report
- Obama Creates Export Council
- Sánchez Pushes Exports to Africa
- Resolving South Korean FTA Issues
- Baucus: U.S. Trade Policy Must be Rooted in Fundamentals
National Export Initiative: Progress Report
In March 2010, President Obama created via Executive Order the National Export Initiative (NEI), with the goal of doubling exports over a five-year period by removing trade hurdles, striking new trade agreements, helping small businesses export goods and services, and providing exporters more financing options. Doubling the nation's exports could create as many as two million jobs.
Obama has reported that his administration is on track to meet its export goal. In July, the President announced that exports were up 17% in the first four months of 2010 over the same period a year ago.
In 2008, according to the Obama administration, export-related jobs numbered 10.3 million and accounted for 6.9% of total U.S. employment and 12.7% of GDP. The administration also noted that more than one-third of all manufacturing jobs and nearly one-fifth of all agricultural jobs are linked to exports.
There are 275,000 U.S. companies that export goods and services, which accounts for only 1% of all domestic companies. This, says administration officials, underscores the importance of helping domestic businesses - especially small businesses - gain greater access to export financing. And the fact that most of these 275,000 exporting companies send goods to only one foreign market underscores additional growth potential.
Obama Creates Export Council
To further his NEI goals, Obama created in July 2010 the President's Export Council. He named Boeing Chairman, President, and CEO Jim McNerney the Council's chair and Xerox Corporation's Chairman and CEO Ursala Burns its vice-chair.
In addition to McNerney and Burns, Obama named the following individuals to the Council: Mary Andringa, President and CEO of Vermeer Corp.; Stephanie Burns, President and CEO of Dow Corning Corp.; Scott Davis, Chairman and CEO of UPS; Richard Friedman, President and CEO of Carpenter & Company, Inc.; Gene Hale, President of G&C Equipment Corp.; Robert Henrikson, Chairman, President, and CEO of MetLife, Inc.; William Hite, President of United Association; Robert Iger, President and CEO of The Walt Disney Company; Charles Kaye, Co-President of Warburg Pincus; Jeffrey Kindler, Chairman and CEO of Pfizer; Andrew Liveris, President, Chairman, and CEO of The Dow Chemical Company; Robert Mandell, former Chairman and CEO of Greater Properties; Alan Mulally, President and CEO of Ford Motor Company; Raul Pedraza, President of Magno International, LP; Ivan Seidenberg, Chairman and CEO of Verizon; Glenn Tilton, Chairman, President, and CEO of UAL Corp. and Chairman and CEO of United Airlines; James Turley, Chairman and CEO of Ernst & Young; and Patricia Woertz, Chairman of the Board, CEO, and President of Archer Daniels Midland Company.
The Council is advisory and its purpose is to provide Obama recommendations to continue progress toward meeting his goal of doubling the nation's exports in five years.
Sánchez Pushes Exports to Africa
Under Secretary of Commerce for International Trade Francisco Sánchez is promoting sub-Saharan Africa as an underappreciated market for U.S. exports. He has noted that exports there for the first five months of 2010 have increased 7% to $6.4 billion. Imports from sub-Saharan Africa to the U.S. increased 78% to $26.6 billion.
Sánchez's work to increase exports to sub-Saharan countries will focus on helping small- and medium-size U.S. companies. Equally, Sánchez has called on African nations to continue improving their business climates by strengthening their democracies, reducing trade barriers, and promoting commercial opportunities.
Resolving South Korean FTA Issues
President Obama has asked U.S. Trade Representative Ron Kirk to renew efforts to resolve issues standing in the way of a U.S.-Korea Free Trade Agreement. Obama would like the U.S.-Korea FTA completed by the time he visits South Korea in November for the G-20 meeting.
Principally at issue are increasing U.S. companies' access to the Korean auto market and urging Korea to abide by internationally accepted standards governing beef trade. The U.S. maintains that Korea has erected non-tariff barriers to auto imports and that Korea's demand for beef from cows under 30 months of age is unacceptably restrictive.
The Obama administration estimates that a successfully negotiated U.S.-Korea FTA could increase exports by more than $10 billion, which would create or save an estimated 70,000 jobs.
Ambassador Kirk is making efforts to renew talks with Korean trade minister Kim Jong-hoon. These talks promise to be difficult, as Kim has publicly vowed to resist any amendments to the FTA.
Additionally, Ambassador Kirk has made clear that resolving outstanding issues with the Colombian and Panamanian FTAs is critical to meeting Obama's goal to double exports over a five-year period.
Baucus: U.S. Trade Policy Must be Rooted in Fundamentals
The powerful chairman of the Senate Finance Committee, Max Baucus (D-Montana), has said that creating greater export opportunities will come if the U.S. returns to trade policy fundamentals.
First, he says that the U.S. must increase exports to create jobs. In 2009, the U.S. exported $1.5 trillion in goods and services, which supported 10 million jobs. Baucus laments that the U.S. - the world's largest economy - trails China and Germany in exports. The U.S., he says, must continue breaking down trade barriers and opening overseas markets, and Congress must appropriate more funds for export promotion, especially to benefit small- and medium-size businesses.
Second, Baucus says that U.S. trade policy must directly serve the nation's economic interests. Specifically, Baucus says, when dealing with other nations, our trade and economic policies must be on at least equal footing with diplomatic and other foreign policy interests. And he cites U.S.-China relations as a case in point.
Third, the U.S. must underscore the importance of international trade rules for access to markets - that is, everyone must abide by the same, widely accepted rules of the road, with Baucus citing Korea's uncommon barriers to beef trade as an example.
Last, Baucus says that strong enforcement of trade agreements is imperative to achieving greater U.S. trade policy successes. That means vigorously challenging what appear to be FTA violations before the World Trade Organization. Baucus has praised Ambassador Kirk and his team for recently pressing and winning WTO cases involving China's intellectual property violations.
L. Preston Bryant, Jr., is senior vice president at McGuireWoods Consulting LLC. He served as Virginia Secretary of Natural Resources in the cabinet of Gov. Timothy M. Kaine. He can be contacted at email@example.com or at 804.775.1923.