Executive Briefings

Is the President's National Export Initiative a Dud?

It's been more than three years since the Obama Administration launched its National Export Initiative (NEI), with much ballyhoo. The stated goal of the massive effort was to double U.S. exports within five years - from $1.57tr in 2009 to a projected $3.14tn in 2015.

Is the President’s National Export Initiative a Dud?

Of all the things that President Obama has tried to achieve so far, this might be his least controversial. Exports join motherhood, apple pie and superhero movies in the category of Things That Americans Love. So why is one spokesman for U.S. exporters calling the NEI little more than a press release?

You can't fault the President for a lack of ambition. A White House report that accompanied the NEI's release promised that the government would "expand efforts to help U.S. businesses win more foreign government contracts, find buyers worldwide, participate in more trade missions and shows, receive more export financing, and learn new ways to sell products and services overseas."

In the opinion of the Obama Administration, it's doing just that. In a fact sheet issued by the U.S. Department of Commerce in February of this year, the White House claims to be making "historic progress" toward its goal.

Last year, it notes, U.S. exports hit an all-time high of $2.2tr. For the first time since 2007, growth in exports of goods and services outpaced that of imports both in dollar and percentage terms. (Reality check: the U.S. trade deficit in 2012 was $540.4bn.) Exports amounted to 13.9 percent of U.S. gross domestic product, tying the record set in 2011. And exports of manufactured goods rose 47 percent between 2009 and 2012, to a record $1.35tr in 2012.

If the administration is to be believed, the NEI is a major factor behind this export windfall. The President claims to be well on his way to streamlining the regulatory process and eliminating other roadblocks to selling overseas.

The American Association of Exporters and Importers was a big supporter of the NEI from the outset. "The actions would enhance national security better than the current system by concentrating the government's efforts on enforcing controls on the export of critical technologies," the group said in a statement when the initiative was unveiled.

Who could possibly quibble? Peter Friedmann, for one. He's executive director of the Agriculture Transportation Coalition. Farm exports in 2012 were up 38 percent from 2011, the Commerce Department noted, to a record $145.4bn. "This increase was achieved while farmers weathered the worst drought in decades," the fact sheet pointed out. So AgTC ought to be especially happy with the President's efforts on its members' behalf.

If only. When it comes to the NEI, says Friedmann, "a lot of people are wondering what it's actually done, other than talk about how important exports are. I think the President's record on export enhancement should be seen less in the light of a glitzy National Export Initiative with a lot of very senior business leaders coming to D.C. for highly visible meetings, and more in light of specific steps that the President has taken to enhance exports - or not."

Friedmann questions whether the NEI has done a single thing to speed up or streamline export paperwork. Or reduce inspections. Or cut back on documentation review. Or remove any regulations that hamper the ability of U.S. products to sell in foreign markets.

Yes, he concedes, exports have increased in the years since announcement of the NEI. (And continue to do so. Commerce Department export figures for April, 2013 show a 1.7-percent rise over the same period of 2012, and a consequent $6.3bn decrease in the U.S. goods and services deficit.) But that's due to global economic changes, Friedmann argues, not any proactive measures by federal agencies.

On the contrary, he says, the Obama Administration has acted in ways that are potentially harmful to the interests of American exporters. It sat on three free trade agreements - with South Korea, Colombia and Panama - for four years before sending them to Congress for final approval. In addition, there's been talk of extending the import-security initiative known as the Customs-Trade Partnership Against Terrorism (C-TPAT) to exports. While the program is voluntary, "we see it as perhaps imposing another layer of scrutiny and burden on exporters," says Friedmann.

Even the AAEI appears to be nursing doubts. "There has certainly been an uptick [in U.S. exports]," says president and chief executive officer Marianne Rowden. "However, most people who look at this in the media acknowledge that we will not meet the President's goal of doubling exports in five years."

The reason, says Rowden, "has to do with the government simply not understanding the complexity of modern corporate manufacturing practices." Few goods today are produced in a single location, she says. "Countries don't trade. Companies do. That's what the government gets wrong."

Rowden says the positive export numbers are skewed somewhat by a few big manufacturers such as The Boeing Co. They contribute to high export value, but not to volume.

Recent government actions that have had a dampening effect on exports include "the constant ratcheting up of Iranian sanctions and the collateral effect of extra-territoriality of our laws and regulations. We dictate to other countries how they can do business with us." So much for reducing burdensome export regs.

In the Administration's defense, one could cite the arduous nature of any major regulatory reform. NEI is no exception; it's really a three-phase effort in which the final stage - consolidation of regulatory rules and agencies - isn't expected to be wrapped up until 2014.

Still, there are things the government could be doing right now to promote exports. Friedmann would like to see a more aggressive effort to pursue the proposed Trans-Pacific Partnership, for which the 18th round of negotiations is slated for July in Malaysia. Rowden supports the notion of sweeping free trade agreements among both Pacific and Atlantic nations. They would lead to global regulatory harmonization, reduced costs and lower trade barriers in both directions, she argues.

They would also make a pretty good press release.

