Too many U.S. policymakers, from Capitol Hill to the various executive branch agencies in Washington, tend to focus on foreign policies and foreign barriers when considering how best to improve the competitive prospects for U.S. firms. The presumption is that the major impediments to the success of U.S. firms are foreign born. Closed foreign markets, complex laws and regulations, overt flaunting of the trade rules, subtle protectionism, and unfair trade are the primary culprits that subvert the success of U.S. firms, discourage investment and hiring, and encourage offshoring of production.
Exports are increasingly important to the United States' economy and American companies for a variety of reasons. For example, Martin Feldstein, Harvard Professor and a member of the Wall Street Journal's board of contributors, says during the last year, the rise in U.S. exports contributed more than 50 percent of gross domestic product (GDP) growth. This is especially impactful as the United States struggles to achieve higher levels of growth and lower unemployment, and since American consumer spending, which traditionally has been the engine of growth during past recoveries, is not performing well.
Last year, over $1 million worth of goods crossed our northern border every minute of every day. And that doesn't include trade in services. As a result, Canada, with a population of 34.3 million, continues to be the United States' largest trading partner. What's more, Canada is the biggest merchandise export market for 34 American states, and the second biggest for another 11, the Canadian government says.
If you haven’t heard the news, the U.S. is “on track” to double its exports by 2014, just as President Obama promised to achieve with his National Export Initiative (NEI). Launched in his State of the Union address in January 2010, the NEI is the centerpiece of the president’s trade policy. His stated goal is to double U.S. exports of goods and services from $1.57 trillion 2009 to $3.14 trillion in 2014, creating an estimated 2 million well-paying jobs in the process.
The American transportation infrastructure—including ports, roads, rail and airports—is in poor shape. In fact, according to a bipartisan panel of experts and two former secretaries of transportation, Norman Mineta and Samuel Skinner, an additional $134 billion to $262 billion must be spent per year through 2035 to rebuild roads, rail systems and air transportation. And that estimate doesn’t include the costs to maintain and upgrade the nation’s ports.
As we enter 2011, the American public is not feeling good about the future. According to a 2010 year-end Rasmussen Reports survey, a provider of public opinion polling information, only 31 percent of respondents said the country was headed in the right direction. A second December survey indicated that Americans were less optimistic about 2011 than any previous year since the question was first asked seven years ago.
This is understandable. The U.S. economic recovery is not vibrant enough to support job growth necessary to dent unemployment, which hovers near 10 percent. Although the short term outlook is less than stellar, the future of America is.
International trade significantly contributes to American economic growth and well being. For example, in 2008 exports and imports generated nearly 30 percent of U.S. economic growth, up from 20 percent in 1990. Alone, exports contributed nearly 13 percent, measured by gross domestic product (GDP).
Although these figures dropped in 2009 due to the Great Recession and a decrease in world trade, the importance of global business has not diminished. In fact, according to a newly released Department of Commerce report, Exports Support American Jobs, exports supported over 10.3 million American jobs in 2008 and more than one in four manufacturing jobs.
American exports have traditionally played a vital role in U.S. economic expansion. Now, they have become even more important since job growth is key to a sustained economic recovery. Local and state governments, as well as local trade organizations such as World Trade Centers and chambers of commerce, can play a more integral role in helping small and medium enterprises (SMEs) increase exports.
In order to more quickly mitigate the effects of the current economic crisis, achieve favorable levels of growth and seize the benefits presented by global trade, it is imperative for companies to expand internationally. But to do so, it’s essential that elected officials do not craft protectionist policies, but instead pass trade liberalizing legislation that further opens foreign markets.
America’s economy is in the vanguard of one of the most significant advances in the world’s economic history. Economic globalization is integrating national markets through international trade and investment.
We are witnessing unparalleled developments in microelectronics, computers, telecommunications, transportation logistics, and finance. Combined with new global realities, these developments are changing the way we live and work.
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