Obama Sets Ambitious Export Goal

In promising Wednesday night to double the United States’ export growth over the next five years, President Obama set an ambitious goal for American trade policy that, he said, could create two million jobs.


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.

And, while he is at it, forget about strengthening the dollar in the foreseeable future.

Since the Obama administration has not yet clearly articulated a trade policy or even sent several completed trade agreements to Congress, his pledge to double exports in five years was greeted with incredulity, even among Democratic trade policy experts.

“It’s like someone dropped a paragraph from a Bush or a Clinton speech, given the low profile the administration has accorded trade so far,” said David Rothkopf, a former Commerce Department official with the Clinton administration.

Leslie H. Gelb, president emeritus of the Council on Foreign Relations, added: “How will he perform this miracle? It really is a mystery.”

So far, administration officials have not laid out how they plan to double American exports to $2 trillion in 2015, from $1 trillion today. Mr. Obama said he was starting a National Export Initiative that will “help farmers and small businesses increase their exports,” but did not elaborate.

White House officials, when pressed, said only that the commerce secretary, Gary F. Locke, would give a speech on the matter next week.

Separately, on Thursday, Mr. Locke announced that, as part of a plan to reduce export burdens on American companies, the United States might remove restrictions on exports of goods with potential military applications when such technologies were available worldwide.

“We have too many controls on items readily available around the world,” Mr. Locke told the United States-China Business Council.

Export control rules are meant to keep dual-use technologies like computer encryption software and airplane parts out of the hands of American foes that could use them for military purposes.

A White House spokeswoman, Jennifer R. Psaki, said on Thursday that the White House had been working for several months on a policy to increase exports. She said the plans included the creation of an export promotion cabinet and steps to help small and medium-size businesses tap markets in other countries.

US President Barack Obama delivers his first State of the Union address
MANDEL NGAN | AFP | Getty Images
US President Barack Obama delivers his first State of the Union address

In the last months, two of Mr. Obama’s top aides, Lawrence H. Summers, the White House economics adviser, and Michael Froman, the deputy national security adviser for international economic affairs, have reached out to trade experts at Washington-based policy organizations to ask them for advice on increasing export growth.

Gary C. Hufbauer, a senior fellow at the Peterson Institute for International Economics, said many economists believed that, to increase exports, one of the first things that Mr. Obama needed to do was to stop slamming big American companies that invested overseas.

“The fact of the matter is these are the firms that account for two-thirds of American exports,” Mr. Hufbauer said. “Their investments abroad are intimately related to their exports. The notion that you can punish U.S. firms for investing abroad and still see exports rise is bunk.”

But Wednesday night in his State of the Union address, Mr. Obama took another whack at those businesses, saying, “It’s time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America.”

Mr. Obama does receive some credit from free-trade proponents for resisting, so far, the temptation to ignite a trade war or enact a lot of protectionist policies, often the first move of presidents during an economic downturn. While the administration imposed punitive tariffs last year against Chinese tires and steel pipes, Mr. Obama has not taken tougher steps — like trade sanctions — against imports from China or India.

And on Wednesday he reiterated his pledge to push through stalled trade agreements with Korea, Panama and Colombia, which would open the markets of those countries to American goods. But that would ignite a fight from Democrats from big manufacturing states who say the agreements would usher in a flood of imports at the expense of American jobs. Fearing that reaction, White House officials have yet to move forward on seeking Congressional approval of the trade deals.

In developing trade policy, Mr. Obama faces the same challenges at home as he does abroad: his most important allies are also his biggest rivals or adversaries. Most economists say they believe that the only way for Mr. Obama to achieve his ambitious export goals is to export more to China, India and other big emerging markets.

But those were the very same countries that Mr. Obama cited Wednesday night as America’s principal competition in many areas, including developing green energy and producing educated workers.

“China’s not waiting to revamp its economy,” he said, knocking down a rhetorical straw man he had just set up about how “Washington has been telling us to wait for decades, even as the problems have grown worse.”

At home, Mr. Obama will need the support of his own party to get trade deals passed. Yet, Mr. Rothkopf, the former Clinton administration official, said, “His own party is also the home of the most virulent opposition to such deals.”