Brookings study: U.S. cities need growth in exports
By Howard Schneider
What can the Obama administration do to boost U.S. exports?
Plenty, according to a Brookings Institution panel discussion Tuesday that raised complaints about tax policy, the slow pace of approval for loan guarantees, and competition with China.
"We, in effect, are getting our clocks cleaned," former Liberty Mutual insurance executive Thomas Ramey said during a discussion bemoaning the fact that only one percent of U.S. businesses export, and only about half of those export to more than one country.
"Americans are insular," said Export-Import Bank chairman Fred P. Hochberg. "We have to get better at it."
The session was organized around the release of a new Brookings study that urges President Obama to concentrate on helping the top U.S. cities -- which account for most of the nation's overseas sales -- to boost their exports. Focusing on the largest metro areas would further the administration's goal of doubling exports over the next five years, according to the report's author, Bruce Katz.
Katz called for federal and local governments to work together to increase American exports and create more jobs at home: The U.S. government would oversee currency disputes, trade negotiations and funding for research and development. And big-city officials would help their local exporters with targeted aid, marketing and attention to critical issues such as transportation.
"The United States needs to connect the macroeconomic goal of increasing exports with the metropolitan reality," Katz said.
The discussion provided insight into the administration's export strategy and elicited ground-level critiques from business and local officials.
Hochberg said the Export-Import Bank, which helps finance U.S. export deals, has focused on nine countries where economic growth is fast and infrastructure budgets are large: Mexico, Brazil, Colombia, Turkey, Nigeria, South Africa, India, Vietnam and Indonesia. The agency is concentrating in sectors where it believes the United States can reap the most benefits, he said, such as avionics, medical technology and heavy equipment for construction, farming and power generation.
Bryan Ashley, a solar energy entrepreneur and chief marketing officer of Suniva, and San Jose (Calif.) Mayor Chuck Reed said the administration could move on a number of fronts to help exporters.
Reed said he is concerned about the effect of U.S. immigration policy on exporters. Foreign students at American colleges, he said, may find it harder to stay in the United States after graduation and put their new expertise to work at American companies. Employers in Silicon Valley feel the United States should "staple a green card" to the diplomas earned by foreign students so they are encouraged to stay in the country, Reed said.
Reed also criticized administration plans to raise taxes on overseas income earned by U.S. corporations, arguing that it could encourage some of the more entrepreneurial firms to move offshore completely.
Ashley put the situation in blunter terms. His company manufactures photovoltaic cells, and has developed a thriving export business -- to the point where it is turning down orders, he said. The company hopes to build a second manufacturing plant in Michigan, but is now in its second year awaiting a Department of Energy loan guarantee needed to finance the venture.
In the meantime, Ashley said, China has approved hundreds of millions of dollars in national support for competing firms there, and other Asian countries have offers on the table. "I could go to Malaysia, and they'd give us the money. I'd rather do it here," Ashley said. "I'm turning away customers."
July 27, 2010; 5:04 PM ET
Categories: China , Trade
Save & Share: Previous: Christina Romer for San Francisco Fed chief? Just maybe
Next: Economic Agenda: Wednesday, July 28, 2010
Posted by: angie12106 | July 28, 2010 8:19 AM | Report abuse
Posted by: reenie10 | July 28, 2010 3:10 PM | Report abuse
Posted by: Anonymous | July 28, 2010 11:01 PM | Report abuse
The comments to this entry are closed.