In and Out
June 24, 2014
By Jerry Smith
A couple of weeks ago, I was sitting on a porch overlooking the Charleston Harbor at a channel passage directly across from Ft. Sumter. What I saw was the picture accompanying this article which in some ways was an unusual sight in its visual alignment. If you look closely at the picture you will see a ship loaded with containers heading into the Port of Charleston to be unloaded (imports) and another a ship going in the opposite direction with significantly fewer containers (exports).
Seeing these two vessels led me to write this article, as a follow-up to one previously written about the National Export Initiative (NEI). NEI was vigorously promoted by the Obama administration with the usual fan-fare. Basically, the NEI was touted as the administration’s goal of doubling exports in five years, beginning in 2010. Take note, the year 2009 was a nadir in exports due to the economic downturn, so the base number was rather low with which to begin measurement. The doubling of exports in five years was admirable in its intent, but like so many government announcements and hoop-la, this goal barring some dramatic, if not, remarkable events, “ain’t a- going to happen”.
Let’s take a look at the numbers:
Year Exports/Billions Percent Increase
2010 1.842
2011 2.103 14%
2012 2.195 4%
2013 2.300 10%
Author’s Projections
2014 2.576 12%
2015 2.833 10%
5 yr. goal 3.684 (a short- fall of $851 Billion)
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In export circles and Department of Commerce current promulgations, you will find no further mention of the five year goal of doubling exports. And like any politically driven idea the administration has simply dropped references to the doubling of exports goal and, furthermore, fails to offer any explanation, but amazingly renames the program as if the original idea or ballyhoo never existed. The NEI is now called “NEI/NEXT”. It makes you wonder what happen to “NEI/PREVIOUS”?
O.K., there is nothing wrong with the old college try, but please do not spend taxpayers’ money rolling out programs and spending funds to attain goals that are likely not realizable and then when this fact sinks in, avoid the issue like it is a hot potato that never existed.
Back to the vessels in Charleston Harbor and more information about imports/exports, we find that the primary villain in the trade deficit still rests with consumer goods: Imports/$515 Billion, Exports/$189 Billion. The good news is that beginning in 2011 the U.S. is a net oil-products exporter for the first time since 1949. We are now the 3rd largest exporter behind the EU countries and China. Surprisingly, export services comprise one-third of our total exports (travel, transportation, royalties, finance, etc.). Grand totals of imports/exports for 2013 are $2.744 Trillion and $2.272 Trillion, respectively.
At the risk of being redundant (see this author’s prior columns), exporters are best served by the U.S. government lowering tax rates, working diligently to produce trade agreements that reduce both tariff and non-tariff barriers with our trading partners, and offering export incentives that are practical in nature and driven by the private sector and not some bureaucratic scheme of the day.
For more export/import data, please visit:
http://useconomy.about.com/od/tradepolicy/p/Imports-Exports-Components.htm
Jerry Smith is CEO/Founder of Riverstar International LLC (www.RiverStarInternational.com) and USA eShop LLC (www.WishBoxUSA.co.uk . ). Both companies specialize in exporting. A regular contributor to MidlandsBiz, he can be contacted at [email protected]
