As President Obama wraps up his bus motorcade today in Western Illinois, he’ll find himself in proximity to one of the few bright spots of a recovery so halting it still feels like a recession: exporters.
Exports have been a quiet hero during the last few years. While comprising only 13 percent of the economy, the export sector contributed 44 percent to the growth of the economy last year. Two-thirds of U.S. exports in 2010 came from the manufacturing sector, with transportation equipment maintaining its dominance among U.S. exporting industries.
As a result, exports play a major role in places that are manufacturing intensive, especially in small and medium size metropolitan areas. For example, more than one in five dollars of Peoria, Illinois’s economy comes from exports. Peoria’s contribution to Illinois’ exports is almost double than its share of population.
But exports do not contribute only to economic growth; exports generate jobs and pay better wages. In 2008, 10.3 to 11.8 million jobs were supported by exports in the United States. Leading export industries, such as machinery manufacturing in Peoria, Illinois and Davenport-Moline-Rock Island, Iowa-Illinois metropolitan areas, paid better than the national average salary in 2010. Growing exports is a recipe for a job-filled recovery because it takes advantage of new sources of global demand.
President Obama has demonstrated his commitment to exports through the National Export Initiative (NEI), which is a platform that provides help for state export promotion programs and more credit and technical assistance for globally-minded small businesses. However, the administration needs to go further given the recent slowdown in exports and fears of a double-dip recession. It is time to take the NEI to the ground and provide federal support for metropolitan areas to incorporate export strategies in their economic development plans. The local and metropolitan leaders, private and public, can best prioritize limited resources and help businesses in the reorientation of their activity to serve foreign demand.
Now is more important than ever to open new foreign markets to U.S. businesses. President Obama and Congress should work together to pass immediately the free trade agreements with South Korea, Colombia and Panama. While the United States is wavering on one of its largest free trade agreements in the last two decades, the European Union (EU) and other developed countries are seizing the moment. For example, the European exports to Korea increased by 34 percent last month after the free trade agreement between South Korea and the EU went into effect on July 1.
Atkinson and Alpha are key drivers of the agriculture business in Illinois, but they also are part of the Davenport-Moline-Rock Island metropolitan area, a regional economy stranding across state lines. They are an intrinsic part of what drives America and American exports, our metropolitan areas. This is high time for President Obama and Congress to help our businesses and metropolitan areas to achieve the national goal of doubling exports in five years.
[On the ongoing trade negotiations] If we’re serious about resolving the core issues that the U.S. has with China, then this is going to be a way station that’s going to require a lot more continued focus by the administration for a number of months if not years.