Great news about the Administration’s new export initiative! The National Association of Manufacturers has long been supportive of a significant effort to boost U.S. exports. Of the 15 major manufacturing nations the United States is dead last in the proportion of production that we export.

So how do we double exports in five years?

The dollar cannot be overvalued. Global currencies should reflect their actual market values.

Modernize export controls. Modernizing the export control system will strengthen national security, focus limited resources on truly sensitive technologies, promote U.S. technological and scientific leadership, and improve economic competitiveness. In addition, modernization creates more than 340,000 new jobs and increases exports by nearly $60 billion over the next 10 years.

Open access to markets. The United States enjoys a manufactured goods trade surplus with countries we have a free trade agreement with. We already have low tariffs, and FTAs work to lower the tariffs of other countries.

Export promotion. Thousands of U.S exporters export to only one or two countries. Adding one or two more to their markets would increase total exports by a third.

We applaud Secretary Locke’s new export initiative and look forward to work with Administration to increase manufacturing exports.

Frank Vargo is NAM’s vice president, international economic affairs.

Commerce Secretary Gary Locke speaks at the National Press Club at noon today to flesh out the President’s State of the Union remarks calling for a doubling of U.S. exports within five years, a speech entitled, “”Back to Basics: A Blueprint for Exports-Driven Job Growth.”

AP reports:

The president’s National Export Initiative will target three key areas - expanding trade advocacy, improving access to credit especially for small and medium-sized businesses and rigorously enforcing international trade laws. The government-wide strategy will be coordinated at the cabinet level, Locke is set to tell a National Press Club audience.

“Increasing the export of American products and services to global markets can help revive the fortunes of U.S. companies, spur future economic growth and support jobs here at home,” Locke said in remarks prepared for delivery to a National Press Club audience. “This initiative will correct an economic blind spot that has allowed other countries to slowly chip away at the United States’ international competitiveness.”

The Washington Post on Wednesday carried an excellent column by C. Fred Bergsten of the international trade think tank, the Peterson Institute, outlining key strategies for achieving the export goal, “How best to boost U.S. exports.”

The AP story cites the National Association of Manufacturers commissioned study by the Milken Institute, “Jobs for America,” on the value of modernizing export controls. The analysis finds that export growth would boost real GDP by $64.2 billion (0.4 percent) relative to the baseline projection in 2019.

UPDATE (9 a.m.): Bloomberg reports:

The U.S. will provide $6 billion in export financing for small businesses and take a tougher line on foreign trade barriers as part of a bid to double exports, Commerce Secretary Gary Locke is due to say in a speech today.

“While the U.S. is a major exporter, we are underperforming,” Locke will say at the National Press Club in Washington, according to excerpts released by the Commerce Department. The administration “is going to provide more funding for export promotion and more coordination between government agencies.”

NPR also had a reasonable, politically oriented story this morning, “Obama’s Efforts To Boost Exports Face Hurdles.”

From the President’s State of the Union:

[We] need to export more of our goods. (Applause.) Because the more products we make and sell to other countries, the more jobs we support right here in America. (Applause.) So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. (Applause.) To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security. (Applause.)

That’s a welcome target to achieve export-driven growth, and it’s notable that the President regards the export controls issue important enough to warrant a mention.

Correctly so, the NAM believes. The new Milken Institute study, “Jobs for America,” concludes “modernizing U.S. export controls could increase exports in high-value areas. By 2019, these policy adjustments could enhance real GDP by $64.2 billion (0.4 percent), create 160,000 manufacturing jobs, and heighten total employment by 340,000.” The in-depth analysis is here.

The President also reaffirmed the Administration’s oft-stated belief in the value of trade agreements.

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. (Applause.) But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. (Applause.) And that’s why we’ll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia. (Applause.)

But let’s do more than “strengthen” — let’s ENACT. The President would have helped achieve the goal he had just set by calling on Congress to enact the U.S.-Colombia Free Trade Agreement, the U.S.-Panama Free Trade Agreement, and the U.S.-Korea Free Trade Agreement.

As NAM President John Engler said in a press briefing Monday, “”We believe we absolutely have the votes for the Panama and Colombia agreements.” And… “We think if they’re serious on the jobs front, they have to look at trade. We’ve got a lot of companies that send a big amount of their production abroad for sale.”

The National Association of Manufacturers on Tuesday hosted a news briefing by members of the Coalition for Security and Competitiveness, a broad coalition of business groups that support modernizing the U.S. system of export controls.

Defense News summarized the day’s news, “U.S. Firms Launch Export-Control Reform Push“:

Declaring that the Obama administration presents the best opportunity in years to overhaul export rules that limit weapons sales, 19 industry lobbying groups have relaunched a campaign for sweeping reform.

The groups want to de-emphasize the current reliance on munitions and dual-use technologies lists, and base export decisions on such factors as whether an item can be bought from another country, whether it is widely used outside of defense and whether the buyer is a trusted partner.

The 19 groups, which represent hundreds of U.S. companies from warplane manufacturers to software coders, said Jan. 12 that a review of export control regulations now underway by the Obama administration offers real hope for change.

As the Coalition explained in the news release accompanying the event:

The United States export control system has not been significantly revised in more than twenty years. The result is a system that no longer fully protects our national security, has not kept up with accelerating technological change, and does not function with the efficiency and transparency needed to keep the United States competitive in the global marketplace.The Administration’s export control review, as well as impending legislative proposals, provides an opportunity to strengthen our security and give business the clarity and guidance it needs to comply with the rules and remain competitive.

