A recent government initiative to double U.S. exports by 2015 is starting to show positive results and seems on track to meet long-term trade goals. Will it be enough to jump-start new markets and jobs growth?

In March, President Obama signed an executive order to create a new policy aimed at bolstering United States competitiveness abroad by promoting a single, comprehensive strategy to promote American exports. The National Export Initiative (NEI), the goal of which is to double U.S. exports within the next five years and combat still-high unemployment, has already begun to show signs of success, new data indicate.

According to a progress report issued by the White House last week, NEI policies coupled with the global economic rebound resulted in a 17 percent increase in U.S. exports in the first four months of 2010 compared with the same period last year. This gain puts the U.S. on track to reach the intended goal of doubling exports and improving the employment market within five years.

The report also found that over the past nine months, the increase in exports contributed more than one percentage point to overall U.S. economic growth, equivalent to the contribution from domestic consumption during the economic recovery.

Since inception, the NEI recorded progress in all five of its key policy measures:

• Improved advocacy for U.S. exporters — The Dept. of Commerce has coordinated 18 trade missions across 24 countries, creating contract opportunities worth $11.4 billion for U.S. companies.
• Increased access to export financing — The government’s Export-Import Bank has more than doubled its lending to American exporters since last year, reaching a total of $13.2 billion, while small business lending has risen from $1.7 billion to $2.3 billion.
• Fewer barriers to trade — Trade representatives have reopened Chinese and Russian markets to U.S. food exports worth $1 billion.
• Trade rules enforcement — The U.S. is “using all of its enforcement tools to level the playing field for U.S. exporters,” such as in the recent World Trade Organization ruling supporting U.S. aerospace workers from European government-subsidized Airbus construction.
• International promotion of strong, sustainable and balanced economic growth — The past 18 months have seen strong cooperation between the U.S. and foreign governments in building stable trade growth.

“Ninety-five percent of the world’s customers and fastest growing markets are beyond our borders,” Obama said in a speech last week. “So if we want to find new growth streams, if we want to find new markets and new opportunity, we’ve got to compete for those new customers — because other nations are competing for those new customers.”

The successes so far in boosting export rates and profitability have led policymakers to focus more on the NEI’s potential to create new jobs and stabilize the employment market. According to the report, exports are tied to 36 percent of all manufacturing jobs and support 2.8 million jobs in the services sector, so export-growth is likely to generate millions of new jobs in the coming months.

As the White House increases its efforts to strengthen the NEI, will the strategy provide the long-term economic gains promised?

Thea Lee, deputy chief of staff for the AFL-CIO, told the Wall Street Journal last week that the export council is not balanced enough.

“If what you’re doing is promoting exports but imports are growing faster, you’re not succeeding on bringing down the unemployment rate,” Lee said, adding, “We are all looking for creative ways on job creation without spending federal money, but passing more trade agreements that are not guaranteed to achieve that is not the answer.”

“The new approach [...] reflects a recognition by the administration that it can no longer sell government stimulus as an antidote to the nation’s 9.5 percent jobless rate,” the Journal said.

Deficit concerns have caused a shift away from spending as a solution to continuing economic challenges, with the administration pursuing a new initiative to encourage larger corporations to unfreeze an estimated $2 trillion held as a reserve due to economic uncertainty. The White House is also establishing the President’s Export Council, an export-promotion group including business leaders from manufacturing and construction, to further boost the employment gains made through export growth.

However, “White House hopes for strong economic and job growth ahead of critical mid-term elections in November, were dampened last week by a Labor Department report [that] showed a net loss of 125,000 jobs last month,” Agence France-Presse reports. “Though the unemployment rate actually fell — to 9.5 percent, its lowest mark in a year — the figures fuelled pessimism on the markets about the economy, and bolstered the case that the recovery was slowing.”

Earlier

White House Launches Export-Redoubling Strategy

Resources

Commerce Secretary Gary Locke Unveils Details of the National Export Initiative
The White House, Feb. 4, 2010

Progress Report on the National Export Initiative
The White House, July 7, 2010

Remarks by the President Announcing the President’s Export Council
The White House, July 7, 2010

Obama Shifts to Exports-Led Jobs Push
by Elizabeth Williamson
The Wall Street Journal, July 7, 2010

White House Touts U.S. Export Success
by Stephen Collinson
Agence France-Presse, July 7, 2010