Transcript The National Export Initiative: Doubling Exports

The National Export Initiative:
Doubling Exports
Mark Doms
Chief Economist, Department of
Commerce
1. Doubling of Exports
– How realistic? It’s a “goal”
– What are the main factors behind export
growth?
2. Exports and the number of jobs
– Need to increase exports just to tread water
– 2 million job estimate is conservative
3. Exports and the quality of jobs
– Robust findings on exporting/wages, “good
jobs”
1. Doubling Exports
Exports of Goods and Services
Percent change from five years ago
40
20
20
0
0
200
199
197
196
201
4
40
9
60
200
4
60
199
9
80
4
80
198
9
100
198
4
100
9
120
197
4
120
196
9
140
4
140
195
9
160
195
4
160
1. Doubling Exports
The NEI stated that the goal was for exports
to double over the next 5 years.
• Refers to “nominal” exports
• The base year for doubling is 2009, a year
in which exports fell 14.4 percent, so a
much lower base
• What does “science” say?
– Results range from 60% - 90% growth
– So “doubling” is a “goal”
1. Doubling of exports
Exports of Goods and Services
Percent of GDP (GNP prior to 1929)
20
20
15
15
10
10
5
5
10-year averages for 1869-1898 period
0
1869 1879 1889 1899 1909 1919 1929 1939 1949 1959 1969 1979 1989 1999 2009
0
1.
Doubling of Exports: Important factors
Foreign growth, exchange rates, and government actions
Real GDP Growth in Foreign Countries
Percent change from year-ago level
15
15
China
10
10
Other developing countries
5
5
0
0
Advanced economies excluding the U.S.
-5
1992
1994
1996
1998
2000
2002
2004
2006
2010 to 2014 are forecasts by IMF (July 2010)
•On average, average growth expected
•Risks
2008
2010
2012
2014
-5
1. Doubling of Exports: Exchange Rates
Trade-weighted Value of the Dollar
Relative to major currencies, index 2005 = 100
180
180
160
160
140
140
120
120
100
100
80
80
60
1980
1985
1990
1995
2000
2005
2010
60
Shaded area denotes recession. End of current recession tentatively placed in July 2009.
1. Doubling of Exports: Exchange Rates
Exchange Rates
Index January 2005 = 100
120
120
Yen/dollar
110
Euro/dollar
100
100
90
80
110
90
Yuan/dollar
2005
2006
2007
2008
2009
2010
80
1. Doubling of Exports: Government actions
Direct assistance to firms
• Help address non-tariff barriers
• Help reduce the fixed costs of exporting
– Information
• Increases in the budget of Departments of Commerce
and Agriculture; Ex-Im Bank; SBA’s export programs
Promoting a better export environment
• Messaging to public
• Reduce formal trade barriers
2. Exports and the Number of Jobs
Jobs Supported by Exports of Goods and Services
Millions
12
12
10.3
10
8
7.4
7.8
10
9.5
9.2 9.0
9.2
8.8
8.8
8.6
8.5
8.9
7.8 7.6
8.5
7.9 8.2
8
6
6
Non-manufacturing jobs
4
4
2
0
2
Manufacturing jobs
1993
1995
1997
1999
* 2009 is a preliminary estimate.
2001
2003
2005
2007
2009*
0
2. Exports and the Number of Jobs
Value of Exports per Job: Total Exports
Thousands of dollars
300
300
2009-2015 are forecasts.
235-245
250
250
175-185
200
200
165
150
150
124
100 84
99
100
50
0
50
1993
1998
2003
2008
Estimates compiled by Office of the Chief Economist
2013
0
2. Exports and the Number of Jobs: Don’t forget
about imports
U.S. Current Account Balance
Relative to GDP
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Shaded area denotes recession. End of current recession tentatively placed in July 2009.
-8
3. Exports and the quality of jobs
What is a “good job”? Often defined by
wages
“Exporter Wage Premium”
• Manufacturing plants that directly export pay
about 17 percent higher wages than plants that
do not directly export.
• Workers employed in export-intensive
manufacturing industries pay about 17 percent
more compared to the average for all persons
employed in manufacturing.
• Estimates from a different source suggest a 13
percent premium.