US Counts on Rising Trade Bush Administration Sees Rebounding Export Business as Key to Ending Recession

By Amy Kaslow, Writer of the Christian Science Monitor | The Christian Science Monitor, May 3, 1991 | Go to article overview

US Counts on Rising Trade Bush Administration Sees Rebounding Export Business as Key to Ending Recession


Amy Kaslow, Writer of the Christian Science Monitor, The Christian Science Monitor


WHEN the Bush administration declared the past week World Trade Week, it underscored a policy that counts on increased export earnings as the way to combat recession in the United States.

"Growth in the US economy is dominated by exports," asserts Export-Import Bank chairman John Macomber, whose federal institution spends roughly $7 billion annually to finance American exports abroad. Mr. Macomber joins White House economists in their forecast that a domestic economic rebound is imminent. Exports, he says, could account for some 80 percent of future US economic growth.

Macomber says he's busy traveling domestically to inform small- and medium-sized firms about overseas markets, and just how to reach them. "US exporters are experiencing an extraordinary sea-change. The dollar is well-priced (a low dollar makes US goods abroad cheaper) and the quality of US goods is dramatically better. Exporters are more conscious of export markets and better poised to take advantage of them."

Kent Hughes, president of the Washington-based Council on Competitiveness, says he's "less sanguine about the US export performance." There is no question that manufacturing productivity improved dramatically in the 1980s, he says, and that "a quality revolution is in the making." But as the dollar begins to appreciate, the costs of American goods abroad rise, cutting into US competitiveness.

"As we bounce back from recession, there will be an increased demand for imports," Mr. Hughes adds.

US Secretary of Commerce Robert Mosbacher says he is encouraged by recent trade statistics. February's drop in the nation's trade deficit to $5.3 billion - from January's $7.2 billion - is part of a longer-term improved export performance, he says.

But a senior US Treasury Department official counters that slackened demand at home, slowed by recession and coupled with lower oil-import bills, accounts for the sharp decline. "Eighty percent export-driven growth doesn't necessarily measure heightened export levels; what it does mean is a failure of other parts of the economy to grow, such as investment and consumption," the official says.

The US exports 7 percent of its gross national product. Britain, Canada, Germany, and Japan export roughly 19 percent of their respective GNPs.

"We're the only industrial nation, until recently, that was not export driven," says Macomber. "Our real leverage is with the medium-sized companies, especially in the machinery sector.... Those exports could increase by as much as 10 percent this year."

Macomber sees the East European marketplace as a strong prospect for US exporters. …

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