For Release Friday, August 23, 2013
Speaking last month at Knox College Galesburg, Ill., President Obama began to try to refocus the American public on the economy. His attention to the need for competition in a global economy was welcome. Global trade is more than a national issue; it’s vital, as well, for healthy metro regions to be prepared to compete internationally.
The slow rebound from the recession and the even slower return to low unemployment levels continue to plague the country. Obama attributed the loss of jobs to new technology and, he said, “Global competition sent jobs overseas.” He outlined what’s needed to compete and said, “The countries that are passive in the face of the global economy will lose the competition for good jobs and high living standards.”
But central to the national debate on fixing the economy is the role of government. Where does the country set the rheostat between a totally free market economy and an activist role for the government in ensuring economic success? And this question is even more difficult as we face global competition for jobs with countries like China, which have industrial policies.
The Obama administration realizes that a large trade deficit and the flow of jobs overseas require an assertive policy. But is the public in agreement?
For years the American public has not seen global trade as in our interest – although polls show an uptick this year. (See Pew Research Center poll in 2010 here, and see a Gallup poll from February 2013 here.) One example: Since mid-2007, Presidents George W. Bush and Obama have had no fast- track trade authority, letting them negotiate international agreements needing only an up or down vote in Congress.
The American public and some of their congressional representatives had better learn the new realities – and continuing to expect both jobs here at home as well as plentiful access to cheap imported goods is unrealistic.
The Brookings Institution’s Bruce Katz, in the new book, The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy, notes that exports comprise 31 percent of Canada’s GDP, 25 percent of China’s GDP and only 14 percent of ours. My Citistates colleague Neal Peirce has made the case for more than 30 years that our national success is tied to the success of our metropolitan areas, large and small.
The 100 largest metros make up 12 percent of our land area, 65 percent of our population and 75 percent of our GDP. They also generate a large share of exports. Recognizing the importance of metro areas, the U.S. Department of Commerce has begun a Metropolitan Export Initiative, active today in Los Angeles, Minneapolis, Syracuse, N.Y., and Portland, Ore.
President Obama in his 2010 State of the Union address proposed a National Export Initiative, and doubling our exports in five years. But long-term lack of public support for global trade puts conservative Republicans who support free trade in a box; they must show the government is helping U.S. companies penetrate difficult international markets, while also rejecting the role of a strong government. Further, I am not sure either party fully understands the strategy, tactics and tools our competitors are wielding. And even if we don’t want to copy their techniques, we had better understand them.
The American view that we have the best economic system, plus a strong belief that government should get out of the way, masks this cold reality: Many of our competitors view the world differently. Other countries analyze their imports and aggressively build new industries to reduce their overseas dependence. Many of the customers for U.S. companies, such as airlines or utilities, are state-owned or -controlled. Outside the U.S., it’s common to attract investment with massive government support. National agencies from other countries meet with U.S. companies, offering packages to relocate production and jobs to their country. And when a U.S. company moves its production overseas, what used to be a U.S. export can become an import.
An eye-opening study tour for congressional representatives would be to visit Dalian, China’s software complex of companies and universities. Then they’d visit the production facilities for China’s new C919 aircraft, which will compete against the Boeing 737, and then tour KAIST, Korea’s version of MIT in Daejeon, Korea, and the nearby national research facilities and high-tech park.
In the mid-1990s, Congress reauthorized the Export Import Bank and required an annual National Export Strategy. That strategy is developed in a conference room at Commerce. A few years ago, I called a colleague at Commerce to ask why there were no field hearings to develop the strategy. He said, “Bill we knew someone outside the Beltway read the strategy, and we always wondered who it was.”
I pointed out that the process of developing the strategy might be as important as the strategy itself.
In Seattle, studies show, 40 percent of the jobs in our region are tied to the international economy. But every region needs a metropolitan export plan. The new Commerce secretary, Penny Pritzer, would be wise to suggest to the president that the 2014 National Export Strategy should be prepared by visiting Seattle, Miami, Boston and other cities and asking people there what it should contain.
That tour might even start in Boston, home of that famous early protest against unfair international trade practices – the Tea Party.
Bill Stafford, a member of the Citistates Group, was president of the Trade Development Alliance of Greater Seattle for 20 years. Before that he held several senior positions in Seattle city government.
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