Click here to access the comments submitted to the U.S. Department of Commerce regarding the National Export Initiative on July 26, 2010.
Ten Steps to Growing U.S. Exports
Kevin M. Burke
President and CEO
American Apparel & Footwear Association
Originally appearing in the June/July 2010 issue of Fashion Mannuscript
In his first State of the Union Address in January, President Barack Obama finally took his trade policy agenda out of the freezer. During this much heralded annual progress report, President Obama outlined his goal to double U.S. exports in the next five years – all for the goal of creating two million jobs and sustaining countless others.
Because one in five jobs in the United States is dependent upon international trade, the goal of creating and sustaining jobs through exports is hardly a new concept. In fact, the “exports as job creator” mantra has been the tune of economists since economists spoke themselves into existence.
Still, I commend President Obama for committing to this laudable goal. As Obama’s trade policy begins to thaw on the kitchen counter and we see what we have underneath the freezer burn, I would like to offer my ten-step plan that can help make this goal a reality.
1. It’s all about the financing. In order for our domestic manufacturers to step up to the plate and start filling double the orders, small and medium sized enterprises must be able to access the credit that serves as the lifeblood of their business. Once producers are able to access credit, it is imperative that the United States eliminate the restrictions that prevent our industry from receiving access to export financing so new products can leave the warehouse and be shipped overseas.
2. Vote three times to gain over 100 million new customers. It is unfortunate that the United States has three trade agreements sitting on a shelf collecting dust – and charging our manufacturers unfair tariffs to boot. By Congress passing already negotiated pending trade promotion agreements with Colombia, Panama, and South Korea, our producers would have unfettered access to over 100 million new consumers who are eager to purchase our goods and services.
3. We need more customers. If we expect to grow our exports, we must grow our consumer base. Because 95 percent of the world’s consumers live outside the United States, we need to open as many markets as possible. By participating in such initiatives like the Trans-Pacific Partnership, we will acquire the market access we need to double our exports.
4. Improve what we have. To date, the United States has entered into 17 free trade agreements with key trade partners around the world. As times change, we need to ensure that our current agreements fit the bill with regard to technological developments, intellectual property protections, and new market opening opportunities. If you think about it, are you still using the same computer you were using ten years ago?
5. Finish what we start – even nine years later. To knock down trade barriers all around the globe, we must finally achieve a successful and ambitious conclusion to the Doha Round of trade negotiations at the World Trade Organization that started in 2001. We must press on through all of the false starts and near collapses because the market benefits for developed and developing countries are too good to ignore.
6. Everyone must play by the rules. A globalized economy is strongest when everyone adheres to the international rules-based trading system. As we all have seen firsthand, trade barriers go up and players are quick to break the rules when a recession hits.
7. I mean everyone. Just as the United States expects its trading partners to play by the rules, we must live up to that same standard. We cannot afford to break or ignore our own obligations in the global economy.
8. U.S. products are U.S. profits. U.S. exports are not just products made here at home. U.S. companies make U.S.-branded products everywhere. They also sell them everywhere – with those products sometimes never coming home before they are purchased by a customer in another country. However, U.S. workers still design, market, and sell those products. Further, those profits still come home. To maximize those valuable exports, we must ensure that we are facilitating those transactions as well.
9. Appreciate the importance of imports. Exports are important – that is a given. But if we do not appreciate and support the role that imports play in an export-driven economy, we lose our comparative advantage. We can make all the quality products in the world, but if we refuse to buy from others, others will refuse to buy from us. Imports are just as important to job creation as exports.
10. Why stop there? Setting our sights on the goal of doubling exports is great. But, shouldn’t we think beyond that? Thinking and acting within the parameters of simply meeting a goal only limits the possibility of quadrupling our exports.
The U.S. apparel and footwear industry is the most global industry in the world. From our experience, these ten steps are proven to grow U.S. exports. Stay tuned for more details on growing exports as the debate continues in Washington, D.C.
