Obama Promotes Export Policy To Rally Economy
In one of its many efforts to pump up the economy, the Obama administration is focusing on exports to jumpstart post-recession business.
James T. Berger (June/July 10)
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Effect on Manufacturing
The National Association of Manufacturers (NAM) has embraced Obama's plan. Frank Vargo, NAM vice president for international economic affairs, said in a statement following Gates' address:
"Manufacturers are pleased the Administration is moving forward with changes to modernize the current Cold War-era system. These changes are critical to keeping America secure and competitive globally. We are particularly encouraged by the announcement of a single control list and a unified information technology platform, but we believe the administration must also move forward on near- and medium-term reforms along the way to creating a single agency."
In April, NAM released its "Blueprint for a 21st Century Export Control Regime," which included eight recommendations:
1.Establish a permanent interagency team (similar in structure and composition to the interagency team formed in December 2009) to annually review and assess overall policy objectives and performance of the export control regime.
2.Co-locate technical experts from the Departments of Defense, Commerce, State, and other relevant agencies to create a new unified control list, determine foreign availability, create control charts, and review levels of control.
3.Create a unified control list with two chapters: one for munitions items and the other for dual-use items.
4.Improve multilateral engagement.
5.Create a new licensing system built around a single electronic interface and a broad range of authorizations and exceptions that takes advantage of auditable compliance systems implemented by trusted country partners, exporters, and importers.
6.Review U.S. economic sanctions policy with special attention to unilateral sanctions.
7.Change the trade-control culture and promote unified approaches across licensing agencies that properly balance national security and economic security imperatives.
8.Change the trade control culture and promote unified approaches across licensing agencies that properly balance national security and economic security perspectives.
In June National Security Advisor General James Jones announced a single-entity to administer export controls, a move that NAM lauded.
"The NAM is pleased with today's announcement to create a new single entity to administer export controls and believes this will better equip the United States to protect national security, strengthen the defense industrial base and double exports over the next five years. However, it is critical that the implementation of this new entity include a workable transition plan as well as completion of phases one and two of the Administration's reform initiative," Vargo wrote in a statement.
The plan calls for the creation of new control criteria, licensing processes, and control lists.
Economists name several hurdles that must be overcome, such as undervalued foreign currencies, excessive tariffs and protectionist pressures from trading partners, and intense price competition.
"It's not just a matter of selling what we've got," Robert E. Scott, senior international economist at the Economic Policy Institute, told The New York Times in a March 11 article about Obama's export policy. "We've got to come up with new products and break down barriers in foreign markets."
Ralph C. Bryant, senior fellow at the Brookings Institution, said in the same article that efforts to stimulate exports could prompt other countries to take similar actions. "There is no way that all the countries can increase exports at the same time," he said. "If we do it and everyone else does it, it will be less successful and raise the possibility of friction."