Friday, January 29, 2010

Obama's ambition to double exports

U.S. President Barack Obama delivers his first State of the Union speech to a joint session of the U.S. Congress on Capitol Hill as Vice-President Joe Biden and House Speaker Nancy Pelosi applaud.

With much of his platform under strain, President Barack Obama's first State of the Union speech this week was a closely watched affair. To the surprise of some, Mr. Obama declared he would be staying the course on his most controversial policies in health care, climate change and deficit spending.

But he did signal a new commitment in one area of great interest to Canada. The President pledged to double his country's merchandise exports over the next five years. “We need to export more of our goods,” he said, promising two million new jobs in this sector. “We have to seek new markets aggressively.”

While Canada is a serious competitor to the United States in many foreign markets, Mr. Obama's vow should be seen as very good news. If he intends to get serious about exports, the President is also going to have to get serious about imports as well. And that means fighting protectionism with rather more effort than we have seen so far

From a statistical point of view, the recent collapse in global trade may make Mr. Obama's challenge somewhat easier. On a January-to-November basis (the most recent figures available), American goods exports fell from $1.2-trillion (U.S.) to $947-billion between 2008 and 2009. A large part of any doubling will simply be catching up to previous levels.

Nonetheless, the President will face substantial challenges in expanding trade. And the biggest obstacle is Congress.

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