Can Obama generate 2 million jobs from exports? It won't be easy.
President Obama's State of the Union speech proposed a National Export Initiative to generate 2 million jobs from doubling exports over the next five years.
With his goal of creating 2 million jobs from exports, President Obama has laid out a tantalizing but difficult objective for America.Skip to next paragraph
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In his State of the Union address Wednesday, the president identified a major potential source of much-needed jobs: Trade with the rest of the world. But as anyone familiar with a "Made in China" label knows, turning that potential into reality may not be easy.
"Tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America," Mr. Obama said to congressional applause. "To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security."
With US consumers and businesses struggling, many economists say that improving US trade performance is vital. But some also say Obama's goal is unrealistic.
Mr. Morici says it's that overall trade balance – exports minus imports – that counts when considering the degree to which trade can help make up for 7 million jobs lost in the recession.
Some good news: Prior to the recession, American exports were growing solidly, and creating well-paying farm and factory jobs. And the nation's trade deficit has been shrinking for three years, partly due to a retrenchment in consumer imports but also due to those export gains.
The US trade deficit is now running at about $400 billion, annualized, versus more than $700 billion at its peak in 2008.
As the global economy emerges from recession, however, a sizable US trade deficit may persist. And as long as imports outweigh exports, the economy may still be losing jobs from trade, on balance.
America's exports currently total about $1.57 trillion, using annualized numbers from the third quarter of 2009, according to the US Department of Commerce. It would require growth of about 14 percent a year to double that amount. That's a bit faster than the inflation-adjusted pace seen before the recession, when a weakening dollar helped spur export growth.