(Photo: Chris Hansen, Tech America CEO (left); Frank Vargo, vice president for international economic affairs, NAM.)

More …

• CSC Letter to the President…
• The CSC Issues Principles and Objectives for Export Control Modernization
• The Hill, “Coalition recommends export control reforms”
• Reuters, “US business gives Obama export control reform plan“
• The Journal of Commerce, “Trade Groups Ask Obama for Change”
• Seattle Post Intelligencer, “Industry groups push for easing export restrictions”

From The Wall Street Journal’s Real Time Economics blog, “White House Hopes Trade Can Bolster Labor Market“:

With the unemployment rate in double-digit territory, the Obama administration is turning to trade policy as a potential balm for the ailing labor market.

By increasing exports to rapidly growing countries like China and India, the U.S. could put a dent in joblessness and foster long-term economic growth without stressing the federal budget. But overhauling export policy is part of a White House approach that is in the early stages of execution.

The White House demanding a Congressional vote on the Colombia and Panama Free Trade Agreements to start with, and then Korea, would be an excellent way of demonstrate the seriousness of the Administration’s embrace of trade.

The Administration is moving ahead with needed modernization of U.S. export controls, the story notes, a priority for improving U.S. competitiveness on high-value exports.

And from Reuters, “Business urges Obama get off trade sidelines in Asia“:

We just cannot afford to be on the outside, looking in at Asia, which is where both trade and trade agreements are growing the fastest in the world,” said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers. 

Tom Walsh of The Detroit Free Press cites recent remarks by NAM President John Engler in today’s column, “U.S. needs to boost its exports,” and asks the necessary question: Why don’t we do more to boost manufacturing exports?

Complacency, mostly. America was the biggest, most affluent, most productive economy in the world for so long, many manufacturers saw no need to hustle their wares abroad.

But today, U.S. consumers aren’t spending so freely. Global competition is fierce, and studies show that active exporters are more innovative than the stay-at-home crowd. So we need to get serious about exports.

That means dialing back U.S. constraints on exports, such as cumbersome licensing requirements that date to Cold War security issues, as U.S. Commerce Secretary Gary Locke proposed last week and NAM supported. Corporate income tax rates, research and development credits and other tax issues need revisiting with the aim of boosting U.S. export competitiveness.

Complacency? Really? Organized labor represents a powerful political force against trade and exports. It’s not complacency that drive the union bosses toward protectionism, it’s misguided self-interest and an almost tribal “us against them” attitude.

But agreed on the Walsh’s prescriptions, 100 percent.

Speaking at the Bureau of Industry and Security’s Update Conference on Export Controls, Secretary of Commerce Gary Locke proposed changes to the nation’s export control system, well described in the news release’s headline, “Commerce Secretary Gary Locke Proposes Reforms to America’s Export Controls System to Enhance National Security and Improve Competitiveness“:WASHINGTON—U.S. Commerce Secretary Gary Locke proposed reforms to modernize America’s export controls system, which will enhance national security and increase the competitiveness of U.S. companies, in a speech at the Bureau of Industry and Security’s Update Conference on Export Controls today. The United States export control system seeks to prevent sensitive items from falling into the hands of those who seek to do us harm.

“Our current system was designed in the 1950s and its Cold-War-era framework is ill-suited to manage the highly complex 21st century threats currently faced by the United States,” Locke said. “We need to fundamentally revise our export control system to account for the emergence of new foreign markets, competitors and multifaceted threats that have arisen over the past few decades.”The release notes that a U.S. company recently lost two major sales to Italy for predictive maintenance imaging cameras — which is standard, widely available commercial technology — because the U.S. export control system takes too long to deal with. The Japanese got the sale.

Secretary Locke’s remarks are here.

Reuters did a story on the announcement, “US Commerce chief proposes dual-use export reform,” citing the NAM’s Frank Vargo, who calls Locke’s proposals important steps.

Modernizing export controls is one of the NAM’s priority issues, although it doesn’t get all that much media attention. (The issues becomes technical pretty quickly.) In 2007, the NAM helped create the Coalition for Security and Competitiveness to address the issue, and we have posted background information here.

With webcast. NAM President John Engler testifying.

The Export Administration Act:
A Review of Outstanding Policy Considerations

The Subcommittee on Terrorism, Nonproliferation and Trade to be held in Room 2172 of the Rayburn House Office Building.

UPDATE (11:30 a.m.): Prepared testimony now available:

• The Honorable Brad Sherman,
• The Honorable John Engler, President and CEO, NAM.
• Arthur Shulman, Esq., Senior Research Associate, The Wisconsin Project on Nuclear Arms Control
• Owen Herrnstadt, Esq., Director of Trade and Globalization Policy International Association of Machinists and Aerospace Workers

John Engler, president of the National Association of Manufacturers, appeared this morning on CNBC to discuss the economic stimulus, infrastructure and tomorrow’s hearing on the Export Administration Act.

The hearing is by the House Foreign Affairs’ Subcommittee on Terrorism, Nonproliferation and Trade, “The Export Administration Act: A Review of Outstanding Policy Considerations.” Details.

The House has stacked up roll call votes on 26 amendments to an appropriations bill, so committee hearings were interrupted today.

The House Homeland Security Committee mark-up of H.R. 2868, the Chemical Facility Anti-Terrorism Act, didn’t get very far at all before the committee broke. Chairman Bennie Thompson (D-MS) did have an opening statement. (Earlier post.)

NAM President John Engler was scheduled to testify before  a House Foreign Affairs Committee subcommittee hearing on export controls and the Export Administration Act. That hearing was postponed.