As unemployment hovers stubbornly around 9 percent and Congress continues to debate the best way to create American jobs, policymakers should take a hard look at one extremely effective way to stimulate U.S. job growth — fully implementing President Barack Obama’s National Export Initiative, a plan to double U.S. exports in the next five years and create 2 million American jobs.
[IMGCAP(1)]On June 19, the Chinese government announced it would move the yuan off the U.S. dollar peg, and, as to be expected, many people on Capitol Hill are unsatisfied with the size or speed in which their undefined demand for a stronger yuan has been met.
The American Chamber of Commerce in Shanghai supports a market-based currency in China. However, a yuan appreciation will do little to enhance America’s net competitiveness versus our competition — the European Union, Japan, Korea, Canada and others — in the world’s fastest-growing market.
For every $1 billion in exports, 6,250 manufacturing jobs are created in the United States. Yet for years, the U.S. has been punching below its weight when it comes to exports. The NEI remains one tangible action that the U.S. can take to boost exports and create American jobs.
America’s first-ever government-wide strategy for promoting exports, the NEI is a critical step toward developing a bold, ambitious trade policy and, for the first time, an export infrastructure that will drive sustained economic growth and job creation in the U.S. for decades to come.
Those of us who work every day to sell American goods, services and commodities abroad see the NEI as a critical opportunity to get the U.S. back into the game in the increasingly competitive global export market.
American companies produce the best products, employ the best workers and are the most innovative in the world. China is the perfect example of a market that, despite its challenges, offers opportunities that the U.S. must develop in order to advance its export economy. In fact, our exports to China more than doubled between 2004 and 2008, and since 2000, American exports have jumped more than 330 percent.
However, American companies are facing stiff competition in China from companies supported by well-established trade promotion programs backed by their home governments. While our growth in exports to China is impressive, our biggest competitors in China are outperforming us and limiting America’s ability to take full advantage of China as a destination for American exports.
Why is this happening? To start, our competitors’ long-standing commitment to trade advocacy begins at the highest levels of government. For example, German Chancellor Angela Merkel regularly travels with a full delegation of German CEOs who pitch German goods and commodities to top leaders in government and business.
Simply put, more aggressive U.S. trade advocacy is essential to compete. The NEI would enhance U.S. trade advocacy by requiring focused attention from the president and relevant cabinet-level agencies on aggressively expanding exports. A good first step was the Obama administration’s first Cabinet-level trade mission in May. Focused on clean energy technology, the American Chamber of Commerce in Shanghai was pleased to host Commerce Secretary Gary Locke in Shanghai as he led a delegation of more than 25 American companies that also stopped in Hong Kong, Beijing, and Jakarta, Indonesia.
Another key component of the NEI is to make the U.S. export control regime more agile, transparent, predictable and efficient — a weak spot that America’s competitors have been all too happy to take advantage of. Up to now, many sales that U.S. firms should rightfully win are lost and potential buyers driven away because of an outdated export control system. According to a 2010 Milken Institute-National Association of Manufacturers study, modernizing export controls on commercially available technology could result in annual gains of $64 billion in real gross domestic product by 2019.
The NEI would also boost export financing by improving access to credit markets using the Export-Import Bank and help ensure that American exporters have the same access to export financing as their competition, even when private financing is unavailable. This is critically important to the smaller exporters that make up a majority of America’s exporters. Today, Canada, with an economy less than one-tenth the size of the U.S. economy, spends almost four times the U.S. on export financing to support Canadian companies.
As Congress begins to determine funding priorities for the next fiscal year, members of American Chambers of Commerce all across China are reaching out in unison to show our support for funding the full federal investment requested by the Obama administration for the NEI for fiscal 2011 and beyond. I look forward to personally carrying that message to Washington, D.C., as part of a senior delegation later this summer.
On behalf of the more than 4,000 companies represented by American Chambers in China, I urge Congress to fully implement the National Export Initiative.
Robert Roche serves as chairman of the Board of Governors for the American Chamber of Commerce in Shanghai.