On a cold day some four years ago, with the economy in recession and jobs in free fall, our nation inaugurated a president with hope on our faces and change in our hearts. Since then the positions of our legislators have hardened, and their singular achievement in four years has been brinksmanship: It took a 778-point drop in the Dow Jones Industrial Average, triggered by the House's rejection of a $700-billion bank bailout, to bring Congress to its senses. Not one budget has been passed in four years. The last time the federal debt ceiling came up, Washington played chicken until a market swoon. Now we just went down to the wire on the fiscal cliff, narrowly averting disaster and still staring at the uncertainty of agreeing on a long-term federal debt ceiling. In such an environment is there a common ground, something we can agree on that helps the country as a whole? I believe there is: global trade.
Though divided by ideology, we are united as Americans in our desire to restore economic growth and create jobs. Few issues bring Democrats and Republicans together as global trade does. To grow, American businesses must be more commercially engaged globally and must establish a bigger footprint in faster-growing emerging markets. Minimally we must provide at least the support that export powerhouses China, Germany and the UK provide their businesses. Ideally we should do more. This requires government support, particularly for small and medium enterprises (SME). Businesses expect predictable policy and need support to establish global partnerships, from distributorships to joint ventures. They need to be able to access competitive financing, compete in public procurement projects and consummate global deals. And this support is required now, not sometime in the future. The reality of our times is that all exporting countries are targeting the same faster-growing markets and an emerging middle class today, not in the future.
The Obama administration's focus on export during the first term paid off. Exports have grown from 11 percent to 14 percent of GDP and helped create jobs. The administration secured the passage of the free trade agreements with Panama, Colombia and South Korea that were initiated under the Bush administration and established a platform for future growth. In his second term the president must emphasize execution over policy and charge his administration to work with business to help increase export revenue now. Success must be measured annually in terms of the improvement in U.S. share of global exports. This will entail redeploying resources, people and program funding in Main Street America and markets around the world, and not in the corridors of D.C.
For too long, successive administrations in Washington have emphasized policy over execution, and bureaucrats have coveted the mantle of policy maker and diplomat over being "America's sales force." Germany and the UK, not to mention China, have emphasized export promotion over trade policy, pursued business deals and inward investment that create local jobs and relied on the U.S. to do the "heavy lifting" on policy issues like intellectual property rights, corruption and trade barriers. China, Germany and the UK have quietly gone about winning market share battles while letting our policy armies fight the war. With the emphasis on promotion, the UK has 2,400 trade specialists supporting business exports and securing inward foreign direct investment. Germany's public-private model allows 2,700 trade specialists to help their businesses win in the marketplace. By comparison, between the U.S. & Foreign Commercial Service at the Department of Commerce and the Foreign Agriculture Service at USDA, the U.S. has fewer than 1,800 trade specialists providing frontline support to our businesses, a number that has steadily decreased over the years. Almost 3,000 people are directly engaged in trade policy development and enforcement. How many armies do you know that have more generals than soldiers?
Global trade minimally entails data collection, policy making, negotiation, financing, promotion, regulation and enforcement. Some argue that developing global markets runs the gamut of aid to trade. However we look at it, myriad government agencies touch this space, often overlapping. This presents the opportunity for a double whammy: cutting costs, program spending and duplication and beefing up business facing support. We need boots on the ground and investing in technology to reduce manpower intensity and enable a self-service portal; these help connect U.S. businesses to global opportunities and help ring transactions. Earlier this year President Obama proposed the reorganization of trade-related agencies that could save $3 billion over 10 years and eliminate 1,000 to 2,000 full-time equivalent jobs in a couple of years. Not much has happened since. When it comes to policy and negotiation, small is beautiful. The Office of the Unites States Trade Representative is successful because it is small and focused.
The opportunity exists to redeploy our resources and get the better bang for the taxpayer buck not by spending more but by stewarding our resources better. We must help U.S. businesses secure revenue, profit and market share today before playing the role of global cop. We need to keep a laserlike focus on investing in programs that help put Americans back to work and help American companies grow their share of global exports. And in businesslike fashion, trade-facing agencies must annually report the exports that they directly facilitated and America's share of global U.S. exports.
Global trade and a results-based approach to all trade policy and promotion spending can deliver savings and better export results.
This blog post is part of a series produced by The Huffington Post and the George Washington University that closely examines the most pressing challenges facing President Obama in his second term. To read the companion article by HuffPost's Mark Gongloff, click here. To read the companion blog post by Dennis M. Kelleher of Better Markets, Inc., click here. To read all the other posts in the series, click here.
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