An interesting juxtaposition in today’s New York Times, which reports in separate on the manufacturing sectors of major U.S. competitors, China and Germany.

“Defying Global Slump, China Has Labor Shortage:

Some manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Such increases would most likely drive up the prices American consumers pay for all sorts of Chinese-made goods.

Rising wages could also lead to greater inflation in China. In the past, inflation has sown social unrest.

“Germany’s Export Prowess Weighs on Euro-Zone,” using the Frankfurt company Glasbau Hahn, a small manufacturer of high-cost museum display cases, to illustrate the power of Germany’s export-driven economy.

Glasbau Hahn is a miniature multinational company, generating more than 60 percent of its sales abroad and dominating its narrow but lucrative niche: the global market for museum display cases. Even King Tut’s mummy lies in a climate-controlled vitrine made in Glasbau Hahn’s workshop, which sits next to a railyard and across the street from a Fiat showroom.

And …

Glasbau Hahn helps explain why Germany is so competitive. The company and those similar to it are sometimes called hidden champions. They learned long ago to compensate for slow domestic growth by expanding overseas. And to offset the high cost of labor in Germany, they concentrate on premium products that customers are willing to pay more for.

But consumer borrowing and buying in the EU’s importing countries like Greece, Spain and Portugal have caused serious economic problems.

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.”

Senate Republican Leader Mitch McConnell (R-KY) responded to President Obama’s State of the Union address with remarks on the Senate floor Thursday. The Senator had sensible, cooperation-minded things to say about the energy development and expanded exports the President promoted the previous evening. From The Congressional Record, McConnell:

The President called for increased exports and for the Congress to pass trade agreements that have languished under the current majority in the Senate. Republicans agree with the need to increase trade and with the need to ratify trade agreements with Colombia and other important trading partners that so far have met resistance on the other side of the aisle. We also support passing a sensible bill to help Pakistan establish reconstruction opportunity zones that actually increase trade and do not impose self-defeating restrictions.

We agree with the President’s call to pass these agreements. We agree that these agreements will lead to more American jobs. The Congress should act on these agreements.

The President also called for producing more American energy. This is an area with a huge opportunity for American jobs that cannot—cannot—be sent overseas. We agree with his call for more clean energy produced here in America. We agree with his call for building more nuclear plants. We agree with his call for increased offshore exploration for oil and gas. We agree with his call for development of clean coal technologies. We should build a new generation of clean nuclear plants in this country.

Reuters has a good nuts-and-bolts piece on today’s White House Forum on Jobs and Economic Growth, scheduled to start at 1:30 p.m. “FACTBOX: Obama’s jobs forum on Thursday” reports that both President Obama and Vice President Biden speak to kick things off.

The National Association of Manufacturers sent a letter to the President yesterday outlining specific policies that could promote jobs creation. Excerpt:

We at the NAM stand ready to assist you in advancing a growth and jobs strategy that
builds on a strong manufacturing base to serve our entire nation. In recent weeks you have
emphasized the importance of exports in ensuring domestic growth, and we heartily endorse the necessary action to promote world trade. Tax policy must also figure prominently in any growth strategy, as the United States continues to be disadvantaged by having the second highest statutory corporate tax rate in the industrialized world.

For the White House Forum to focus most effectively on creating jobs and long-term economic growth, the NAM recommends it emphasize transportation and energy infrastructure. Investments in these areas not only create jobs, they also help build a foundation for U.S.
competitiveness. They belong at the heart of any jobs and growth strategy.

With 130 attendees and six break-out sessions, today’s forum reminds us of the March 5th “White House Forum on Health Reform.” That gathering had about 140 outside participants and five break-out sessions. Did that forum achieve anything?

That confab came early in the Obama Administration, so it was especially useful as an introduction to the White House’s views of the players and issues. Today’s forum? There are plenty of good topics on the agenda — exports, for example — and exchange of ideas is often helpful.

Coverage …

• CBS News, “Politics Today: Obama Explores Modest Steps for Job Creation“
• ABC News, “White House Jobs Summit: Real Progress or PR Stunt?”
• Politico, “Jobs summit to showcase administration’s jobs effort“

Not very much online at WhiteHouse.gov about the event, like a full list of attendees. We’ll post it when the White House does.

Investor’s Business Daily editorializes on the United States falling behind as a nation and economy benefitting from trade, arguing in “Losing Out Big Time” that the decline must be reversed quickly or become a permanent disadvantage.

Tuesday, Cato Institute economist Daniel Griswold took issue with U.S. Trade Representative Ron Kirk’s congratulatory claim that the U.S. is “the most open market in the world.”

Actually, it slipped from No. 2 in 2000 to No. 26 in 2007, the last year for which data are available, in Cato’s 2009 Economic Freedom of the World annual report.

“If an Olympics were held for the most open economy, the United States would be out of medal contention,” Griswold wrote, citing tariffs, regulatory barriers and other factors.

It’s reportedly down to No. 28 in 2008 data, and getting worse. Given that size of government, freedom to trade internationally and regulation are the criteria used in Cato’s index, you can bet that the U.S. ranking will drop even lower in 2009.

It puts the U.S. behind Hong Kong, Singapore, the United Arab Emirates, Chile, the Netherlands, Ireland, Switzerland, Slovakia and Estonia, all nations that have seen their living standards rise based on an aggressive strategy of free trade.

Here’s Griswold’s column at Cato@Liberty, “U.S. ‘the Most Open Market’? Not Even Close.”

