What is in this article?:
- Time to pull US back from export cliff
- Troubling data
- Farm exports have been a bright spot. USDA recently predicted that they would reach $145 billion this year, which is more than $9 billion above last year’s total. But, looks can be deceiving. In October, U.S. exports plummeted, not just in agriculture but across every major category of trade.
You shouldn’t compare apples and oranges. Everyone knows that.
So does is makes sense to measure apple exports by counting oranges? Of course not. And yet this is precisely how the United States measures and is reporting its progress in trade policy.
That’s because we compute the value of our trade in dollars, when the most important measurement should be volume; the actual amount of products we sell to others.
Fixing our calculations will serve our long-term interests in trade, and possibly even help us avoid the fiscal cliffs in our future.
The United States hasn’t enjoyed very many economic success stories recently. Joblessness remains high, growth is stagnant, and now our President and Congress are engaged in a high-stakes game of political chicken over taxes and spending.
Amid all the gloom, farm exports have been a bright spot. The Department of Agriculture recently predicted that they would reach $145 billion this year, which is more than $9 billion above last year’s total. Even more impressive is the fact that it’s an all-time record.
So that’s good news. Except that even here, looks can be deceiving. In October, U.S. exports plummeted, not just in agriculture but across every major category of trade. They declined by 3.6 percent in the largest month-to-month drop since January 2009.
That month was significant because it marked the beginning of President Obama’s administration. A year later, as he and the rest of us struggled through America’s ongoing slump, he made an important promise in his State of the Union address: In five years, he said, U.S. exports would double.
This pledge involved an interesting measurement “trick”: For a baseline, he chose a year in which exports had hit rock bottom, following the global economic downturn. The regular turnings of the business cycle all but guaranteed a rebound. For a couple of years, it looked like President Obama might make good on his export pledge. A goal that all of us want him to achieve.
This year, however, trade leveled off. We’ll be lucky if it comes anywhere close to doubling by 2015.