United States Must “Lead Internationally” in Trade
In releasing the 2007 National Export Strategy, Secretary of Commerce Carlos M. Gutierrez urges bipartisan consensus on trade policy.
by John Ward
Secretary of Commerce Carlos M. Gutierrez spoke before a gathering of the Washington International Trade Association in Washington, D.C., on July 17, 2007, at the release of the 13th edition of the National Export Strategy. In his remarks, Gutierrez noted the importance of trade to U.S. economic well-being and the historical leadership role of the United States in lowering global barriers to trade. He also made a strong pitch for continued efforts to expand the use of free trade agreements (FTAs) as a tool for growing U.S. exports.
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| Secretary of Commerce Carlos M. Gutierrez (left) and House Ways and Means Committee Chairman Charles B. Rangel (right) at a meeting of the Washington International Trade Association in Washington, D.C., on July 17, 2007, at which the 2007 National Export Strategy was released.
“Since the end of World War II, the United States has led the global effort to dismantle trade barriers and advance worldwide prosperity,” said Gutierrez. “The worldwide economy has since experienced unprecedented growth.” He also underlined the importance of continuing bipartisan consensus on international trade. “This is not a time to retreat or to pull back. History shows that our country is at its best when we lead internationally, not when we adopt protectionist policies [that] convey a lack of confidence.”
Gutierrez is the chair of the Trade Promotion Coordinating Committee (TPCC), the federal interagency body that is charged with issuing National Export Strategy.
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U.S. Free Trade Agreement Partners in the Global Economy
FTA = free trade agreement
GDP = gross domestic product
Source: 2007 National Export Strategy
According to the new report, “Americans should be confident of their ability to compete in the global marketplace.” U.S. exports in 2006 of goods and services grew by 13 percent over 2005 exports, to $1.4 trillion. Exports to all regions showed “significant” growth, posting double-digit increases in key markets, including Brazil, the European Union, India, Malaysia, Mexico, Singapore, and South Korea. The global economy is forecast to continue enjoying one of its longest periods of growth in decades.
U.S. industry continues to rank at the top of most measures of global competitiveness. The United States also remains the world’s leading exporter of services by a wide margin, running a sizable surplus in that sector. In 2006, U.S. exports of services were $414.1 billion, up $33.5 billion from 2005.
“The challenge we face is raising awareness on Main Street USA of exporting opportunities and the resources available.”
— Secretary of Commerce Carlos M. Gutierrez
Trade Liberalization a Driver
A significant driver of U.S. export growth has been the liberalization of international trade. Multilateral trade negotiations, such as the successive trade rounds under the World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, have brought about significant reductions in tariffs, with a concomitant growth in trade.
An effective tool for expanding U.S. trade prospects has been the implementation of FTAs with key trading partners. The benefits of those FTAs are borne out by the data. In 2006, the United States had FTAs with 13 countries. While those FTAs accounted for just 7.3 percent of world gross domestic product, they accounted for 42.1 percent of U.S. exports. “The growth rate of U.S. exports in seven of ten countries with FTAs [implementated between 2001 and 2006] outpaced the growth of U.S. exports to the world,” noted the report.
E-Commerce, Partnerships Aid Small and Medium-Sized Enterprises
A continuing challenge for U.S. exporting has been the underrepresentation of small and medium-sized enterprises (SMEs) among the population of exporting companies. The 2006 National Export Strategy made note of that stubborn trend, which dates to the 1990s. “The challenge we face is raising awareness on Main Street USA of exporting opportunities and the resources available,” pointed out Gutierrez.
Recent developments in e-commerce and the expanded use of public- and private-sector partners by the U.S. government may soon reverse the situation by making exporting simpler for SMEs.
The report devotes a chapter to presenting steps that SMEs can take, and the government tools they can use, to explore the potential of e-commerce for exporting to the world’s 1 billion Internet users. It also lays out an action plan for taking “strategic partnerships” a step further on every front to broaden awareness of, and participation in, the global marketplace by U.S. businesses. The federal government, says the report, will work more closely with state and local governments, trade associations, and U.S. corporations and banks that provide export-related services.
Shift to Emerging Markets
The report notes that there has been a noticeable shift in global import consumption. Since 1988, developed countries’ share of global imports has declined by 11 percent, while developing countries’ share grew by the same amount. “Future U.S. export growth potential will depend on the extent to which … U.S. businesses, particularly small and medium-sized enterprises, become aware of these trends and respond.”
Part of the U.S. government’s response to that trend, as described in the report, is contained in the Commerce Department’s “Transformational Commercial Diplomacy” proposal, which is patterned on the State Department’s Transformational Diplomacy initiative. Under the proposal, a number of small offices of the U.S. and Foreign Commercial Service in well-developed overseas markets with limited commercial potential would be closed. The resources would then be reallocated to new emerging markets or established markets with greater commercial potential, such as China and India.
Hard Work Ahead
The multiple strategies for promoting U.S. exports to new and untapped markets that are outlined in the 2007 National Export Strategy will all require the continued attention of the agencies charged with implementing them. “Although America is the largest exporter in the world, we can do more, and we must do so by engaging with growing opportunity markets,” said Gutierrez on July 17.
John Ward is a writer in the International Trade Administration’s Office of Public Affairs.
For More Information
The National Export Strategy has been issued annually since 1993. It is compiled by the TPCC, an interagency task force that comprises 20 federal agencies and was created by the Export Enhancement Act of 1992. The TPCC is responsible for harmonizing the export promotion and financing programs of the U.S. government, as well as developing a comprehensive plan for implementing strategic priorities. The secretary of commerce chairs the committee. Copies of the 2007 National Export Strategy are available for downloading from the Web.