Don't Forget Services: U.S. Ranks #1 in the World
"President Obama called on America to “export more of our goods” in his State of the Union address last month, setting a goal of doubling what we sell abroad in five years. Good idea, but it would have been so much better if he had said “goods and services.”
Editing the president’s speeches isn’t my job, but the missing words suggest that the White House, like much of the rest of the country, hasn’t realized that exports of services are one of America’s 21st-century success stories. We still picture exports being loaded on ships or planes, but overseas sales are today increasingly delivered in person or sent across the Internet.
Exports of American services have jumped by 84% since 2000, while the growth rate among goods was 66% (see chart). America trails both China and Germany in sales of goods abroad, but ranks No. 1 in global services by a wide margin. And while trade deficits in goods have been enormous — $840 billion in 2008 — the country runs a large and growing surplus in services: we exported $144 billion more in services than we imported, dwarfing the surpluses of $75 billion in 2000 and $58 billion in 1992.
President Obama was right to place a new emphasis on exports, but the best thing the administration can do is reduce impediments to trade and then get out of the way so America’s resourceful companies and talented workers can increase their dominance in the global marketplace."
~W. Michael Cox, Director of the Center for Global Markets and Freedom at Southern Methodist University.
MP: A good place to start reducing impediments to trade would be for Obama to move forward on American free trade agreements with Colombia, Panama and Korea, which were signed in 2007, but are languishing into a fourth year awaiting Congressional approval.