When it comes to trade policy, export is President Obama's mantra. His thinking is that if the United States doubles exports in five years, the economic recovery will be greatly strengthened. But Obama emphasizes the wrong side of the trade equation. Sure, the U.S. government should take every sensible measure to promote exports - provided that Washington stops equating trade flows associated with production offshoring with overseas sales that represent net new orders for companies and workers at home.
However, exporting probably has a much lower ceiling than our president realizes. After all, even when times were good, America's trade competitors proved reluctant to import enough from the United States to keep trade flows in sustainable balance. And it's not as if Washington hasn't signed enough trade agreements supposedly aimed at opening markets during the last 20 years. And now that the burst housing and finance bubbles have triggered an historic recession, can we really expect foreign enthusiasm for Buying American to increase?
Most likely not.
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