President Obama’s Secretary of Commerce, Gary Locke, rolled out the administration’s new “National Export Initiative (NEI)” today at the National Press Club. The way Secretary Locke described it, the NEI sounds like a great vehicle to create jobs—government jobs.
Secretary Locke began by saying that the “NEI represents the first time the United States will have a government-wide export-promotion strategy with focused attention from the president and his Cabinet,” ignoring the prior administration’s success in negotiating free trade agreements with more than a dozen countries between 2001 and 2009. NEI’s main features are:
- more “robust” efforts to help small- and medium-sized enterprises, through the Foreign Commercial Service (FCS) “Gold Key” program (Sec. Locke made it sound like something brand new—actually “Gold Key” has been around for more than 20 years).
-President Obama’s “Export Cabinet” wants to hire more U.S. Government (USG) bureaucrats “to advocate for U.S. business” and channel more taxpayer dollars into “export promotion activities” at the U.S. Departments of Commerce and Agriculture.
-“improved access to credit” through increasing U.S. Export-Import Bank lending to small- and medium-size businesses from $4 billion to $6 billion through FY 2011 budget increases. This sounds like an export subsidy and puts the government into the position of picking winners and losers among companies applying for loans (may the best lobbyist win!).
-Locke says the administration favors “trade agreements that are balanced, ambitious and improve market access for U.S. workers, firms, farmers and ranchers” but pledged “continuing the rigorous enforcement of international trade laws to help remove barriers that prevent U.S. companies from getting free and fair access to foreign markets.” In practical terms, Locke’s emphasis on the fig leaf of enforcement means the administration will continue to have no real intention of pushing the three stalled FTAs with Panama, Colombia, South Korea (although Sec. Locke said that USTR Amb. Ron Kirk is working “to fix the problems” with those FTAs).
Bottom Line take-aways: The NEI relies on too much government interference and too many USG bureaucrats shilling for politically well-connected companies. It was telling that the only FCS success story Sec. Locke cited involved the sale of a General Electric “combined cycle power plant” in Kuwait (in April 2009 after Obama took office, of course). GE’s Chairman, Jeffrey Immelt, is a well-known Obama supporter and GE owns pro-Obama MSNBC. Another little sign—a pro-NEI press release from the United Parcel Service (UPS) was distributed at the luncheon. Non-unionized FedEx has alleged in full-page advertisements in the Washington Post and elsewhere in recent months that the Obama Administration has tilted USG policy in favor of UPS and their 35,000 Teamster Union drivers.
The real answer is not an “Export Cabinet,” but lowering taxes and reducing regulations so that U.S. companies can be truly competitive. Instead of increasing the FCS budget, why not abolish it and use the savings to reduce the deficit! Truly competitive U.S. companies can hire their own private sector consultants who will be far more effective than Foreign Commercial Service bureaucrats.
If President Obama really wanted to expand market access for all U.S. exporters, he would push Congress to approve the free trade agreements with South Korea, Colombia, and Panama. What he and Secretary Locke actually want is for the government to decide which exporters get taxpayer money, just like the government decides who gets bailed out at home, who gets what health care, which producers get a break from cap and trade, and on and on.