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Don't ease up on exports
We can predict some of the State of the Union themes President Obama will strike as he lays out a full and ambitious first year agenda for his second term. Cutting federal spending, renewing the economy, reforming immigration laws, and curbing gun violence would seem to be sure things for inclusion.
Yet, from his 2010 address, Obama has one piece of unfinished business he should not ignore: the pledge to double U.S. exports.
Obama should continue his commitment to boost the nation’s exports as a fuel for jobs and economic growth and partner with business, civic and government leaders in cities and metro areas to get the job done.
In every address since then, the president has laid out initiatives to advance that export goal — the launch of the National Export Initiative in 2010, the pending passage of free trade agreements in 2011, and the creation of a Trade Enforcement Unit to crack down on unfair trade practices in 2012. What will Obama put forward in 2013?
The president’s commitment to trade and exports has indeed been a bright spot for the administration. Exports drove nearly half of the growth in economic output post recession. The United States achieved a one-month high of $187 billion in exports in September 2012, and is expected to close the year with higher exports than last year’s record total of $2.1 trillion in sales.
Yet with the headwinds created by the global economic slowdown, crossing the goal line remains difficult. Yet that should not stop the president from doing what his national perch is intended to do: motivate the nation toward a positive aspiration. This coming year represents his last shot at a new initiative to push the nation toward greater global economic integration before the goal expires.
He should take it. But this time, rather than looking abroad, the president should challenge dozens of regions around the country to help him meet our national export goal.
A new Brookings paper argues that the president should establish a modest short-term regional export accelerator grant program to help public-private partnerships design and execute customized plans to boost exports. The National Export Initiative has already inspired five metro areas — Chicago, Los Angeles, Minneapolis-St. Paul, Portland (Ore.), and Syracuse-Central New York — to craft their own regional plans to double exports in five years, and at least another half dozen similar initiatives are in the works.
Why go to ground? Though the 100 largest metro areas drive the vast majority of the nation’s economy, 84 of them perform below the national average on exports. While middle-market firms in these regions are next-in-line behind multinationals to begin exporting, a recent Economist Intelligence Unit survey found that more than three-quarters of them do not intend to expand beyond the United States due to fear and lack of tailored market information.
Regional leaders are demonstrating that they can help reverse these trends by working firm-by-firm and community-by-community to orient our economy toward greater trade. They are pro-actively identifying new or under-exporting firms and slowly bringing them into the export pipeline. They are creating greater transparency and coordination to a fragmented set of federal, state, local, private, and nonprofit export assistance programs, helping firms export with more ease, predictability, and assurance. And leaders are building local awareness of the opportunities presented by greater global engagement.
On Tuesday, the president will outline his economic priorities. Exports, and the jobs they create, should be among them.
Liu is the co-director of the Brookings Institution Metropolitan Policy Program.
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