By John Rigolizzo, Jr.: Berlin, New Jersey
As a New Jersey farmer, I remember and have been publicly supportive of President Obama’s export promise in 2010. And I’m not alone, joined by business owners and leaders, farmers, ranchers, manufacturers and retailers across the country.
"We need to export more of our goods," he said in his second-ever State of the Union address. "So tonight, we set a new goal: We will double our exports over the next five years."
As recently as 18 months ago, the president announced with pride that "we’re on track to meet that goal ahead of schedule."
Today, however, with the self-imposed deadline just a year and a half away; he doesn’t mention his export target anymore. It seems to have "vanished from White House talking points," observed Tom Raum of the Associated Press last week.
That’s because we’re going to fall far short of meeting President Obama’s objective.
Since 2010, exports have increased by only about one-third. Adjusted for inflation, they’ve been ever weaker, growing by just one-quarter. If they continue at the current clip of 3.3 percent annual growth, they’ll total only about $200 million per month in 2015, says Mark J. Perry of the American Enterprise Institute.
Instead of doubling, as President Obama pledged, exports will have risen by merely 40 percent.
We should never take growth for granted. Yet it’s also a disappointment.
What accounts for this missed goal? One important factor is outside the administration’s control: The global economy is stuck in a rut, which means that foreign customers aren’t buying American products as much as they might. Economic slowdowns around the world from China to Europe continue to hurt the U.S. export economy and there’s only so much a politician in the United States can do about it.
To complicate matters, we’re measuring exports in terms of dollars rather than by volume. Dollar value is important, but it’s also vulnerable to fluctuations in commodity markets and inflation. Volume is a better indicator of export health, and sadly we’re struggling in this area as well. On August 12, the World Agricultural Supply and Demand Estimates (WASDE) released their latest monthly report, stating that this year "corn exports are projected 25 million bushels lower with reduced domestic supplies and increased foreign competition." What does that mean: Lower volume and lower prices equals less trade and fewer dollars at home. That impacts all of us.
We can do better. The President’s goal to double exports is worth fighting for. Alfred Lord Tennyson once wrote that it’s better to have loved and lost than never to have loved at all. Likewise, it’s probably better to have come up short against an ambitious export objective than never to have stretched for it in the first place.
Yet President Obama’s dedication to the expansion of America’s export markets is an open question. His three great victories—congressional approval of free-trade agreements with Colombia, Panama, and South Korea two years ago—were the initiatives of his predecessor. The President deserves praise for seeing them through, but he’s now in his second term and his administration has yet to ink a free-trade pact with anyone. In many cases, the White House has seemed more interested in sparking small-scale trade wars with the likes of Canada, our most important trading partner, than breaking new ground.
The administrations trade diplomats are hoping to finalize the Trans-Pacific Partnership (TPP), an accord that one day could include Japan as a trading member. They’ve also just started trade negotiations with the EU, hoping to forge the Transatlantic Trade and Investment Partnership (TTIP). Success with either would go a long way toward meeting the goal to significantly increase exports and cement President Obama’s free-trade legacy.
Even with the best intentions however, the president won’t get far without Trade Promotion Authority (TPA). This important legislative trade tool will allow the White House to negotiate free-trade agreements and put them before Congress for an up-or-down vote. Since the 1970s, when TPA, also known as "fast track", was first used, every president has enjoyed this advantage for at least part of their presidency---except for President Obama.
Congress allowed TPA to lapse six years ago amid partisan wrangling and has yet to restore it, in part because the Obama administration hasn’t been aggressive enough in asking for it. Although there was some hope that Congress would approve TPA this summer, it’s now clear that nothing will happen until this fall at the earliest.
My apologies to the makers of alphabet soup, but without TPA there won’t ever be a TPP or a TTIP—and export growth will continue to let us down.
In the future, we’ll all be better off worrying less on promises and focusing more on results.
Are USDA revisions causing traders to become concerned??
BQA Because it the right thing to do