Investor’s Business Daily also cites the NAM’s Frank Vargo, who has analyzed export data and finds that the United States ranks last among 15 industrialized countries in the percentage of its manufactured goods exported. (See this Shopfloor.org post.) The editorial concludes:

Competitiveness isn’t lost through a single event; rather, it’s lost over time as the effects of many bad policies are felt. Right now, on trade, the U.S. is going in the wrong direction. It could turn things around quickly by getting back on the free-trade bandwagon.

From The Los Angeles Times, “Sliding dollar may be something to cheer about“:

By making American products cheaper for most foreign buyers, the dollar is helping many U.S. companies boost their overseas sales. The weakening dollar also gives domestic businesses a competitive edge at home, making their products cheaper than rival imports.

Good observations on the dynamics from Roy Paulson of Paulson Manufacturing Corp. in Temecula, Calif. which makes goggles and other protective gear.

The National Association of Manufacturers has honored Roy in the past as the Small and Medium-Sized Manufacturer Exporter of the Month.

We wouldn’t go as Canada’s The Financial Post, which proclaims, “U.S. manufacturing rises from the ashes,” but certainly acknowledge good news:

With the global economy expanding and the U.S. export sector getting an additional boost from a sliding greenback, “Made in USA” stocks are looking attractive, even for currency-obsessed Canadian investors.

“Conventional wisdom does not appreciate the strength of U.S. manufacturing,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York. “It remains the world’s largest manufacturer and it achieved this with an absolute and relative decline in the share of labour it commands.”

The Post uses the peg of Alcoa’s surprise profits announced Wednesday.

Along those lines, the Department of Commerce today announced that U.S. exports increased by 0.2 percent in August to $128.2 billion since July 2009. Imports declined 0.6 percent to $158.9 billion.

The NAM’s chief economist, David Huether, commented:

As the U.S. domestic economy continues to struggle to recover from the deepest recession in the post-World War II era, we are seeing more signs of improvement. Today’s report brings welcome news of a recovery in exports. U.S. manufacturers have become more globally engaged over the past several decades, and this positive trend continues. Clearly, export growth will be an increasingly important ingredient in our economic performance.

We cited below Tom Walsh’s column in today’s Detroit Free Press,
U.S. needs to boost its exports,” and very much appreciate his examination of the issue. Walsh also touches bases with the NAM’s top trade policy person:

Frank Vargo, NAM’s vice president of international economic affairs, freely praises the approach of the new Democratic administration of Barack Obama to export issues so far.

“I worked in the Commerce Department for 30 years under 18 different Commerce secretaries,” Vargo told me, “and I’ve seen more interest in exporting on the part of this administration than in a long time.

“They really get it. They don’t have a concrete plan or strategy in place yet, but they get the importance.”

UPDATE (11:10 a.m.): U.S. Trade Representative Ron Kirk is scheduled to hold a news conference at 11:45 a.m. Monday to unveil efforts to boost trade by small- and medium-sized U.S. firms. And on Tuesday, a Senate Commerce subcommittee holds a hearing, “A World of Opportunity: Promoting Export Success for Small and Medium-Sized Businesses.”

John Engler, president of the National Association of Manufacturers, sat down with reporters and columnists yesterday for a discussion of the economy and the elements that would comprise a “growth strategy” — infrastructure, energy and exports.

Tim Aeppel of The Wall Street Journal wrote about the export piece of the conversation, “NAM Chief: U.S. Needs to Stimulate Exports.” Excerpt:

Calculations by the nation’s largest manufacturing trade group show the U.S. ranks last among the world’s 15 largest manufacturers in terms of “export intensity.” Rather than measuring raw export numbers, export intensity gauges the proportion of the nation’s manufacturing production that is exported.

Export powerhouses Germany and Taiwan top the list. But others, including Brazil, Turkey and Spain, also exceed the U.S. in terms of the proportion of their goods that are exported.

“If we could simply get exports up to the world average — which is a little more than two times where it is — we could eliminate the trade deficit,” says Mr. Engler.

Here’s the handout. The methodology is in the extended entry.

From the Peoria Journal-Star:

PEORIA — President Barack Obama is tentatively scheduled to stop in the Peoria area and visit a Caterpillar Inc. facility while in central Illinois on Thursday.

While there’s been no official announcement from the White House about the visit, White House press secretary Robert Gibbs told media members aboard Air Force One on Monday that Obama would stop in Peoria and visit a Caterpillar plant.

It would be the third visit in just more than two years by a sitting U.S. president, including the second one to Caterpillar. Former President George W. Bush visited a factory in East Peoria on Jan. 30, 2007, to give a speech about free trade.

Excellent decision, a stop at a manufacturer that has made cutbacks because of the global recession, including major declines in mining and construction around the world. Nevertheless, Caterpillar remains a case study of why exporting is good for the U.S. economy, and the company has been a strong advocate of free-trade agreements with countries like Peru, Colombia and Panama. The company has been a vocal opponent of “Buy Americans” restrictions in the stimulus bill that could — at least in an earlier form — spark a global wave of protectionism.

President Obama’s trip follows last Friday’s announcement that Caterpillar’s chairman and CEO, Jim Owens, will serve on the President’s Economic Recovery Advisory Board.

In any case, glad to see that President Obama is making a manufacturer one of his early stops during his Administration. It’s definitely appreciated.

* An op-ed in the Chicago Tribune by Jim Owens, “Protection provisions could kill U.S. jobs”