James T. Berger (June/July 10)
President Barack Obama's export policy is designed to make U.S. goods more competitive abroad and create jobs in the United States. The ambitious program aims to double exports in the next five years and create two million American jobs. But first, it must overcome trade barriers and create new markets for American-made goods.
Click to hear Obama's speech at the Export-Import Bank.
Obama's new "export regime" coincides with the administration's attempts to jumpstart an economy emerging from recession. A large part of the export program will provide $2 billion in credits for small- to medium-sized businesses, and an initiative to ease restrictions on selling certain American-made goods abroad. Obama will also establish a Cabinet-level panel of experts.
"In a time when millions of Americans are out of work, boosting our exports is a short-term imperative," Obama said at the 2010 annual conference of the Export-Import Bank of the United States. "The world's fastest-growing markets are outside our borders. We need to compete for those customers because other nations are competing for them."
Now the administration must balance the economic needs of the nation's manufacturers with effective controls that protect national security.
Export Policy Roots
Export controls have long been part of U.S. foreign policy. During the first half of the twentieth century, threat of war led to the Trading with the Enemy Act of 1917 and the Neutrality Act of 1935.
In 1940 Congress increased presidential power over the export of military goods and technologies with Public Law 703, An Act to Expedite and Strengthen the National Defense. These laws restricted activities that could have aided America's enemies.
The end of World War II brought a new peacetime philosophy for export policy, but the Iron Curtain and the Cold War created new security threats that tightened peacetime export control measures. The resulting Export Control Act of 1949 included:
•Short supply controls to prevent exporting scarce goods that would negatively affect the U.S. economy.
•Foreign policy controls that allowed the President to promote the nation's foreign policy through anti-terrorism and human rights programs and regional stability.
•National security controls that restricted exports of any products that could aid the militaries of countries that threatened U.S. national security.
The act was routinely renewed through 1965, but was re-examined by the détente era. During this time, trade between the U.S. and Communist countries became more significant and U.S allies started putting pressure on the country to ease its export controls. The 1989 collapse of the Soviet Union marked a dramatic change for American exports because the Cold War threats that previously determined the country's policies perished.
In September1993, the Clinton Administration unveiled its "National Export Strategy." The plan coordinated the promotion of U.S. exports and export financing activities to promote American businesses in the global marketplace. The new strategy anchored Clinton's economic policy.
While past policies addressed national security and foreign policy issues, the Clinton plan equated export promotion with continued economic growth and job creation. Key elements of the policy included:
•The increase of U.S. exports from $700 billion to $1 trillion by 2000.
•The creation of six million new jobs.
•The creation of the Trade Promotion Coordinating Committee (TPCC), a group of 19 governmental agencies chaired by the Secretary of Commerce and encompassing more than 100 export promotion programs.
The emergence of post-9/11 global terrorism influenced President George W. Bush's emphasis on government to monitor control of U.S. goods, services, and technologies that could aid potential enemies. The administration promoted a dual-use strategy that guarded against aiding enemies of the U.S. while permitting competitiveness of American-made goods through a more efficient and transparent export licensing process that enhanced dispute resolution and ensured controls. Bush's policies included:
•Additional financial resources and intelligence support for the timely adjudication of trade licensing.
•Guidelines requiring a 60-day decision process for export license applications.
•An electronic licensing system for submission of defense trade licenses that enabled all agencies to access the same electronic information.
•An update of U.S. controls on exports involving dual- and third-party nationals from NATO and other allied countries.