President Obama raised eyebrows during the State of the Union address by vowing to double U.S. exports over the next five years. That's a hefty promise--total U.S. exports in 2009 are estimated at about
$1.5 trillion. Some pundits shrugged off the initial claim as
politically expedient hyperbole, but the White House is appears to be taking the notion seriously. On Thursday,
Obama and Commerce Secretary Gary Locke unveil plans for how they intend to double exports, which they say will be a major force in job creation. Can they really do it?
- The 3-Part Plan Reuters reports Commerce Secretary Gary Locke's "three-pronged" plan: "[R]obust government advocacy for U.S. exporters in markets around the world, increased export financing and tough enforcement of trade agreements the United States has already signed to open foreign markets." Reuters adds, "Obama also is creating an Export Promotion Cabinet that includes top officials from [several departments]. Each of those agencies will be charged with developing a detailed plan over the next six months for boosting exports."
- The Big Challenges The New York Times's Helene Cooper shakes her head. "The trouble, trade experts say, is that meeting that goal would require the president to engage in a fight to the death with the liberal wing of his own party, persuade China to allow its currency to appreciate 40 percent, get global economic growth to outperform the salad days from 2003 to 2007, and lower taxes for American companies that do business abroad."
- Plan Is 'Doable' So appraises the A.P.'s Jim Abrams. "Exports of goods and services nearly doubled in the 1990s, and nearly doubled again more recently, going from about $1 trillion in 2003 to more than $1.8 trillion in 2008, according to the Census Bureau Foreign Trade Division," he writes. "The U.S. Chamber of Commerce estimates that finalizing a free trade agreement with South Korea alone would lead to 200,000 American jobs."
- Plan Is 'Bold and Unrealistic' So appraises Cato's Daniel Griswold. "U.S. exports have not doubled in dollar terms during a five-year period since the inflation-plagued 1970s, not exactly a golden era for the U.S. economy. In real terms, according to the U.S. Bureau of Economic Analysis, exports have not come close to doubling during any five-year stretch in the past 40 years."
- Avoid the Enforcement Canard Cato's Daniel Ikenson warns against over-enforcing trade agreements. "One of the more persistent myths about trade is that we don't adequately enforce our trade agreements, which has given our trade partners license to cheat." He says enforcement is not really a problem. "[I]mport growth is much more closely correlated with export growth than is heightened enforcement."
- Not Very Likely The Atlantic's James Fallows annotated the State of the Union address. Of Obama's promise to double exports, Fallows signs, "Not to be a downer, but: this sounds more like a 'goal' than a 'likely prospect.'"