Obama export goals doable, job creation tougher

[February 01, 2010]  WASHINGTON (AP) -- President Barack Obama says he wants to double exports over the next five years, supporting 2 million American jobs. The doubling is doable; the job increase is debatable.

"The more products we make and sell to other countries, the more jobs we support right here in America," Obama said in one of the few instances of his State of the Union address last week where he received hearty applause from Republicans.

Obama outlined several paths to expanding exports: his administration is launching a national export initiative to help farmers and small businesses who want to sell their goods abroad; it is working to reform export control laws that stifle sales of technology that might have military uses; and it is pushing both international and bilateral free trade agreements.

Business groups and pro-trade Republicans are waiting to see if Obama translates his words into actions, but achieving a doubling of exports, assuming some consistency in the global economy and currency exchange rates, is certainly possible.

Exports of goods and services nearly doubled in the 1990s, and nearly doubled again more recently, going from about $1 trillion in 2003 to more than $1.8 trillion in 2008, according to the Census Bureau Foreign Trade Division.

Whether a new surge in exports will translate into more jobs for Americans is a more complicated question. The U.S. Chamber of Commerce estimates that finalizing a free trade agreement with South Korea alone would lead to 200,000 American jobs.

And a report by the Milken Institute sponsored by the National Association of Manufacturers concludes that increased exports from modernizing export control law could boost the GDP by $64 billion by 2019, creating 160,000 manufacturing jobs.

But Lori Wallach, director of Public Citizen's Global Trade Watch, said potential jobs from more exports are negated by job losses resulting from increased reliance on products purchased from abroad. In the same 2003-2008 period when exports increased to $1.8 trillion, imports grew from $1.5 trillion to $2.5 trillion.

"Unless they figure out how to limit import growth, all they do with 2 million jobs is have less net job loss from trade," she said.

Obama called for strengthened trade relations with South Korea, Colombia and Panama.

But since becoming the majority party in Congress three years ago, his fellow Democrats, backed by their union supporters, have refused to act on separate bilateral trade agreements signed by the Bush administration with the three countries. They insist that human rights concerns in Colombia and South Korean restrictions on U.S. autos must be dealt with first.

Obama returned to the topic last Friday in a discussion with House Republicans in Baltimore, acknowledging that there are "fissures" in both parties about the benefits of expanded trade.

"My hope is that we can move forward with some of these trade agreements having built some confidence ... among the American people that trade is going to be reciprocal, that it is not going to just be a one-way street," he said.

Prospects are probably better for lifting some national security-based controls on U.S. exports.

House Foreign Affairs Committee Chairman Howard Berman, D-Calif., last week played host to several top administration officials, including National Security Adviser Jim Jones, Defense Secretary Robert Gates and Commerce Secretary Gary Locke, to discuss how to overhaul export control law that hasn't been updated since 1979.

"The earth has moved beneath our feet" since the last overhaul, said John Murphy, vice president for international affairs at the U.S. Chamber of Commerce.

The United States still requires licenses on technologies and products that might have some military application that are widely available on global markets from foreign competitors, Murphy said. "It's doing nothing to keep technologies out of the hands of others."

Berman said bipartisan legislation will be ready by early spring for his committee to consider. Current regulations now fill more than 2,000 pages, he said at an earlier hearing at Stanford University. "You practically have to have a Ph.D., or a law degree, or maybe both, in order not to run afoul of the increasingly complex U.S. export controls regime."

[Associated Press; By JIM ABRAMS]

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