Obama Touts Exports

President Barack Obama spent today on the West Coast, appearing at two fundraisers to build his war chest for this year’s presidential campaign and making a stop at Boeing’s Dreamliner plant in Everett, Washington.

While at Boeing, the president announced new steps to help U.S. exporters obtain the financing they need to sell their products overseas. These initiatives fit the economic message he’s trying to sell to voters: Things are getting better, but we’ve still got a ways to go to create an economy that’s “built to last” and offers everyone a “fair shot.”

“That blueprint starts with American manufacturing,” he said.

That blueprint also includes helping U.S. companies sell their products overseas. Two years ago, Obama set a goal of doubling U.S. exports in five years. It looks like the U.S. may achieve that goal—U.S. exports in 2011 were 34 percent higher than they were in 2009.

“I will go anywhere in the world to open new markets for American products,” Obama said.

To sell in those markets, American companies often need help from the Export-Import Bank, which provides direct loans, credit guarantees, and credit insurance for U.S. exporters. Today, the president announced that Ex-Im is launching a new program to help small businesses get short-term working capital lines of credit of up to $500,000. This could help small exporters access up to $100 million in capital.

The president also indicated that he’s willing to fight dirty when it comes to export financing.

“I’m also instructing the bank to give American companies a fair shot by matching the unfair export financing that their competitors receive from other countries,” Obama said.

But these new tools for the Export-Import Bank won’t help much if Congress doesn’t reauthorize this agency.

Ex-Im’s current authorization expires May 31. But because of record demand for export financing, it likely will hit its $100 billion lending ceiling by the end of March. Unless that cap is raised, the bank will be forced to stop making loans. The president urged Congress to quickly reauthorize the agency and raise its lending ceiling.

Much of the business community is behind the president on this issue. Fourteen business groups, ranging from the Aerospace Industries Association to the U.S. Chamber of Commerce, sent a letter to members of Congress this week urging them to reauthorize Ex-Im and raise its lending cap. The National Small Business Association signed on and for good reason: Small businesses account for 87 percent of Ex-Im’s transactions.

But most of Ex-Im’s dollars go to big businesses. Boeing, for example, has used Ex-Im financing to sell 460 aircraft worth $60 billion to overseas buyers over the past three years.

This is where things get tricky. Yes, these deals boosted Boeing’s sales, and saved or created jobs in the U.S. But they also boosted foreign airlines, sometimes at the expense of U.S. airlines. As the Washington Post pointed out today, Ex-Im support for Boeing’s sales of airplanes to Air India enabled that airline to start nonstop service between New York and Mumbai. This new competition was too much for Delta Air Lines, which was forced to drop that route.

Plus, Obama may be overstating the job-creation potential of exports. Alan Tonelson, research fellow for the U.S. Business and Industry Council, contends increasing exports alone won’t be enough to close the trade deficit. That won’t happen “without import restrictions and other fundamental changes in America’s trade policies,” he said.

“The president’s new focus on manufacturing and insourcing looks suspiciously like an election-year ploy,” Tonelson said. “Prioritizing manufacturing three years ago, and in an effective way, would have produced more healthy growth and good jobs than health care overhaul or the gimmick-laden stimulus bill.”

---

Kent Bernhard Jr. is News Editor of Portfolio.com