Export Grants

Posts Tagged ‘us exports’

The Buy America campaign has its sights set squarely on Brazil, India and China and other fast emerging markets as part of Obamas goal of doubling exports over the next five years. Francisco Sanchez, Commerce Under Secretary for International Trade told reporters that is where US efforts need to be focused noting that 95% of the worlds consumer base is outside of the United States, and it is that group is where the largest gains will be found.

The initiative to increase exports plans a two sided approach. Increased advocacy for exporters, and a stepping up of enforcement of U.S. trade agreements to ensure that commitments to open their markets are being met. The under-secretary is planning a tour of major economies starting March 29th, visiting Brazil, India, Saudi Arabia, Canada and Mexico. China is also on the list and there is growing pressure on the Obama administration to put pressure on the communist government on their monetary policy and other trade matters, however he made sure to not go to far:

we will clearly and assertively press Chinese on any concerns, but do that in a way that bolsters trade rather than damages it

Sanchez also stated that the Commerce Department hopes to work closely with the Small Business Administration to grow US companies that export through grants and financing opportunities.

Sanchez said the Commerce Department would work closely with the Small Business Administration to increase the number small and medium-sized businesses that export. It will also call on logistics companies such as the US Postal Service, Fedex and UPS to try and identify companies that are already doing business overseas and help them find new markets for their products. There are also a number of large infrastructure projects planned in Algeria and Libya that US construction companies may be able to win a share of the contracts.

Finally after months of huge job losses, the U.S. economy got a welcome bost with 162,000 jobs added in March. Despite a large portion of these jobs being temporary workers hired by the Census Bureau the private sector itself added 123,000 jobs last month which was much high then analysts had predicted. Even though all these numbers were added, the overall unemployment rate of the country remained unchanged at 9.7. This is because despite the huge job gains, the economy needs to create at least 125,000 in order to keep pace with natural population growth.

There is still a long road ahead before recovery can gain a solid foothold. The country has lost over 8 million jobs during a two year period and compared to that number, the recent news is just a drop in the bucket. At the current rate it would still take over give years before we were able to consider the effects of the recession erased. Manufacturing added over 17,000 jobs for the third monthi n a row led by fabrication industries. Temporary-help in the private sector added 40,000 jobs in march a well. However the financial services and information technology industries both lost jobs in march. Health care, education and retail all had growth. One of the most promising signs is the consturction sector which finally had positive growth after many months of job losses adding 5,000. Many are counting on the construction industry to be the leader in job growth once the housing market is able to recover.

Obama was careful in his words praising the numbers calling it a “significat milestone”:

We are beginning to turn the corner, This month more Americans woke up, got dressed and headed to work in an office or factory or storefront. More folks are feeling the sense of pride and satisfaction that comes with a hard-earned and well-deserved paycheck at the end of a long week of work.

There are Thirteen states that are still posting double digit unemployment rates including: Florida, California and the District of Columbia and Illinois. Many companies have reported willingness to expand their payroles, however they want to wait until later in the year when there are more signs of a recovery to the overall recovery before they are willing to risk bringing on more help. When demand dropped off at the beginning of 2009 many industries want to see consumer spending rise significantly before investing.

The Obama administration is going to make sure that the Export-Import Bank (Eximbank) has the funds it needs to double exports over the next five years which is one of the cornerstones to help bring more jobs to the country. US Treasury Secretary Timothy Geithner announced on friday that:

We’re going to work hard to do what the president said, to make sure you have enough firepower to do sensible things to support American exporters. We think it’s good policy, but we need to do it carefully, make sure you’re putting it in areas where you’re going to get very good returns.

At the annimal Eximbank conference Geithner spoke alongside Eximbank President Fred Hochberg. If everything goes according to plan US Exports should rise to more then $3 trillion dollars over the next five years. Part of the plan inclides a new program to inject $2 billion dollars in loans for small and medium-sized exporters on top of the already authorized $21 billion in loan guarantees and export credit insurance. More money was pumped into these programs during the height of the global financial crisis when normal methods of loans for businesses dried up.

During the fiscal year 2010 so far, the amount given out has more then tripled the amount between October and December 2009. Geithner believes that exports are a measure of the American economy.

We do believe that exports are America’s future, and how American exporters are doing, how American businesses are doing around the world is a good measure of how America is doing.

The current democratic administration has proposed doubling of the exports from the United states in five years with the stated goal of creating over two million jobs and boosting the sagging economy. Former Treasury employees have lauded these moves however realistically speaking it will be near impossible considering the partisan bickering currently holding up congress. Even if congress was willing to push through major legislation to ramp up job creation the short five year time frame would be near impossible.

Exports have double inside of two or three year period in the past, but only a handful of times since the end of World War II so this is not a very frequent phenomena. When it did happen it was during times of rapid inflation such as after the oil crisis of the 1970s. If inflation is taken into account such a huge jump has never occurred in this nations history, and at the moment interest rates are so low that inflation has been stagnant since the beginning of the recession so there will not be any help to the natural increase in the value of goods.

Many of the proposals that the Obama administration has put into place also seem better on paper then they will pan out in reality. Taxing multinational corporations that send jobs overseas will only lead to a vast exodus of jobs from our country as these companies which are often the major driver for economic growth will take their jobs elsewhere. This has been a common talking point among politicians but the reality is much more complicated. Other ideas have already fallen flat. The “Buy American” policy has already drawn anger from many countries from around the world due to its protectionist import connotations, which also flies in the face of the free trade goals that every country “seems” to support.

Currently health care is still front and center for the president, but hopefully once this has been either moved through congress or given up on we are not likley to see any debate on what we can do to improve our numbers. During the last few years the trade deficit with our trading partners has narrowed, but we are yet to close or surpass them. After all, a doubling of our exports will not help out the economy much if our imports have tripled during the same period of time.