April 29, 2010

HOW IS AN ANTI-TRADE ADMINISTRATION GOING TO BOOST TRADE?

Obama Trade Goals Face Doubts (SUDEEP REDDY, 4/28/10, WSJ)

President Barack Obama's goal of doubling U.S. exports over the next five years will be difficult to meet, business leaders and economists say, because of the lack of momentum on demolishing trade barriers and the shift by more American companies toward producing overseas. [...]

Matthew Slaughter, an economist at Dartmouth's Tuck School of Business, says the majority of U.S. exports come from multinational firms and U.S. affiliates of foreign firms that tend to produce capital-intensive, high-value products. That could limit the employment gains from an export boom. "I could imagine that the employment increase coming from those firms, because they're so productive, would be smaller for a given dollar value of exports" than employment gains from smaller firms, said Mr. Slaughter, who served in the administration of President George W. Bush and is now on a State Department economic advisory panel.

American businesses say they must contend with a long list of disadvantages, from higher tax rates than in many countries to rising costs for benefits such as health care. U.S. producers also say an artificially low Chinese currency makes Chinese goods especially cheap in foreign markets and therefore tougher competitors for American goods.

Posted by Orrin Judd at April 29, 2010 5:37 AM
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