Obama Plans to Create Millions of Jobs by Doubling Exports

cargo ship Commerce Secretary Gary Locke on Thursday is expected to outline details of an ambitious plan to double U.S. exports to $2 trillion by 2015. The goal, first highlighted in President Barack Obama's State of the Union address, aims to help struggling farmers and small businesses distribute more of their goods and to add 2 million jobs to the depressed U.S. labor market."We have to seek new markets aggressively, just as our competitors are," Obama said when he announced the National Export Initiative. "If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules."

Getting there may be not be as easy as it seems. Although U.S. exports are on rise, surging 18.1% in the fourth quarter, the U.S. must still navigate through stalled trade agreements and manage concerns about how the plan will affect real jobs growth.

Stalled Trade Agreements

Opening up to more emerging markets may be key to getting the program off the ground. But before we even think about new trade agreements, let's not forget already wobbly China-U.S. relations, which have been on an uneasy path for months. Most recently, China was up in arms over a $6.4 billion defense systems deal between the U.S. and Taiwan. Friction has remained between the Mainland and the island since a civil war allowed Taiwan to separate from China more than half a century ago.

The U.S. and China have also traded barbs about product quality on goods ranging from tires to chickens to cars. Most recently, the two nations have sparred over Google's threat to pull out of China. But as two of the biggest economies in the world, it behooves both China and the U.S. to work it out.

Locke, who is Chinese-American, will be a key figure. During his governorship in WashingtonState, he was able to strengthen economic relations with China. In a couple of months, he will lead the Obama administration's first cabinet-level trade mission when he visits China and Indonesia in May.

But moving past China, it's also time to consider whether stalled agreements with countries like Panama, South Korea and Colombia that were negotiated during the Bush administration will get the green light. Any future agreements and how the administration's stance on NAFTA may change will be certainly be something to watch. But new deals may face an uphill battle in Congress.

And what might happen next with Cuba? After decades of strict embargo and travel restrictions, Obama last year eased travel rules to the Caribbean nation. Could an embargo lift be next?

What Happens To The U.S. Dollar?

Some analysts have been concerned that in order for the initiative to be a success, we would have to get comfortable with prolonged weakness in the U.S. dollar. In an interview with Reuters, Locke assured that the U.S. is"not counting on the low value of the dollar in order to achieve this goal."

Small businesses have long been viewed as a vital force for creating jobs but many fell on hard times during the economic downturn. And strapped by tighter lending standards, millions were forced to slash jobs in an effort to cut costs. But with a 10% unemployment rate haunting millions of Americans, the export plan marks the administration's latest effort to boost jobs growth and aid small businesses.

Noting on Tuesday that "65% of all new jobs in the last decade" were made possible by small businesses, Obama proposed a $30 billion TARP program to jumpstart lending. While both are viewed as strategies that have the potential to add jobs, just how many remains to be seen. One Washington Times analysis suggested that "Just as more earnings only boost wealth if they exceed or grow faster than spending, more exports only create more jobs on net -- the only way to reduce unemployment -- if they exceed or grow faster than imports. In other words, doubling exports won't create jobs if imports double along with them."

Stay tuned for the full announcement at 1 p.m. EST and an exclusive interview with Locke later today.

Read Full Story
  • DJI28335.57-28.09-0.10%
  • NIKKEI 22523516.5942.320.18%
    Hang Seng24918.78132.650.54%
  • USD (PER EUR)1.190.00420.36%
    USD (PER CHF)1.110.00340.31%
    JPY (PER USD)104.72-0.1200-0.11%
    GBP (PER USD)1.30-0.0042-0.32%

From Our Partners