Doubling Exports: A Hemispheric Agenda
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In just the past five years, exports from the United States to the Southern Cone and Brazil have grown 80%—increasing from $40 billion in 2007 to nearly $72 billion in 2011. Using the very conservative estimate by the White House that every $1 billion of exports of American goods supports more than 6,000 additional jobs in the U.S., in the past five years the growth of exports to the Southern Cone and Brazil have created more than 192,000 jobs here at home.
Yet U.S. companies can do better!
Last week the U.S. Chamber hosted a roundtable discussion with the U.S ambassadors to Argentina, Brazil, Chile, and Paraguay as part of Secretary Clinton’s Global Business Outreach. The central theme was how to “promote U.S. businesses abroad, increase U.S. exports, attract new investment to the United States, and create American jobs.”
Among other things, the ambassadors discussed U.S. trade with the region relative to China. For example, in 2008, China edged out the U.S. as the top exporter to Chile, and in 2009 China became the largest exporter to Brazil. However, beginning this past January, the U.S. was able to take back the top spot from China as the largest trading partner with U.S.-Brazil. Two-way trade with Brazil topped $74 billion in 2011.
What explains the reversal?
While Chinese trade with Latin America has fueled a boom in the region’s commodity-export sectors in countries such as Brazil, Chile, Peru and Venezuela, Latin American manufacturing sectors have been badly damaged by expanded competition from Chinese goods. On balance, countries and regions with large manufacturing sectors and limited primary-product export sectors have been hurt by the Chinese growth strategy.
Conversely, 67% of all U.S. goods exported in 2011 were capital goods and industrial inputs, used by importers in Latin America to drive their own manufacturing sectors. The value they add give them the leg-up in the region. Thus, it's no surprise that the two largest growth countries for the United States year-on-year from 2010 to 2011 were Mexico and Canada, our closest neighbors, markets providing absolute U.S. export growth of $34 billion and $32 billion respectively—an increase greater than the size of our total exports to our 10th largest trading partner.
Doubling exports starts here in our own Hemisphere, and it starts by recognizing and promoting what we do best!