Obama's export goals face hurdles here and abroad

[July 08, 2010]  WASHINGTON (AP) -- Moving trade to a front burner, President Barack Obama claimed Wednesday that the U.S. was on track to meet his goal of doubling exports in the next five years.

While many economists and business leaders see that target as overly ambitious, the president has been increasingly linking his trade push with job creation -- and trying to blunt a brewing business revolt against his policies ahead of midterm elections.

"Export growth leads to job growth and economic growth," Obama said as he named 18 business, labor and government leaders to a new export advisory council. "At a time when jobs are in short supply, building exports is an imperative," Obama said.

Obama said the nation's sales abroad grew by 17 percent in the first four months of this year, declaring: "Our efforts are off to a solid start."

Yet while the Commerce Department said exports of goods and services from January through April were up 16.9 percent, imports rose even more -- up by 19.6 percent over the period.

The early 2010 surges in both exports and imports reflected a rebound in global trade from its deep swoon in 2008 and early 2009 at the depth of the global economic downturn.

But the manufacturing gains and inventory restocking that drove the early stages of the recovery have begun to fade.

Weighing on the global economic recovery are the European debt crisis and lower growth and labor strife in China. Also, recent weak reports on consumer spending, service sector activity and the still-rocky housing market have added to recovery doubts.

With shell-shocked consumers unlikely to power the economic recovery by returning to their free-spending ways, White House officials are counting on trade and business investment to contribute a larger role.

But Obama's goal of doubling exports by 2015 "is challenging. It's going to require a very broad set of initiatives," said Pat Mears, director of international commercial affairs at the National Association of Manufacturers. The group strongly supports Obama's export goals.

The president's showcasing of his newly energized trade agenda appeared aimed, in part, at quieting increasing vocal criticism from the business community of his decisions on taxes, trade and financial regulation.

In one of the sharpest rebukes yet from corporate America, Ivan Seidenberg, chief executive of Verizon Communications Inc. and head of the influential Business Roundtable, late last month blasted the administration for decisions he said "create an increasingly hostile environment for investment and job creation."

Seidenberg was among those named by Obama on Wednesday to the new advisory panel, which also includes executives of Walt Disney Co., Ford Motor Co. and the Boeing Co.

Obama has drawn criticism from business groups and free-traders on Capitol Hill for not doing more to promote trade, allowing to languish free trade agreements with Colombia, Panama and South Korea signed during the George W. Bush administration.

But in a surprise move, the president suddenly revived the South Korean pact at a global summit in Toronto, saying he hoped to have most outstanding issues resolved before he visits Seoul in November.

On Wednesday, Obama also said, "we want to deepen and broaden our relations with Panama and Columbia" although without specifically mentioning the pending free-trade agreements.

White House spokesman Robert Gibbs later said that, unlike with South Korea, "I don't have any timeline" for Columbia and Panama.

Nearly all free-trade proposals are unpopular with Democrats, with protectionist sentiments running high at a time of lingering economic weakness and unemployment hovering at 9.5 percent.

If Obama is to push his revamped trade agenda, he'll need to reach across the aisle to pick up Republican support, as then-President Bill Clinton did in 1993 when he pushed through Congress the still-controversial U.S. free-trade agreement with Canada and Mexico.

Another obstacle to meeting Obama's goal, which he made in his State of the Union speech: the shift by many U.S. companies toward producing their goods overseas. Also, it faces a mathematical hurdle.

The United States isn't the only major power hoping to grow its way out of recession through increased sales abroad.

"Every country in the world would like to achieve export-led growth. But it's not possible. If somebody's exports are growing faster than world trade, then somebody else's imports have to be growing faster," said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm.

Still, Gault said, "his objective is right" because the housing sector and domestic consumer spending are not going to fuel the recovery. "You need some demand strength from somewhere else."

[Associated Press; By TOM RAUM]

Associated Press writers Martin Crutsinger and Jennifer Loven contributed to this report.

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