Comment on This Article


Keywords: supply chain, supply chain management, global logistics, international trade, supply chain risk management, supply management, free trade agreements, National Export Initiative

Of all the things that President Obama has tried to achieve so far, this might be his least controversial. Exports join motherhood, apple pie and superhero movies in the category of Things That Americans Love. So why is one spokesman for U.S. exporters calling the NEI little more than a press release?

You can't fault the President for a lack of ambition. A White House report that accompanied the NEI's release promised that the government would "expand efforts to help U.S. businesses win more foreign government contracts, find buyers worldwide, participate in more trade missions and shows, receive more export financing, and learn new ways to sell products and services overseas."

In the opinion of the Obama Administration, it's doing just that. In a fact sheet issued by the U.S. Department of Commerce in February of this year, the White House claims to be making "historic progress" toward its goal.

Last year, it notes, U.S. exports hit an all-time high of $2.2tr. For the first time since 2007, growth in exports of goods and services outpaced that of imports both in dollar and percentage terms. (Reality check: the U.S. trade deficit in 2012 was $540.4bn.) Exports amounted to 13.9 percent of U.S. gross domestic product, tying the record set in 2011. And exports of manufactured goods rose 47 percent between 2009 and 2012, to a record $1.35tr in 2012.

If the administration is to be believed, the NEI is a major factor behind this export windfall. The President claims to be well on his way to streamlining the regulatory process and eliminating other roadblocks to selling overseas.

The American Association of Exporters and Importers was a big supporter of the NEI from the outset. "The actions would enhance national security better than the current system by concentrating the government's efforts on enforcing controls on the export of critical technologies," the group said in a statement when the initiative was unveiled.

Who could possibly quibble? Peter Friedmann, for one. He's executive director of the Agriculture Transportation Coalition. Farm exports in 2012 were up 38 percent from 2011, the Commerce Department noted, to a record $145.4bn. "This increase was achieved while farmers weathered the worst drought in decades," the fact sheet pointed out. So AgTC ought to be especially happy with the President's efforts on its members' behalf.

If only. When it comes to the NEI, says Friedmann, "a lot of people are wondering what it's actually done, other than talk about how important exports are. I think the President's record on export enhancement should be seen less in the light of a glitzy National Export Initiative with a lot of very senior business leaders coming to D.C. for highly visible meetings, and more in light of specific steps that the President has taken to enhance exports - or not."

Friedmann questions whether the NEI has done a single thing to speed up or streamline export paperwork. Or reduce inspections. Or cut back on documentation review. Or remove any regulations that hamper the ability of U.S. products to sell in foreign markets.

Yes, he concedes, exports have increased in the years since announcement of the NEI. (And continue to do so. Commerce Department export figures for April, 2013 show a 1.7-percent rise over the same period of 2012, and a consequent $6.3bn decrease in the U.S. goods and services deficit.) But that's due to global economic changes, Friedmann argues, not any proactive measures by federal agencies.

On the contrary, he says, the Obama Administration has acted in ways that are potentially harmful to the interests of American exporters. It sat on three free trade agreements - with South Korea, Colombia and Panama - for four years before sending them to Congress for final approval. In addition, there's been talk of extending the import-security initiative known as the Customs-Trade Partnership Against Terrorism (C-TPAT) to exports. While the program is voluntary, "we see it as perhaps imposing another layer of scrutiny and burden on exporters," says Friedmann.

Even the AAEI appears to be nursing doubts. "There has certainly been an uptick [in U.S. exports]," says president and chief executive officer Marianne Rowden. "However, most people who look at this in the media acknowledge that we will not meet the President's goal of doubling exports in five years."

The reason, says Rowden, "has to do with the government simply not understanding the complexity of modern corporate manufacturing practices." Few goods today are produced in a single location, she says. "Countries don't trade. Companies do. That's what the government gets wrong."

Rowden says the positive export numbers are skewed somewhat by a few big manufacturers such as The Boeing Co. They contribute to high export value, but not to volume.

Recent government actions that have had a dampening effect on exports include "the constant ratcheting up of Iranian sanctions and the collateral effect of extra-territoriality of our laws and regulations. We dictate to other countries how they can do business with us." So much for reducing burdensome export regs.

In the Administration's defense, one could cite the arduous nature of any major regulatory reform. NEI is no exception; it's really a three-phase effort in which the final stage - consolidation of regulatory rules and agencies - isn't expected to be wrapped up until 2014.

Still, there are things the government could be doing right now to promote exports. Friedmann would like to see a more aggressive effort to pursue the proposed Trans-Pacific Partnership, for which the 18th round of negotiations is slated for July in Malaysia. Rowden supports the notion of sweeping free trade agreements among both Pacific and Atlantic nations. They would lead to global regulatory harmonization, reduced costs and lower trade barriers in both directions, she argues.

They would also make a pretty good press release.

Comment on This Article


Keywords: supply chain, supply chain management, global logistics, international trade, supply chain risk management, supply management, free trade agreements, National Export Initiative

Is the President’s National Export Initiative a Dud?