President Obama moved Thursday to create a high-level team to promote US exports, with the goal of creating 2 million jobs within the next five years.
The project will span from efforts to reduce hurdles for companies in shipping goods overseas, to adjusting trade policy with a blend of carrots (a push for new free-trade agreements) and sticks (tougher enforcement of trade rules). The near-term goal is to double US exports within five years.
"For the first time, the United States of America is launching a single, comprehensive strategy to promote American exports," Mr. Obama told the annual conference of the Export-Import Bank, an institution in Washington designed to promote US trade.
Getting that many more jobs from exports won't be easy, but new efforts on trade are very much needed, economists say. The most obvious reason is that America needs more jobs, at a time when consumer demand at home remains tepid. A second reason is that the world economy continues to become more competitive, which means that the US can't rest on its laurels as the world’s leading exporter of goods and services.
"Ninety-five percent of the world’s customers and the world’s fastest-growing markets are outside our borders. We need to compete for those customers. Because other nations are," Obama said. "We need to up our game."
Obama outlined a multipart "national export initiative":
• He signed an executive order "instructing the federal government to use every available federal resource" to boost exports. The order created an "export promotion cabinet," made up of the secretaries of State, Treasury, Agriculture, Commerce, and Labor, plus the US trade representative and other officials.
• Multiple cabinet departments will help create a "one-stop shop" for small employers that want help identifying opportunities and setting up operations overseas. The effort would include embassies and consulates abroad, as well as agencies like the Departments of Agriculture and Commerce.
• Obama pledged to promote new free-trade agreements while also enforcing laws on the books, such as intellectual-property rights. "China moving to a more market-oriented exchange rate would make an essential contribution" to a more-balanced global economy, he said. That move could also help narrow the large gap by which US imports exceed exports.
• The administration will increase access to trade financing. Obama commended efforts by the Export-Import Bank over the past year to step up its activities when US credit markets were impaired.
In addition, Obama pledged to be a kind of salesman in chief for US companies, with him and his cabinet members plugging the virtues of "made in America" when they travel overseas. Next week, the president will take his export evangelism to Indonesia and Australia.
The announcement about export strategy came as a government report showed a narrower-than-expected trade deficit for the US in January. Imports exceeded exports by $37.3 billion, with the volume of oil and automobile imports falling for the month.
Obama first announced the goal of doubling exports within five years during his State of the Union address to Congress in January.
Some economists, running the numbers, have said it's a difficult objective to reach.
"During the last 25 years nominal exports never grew this quickly in five years; it took an average of 11 years for exports to double," economist Sven Jari Stehn wrote in an analysis for Goldman Sachs.
"If global real GDP grew by an above-consensus 4.5 percent during the next five years, the dollar would still need to depreciate by about 30 percent, slightly more than the largest 5-year real depreciation on record during the last 25 years," Mr. Stehn concluded.
This doesn't mean that Obama's target is unreachable, however. And efforts to boost exports and achieve a more-balanced global economy could bring benefits even if his goal isn't reached.