A Free-Market '5-Year Plan' to Boost U.S. Exports
Byline: Daniel Griswold, SPECIAL TO THE WASHINGTON TIMES
To promote jobs and economic growth, President Obama has launched an ambitious National Export Initiative. In his State of the Union address in January, the president committed his administration to double U.S. exports in the next five years to create 2 million well-paying jobs.
On April 15, the U.S. Commerce Department provided intellectual ammunition with a white paper titled, Exports Support American Jobs. The paper concluded that in 2008 exports supported 10.3 million jobs in the United States, including more than one out of every four manufacturing jobs. The paper touts exports as one way to bring down the high unemployment rate.
Promoting exports is one trade-policy goal that can win bipartisan support in Washington. Everybody loves exports, and with good reason. Selling abroad helps U.S. companies ramp up production, lower per-unit costs, and reach new and growing markets. But the Obama administration's goal of doubling exports by 2015 will be difficult to achieve and faces a few hurdles of the administration's own making.
To achieve the goal, exports will need to grow by 15 percent per year. That's an annual rate of growth that has been achieved in only one year in the past three decades (never mind five years running). The closest we've come to doubling exports over five years since the inflation-plagued 1970s was 1986-91, when exports of goods and services rose 85 percent, and the last five years of the George W. Bush presidency, 2003-08, when exports jumped 78 percent.
With inflation subdued, rapid growth of exports will depend primarily on robust growth abroad - something beyond the control of even this president. If the administration hopes to achieve its goal, it will need to embrace certain policies and reverse others. Here's an agenda to maximize U.S. export growth in the next half-decade:
One, persuade Congress to enact already negotiated trade agreements with South Korea, Colombia and Panama. All three agreements would reduce or eliminate significant barriers to U.S. exports. They would deliver the level playing field that members of Congress are always demanding. The U.S. International Trade Commission predicts the Colombia agreement would boost U.S. exports by $1.2 billion a year, and the Korean agreement by $10 billion.
Two, end the trade embargo against Cuba. When the ban was lifted on the sale of farm goods to Cuba in 2000, it quickly became one of our top customers in Latin America. …