Dan Drezner was pretty unimpressed with the tiny part of last night’s State of the Union speech devoted to foreign economic policy. He deconstructs it here:
1) “We will double our exports over the next five years…” Well, the President said this would happen, so it must be so!! I would humbly request that the president also decree that the pull of gravity be cut in half. The government has an equal chance of making that happen.
2) “we will continue to shape a Doha trade agreement that opens global markets…” The key word there is “shape.” I have every confidence the administration will do this, because they make this pledge in every communique they ever issue. It’s a tradition now, like playing “Hail to the Chief.” Play the music, pledge to work on Doha, and then go about your business.
3) “we will strengthen our trade relations in Asia and with key partners like South Korea, Panama, and Colombia.” You mean, by ratifying the three trade agreements that have already been signed and negotiated? Oh, you don’t mean that? Well, never mind, then.
Even though last night’s SOTU was obviously going to be heavily focused on domestic issues, I too was surprised by the almost perfunctory attention paid to foreign policy. But I can’t say that I was surprised by the perfunctory attention paid to foreign economic policy. Dan says, “I would have liked to have seen a more robust effort to link foreign policy priorities to domestic priorities — because the two are more linked than is commonly acknowledged” — and I suppose that’s true. But honestly, there’s only so far the professor-in-chief can go. Obama was doing a lot of explaining already last night, and trying to explain to a weary audience why they should care about exchange rates and current account deficits just wasn’t in the cards.
But I’ll go further: Dan should have been pretty happy with the speech. Obama might not have done much to advance that cause of trade liberalization, but in the middle of a deep recession and following an election whose message was “Americans are hurting,” there was no chance of any non-suicidal president doing that. In fact, a bit of populist protectionism would have been the obvious crowd pleaser. The fact that Obama supported trade agreements even briefly, even just rhetorically, was actually a pretty big win for free traders like Dan.
On the other hand, I too was….fascinated….by Obama’s out-of-the-blue pledge to double U.S. exports over the next five years. Where did that come from? And how does he plan to do it? According to Obama, the answer is a “National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.” That line about reforming export controls received perhaps the most tepid round of applause ever in a State of the Union address, I think, as a few people tentatively started to clap and then almost instantly stopped — probably because they realized they had no idea what that meant. Me neither. Streamlining export controls is certainly a good idea, but as far as I know there’s nobody who thinks this is something that’s seriously dampening U.S. sales abroad.
Of course, there is a time-tested way to double U.S. exports: adopt an assertive policy of weakening the dollar. That might do it, as long as the rest of the world decided not to retaliate. But it’s also vanishingly unlikely, so I really don’t know what Obama has in mind. I guess we’ll just have to wait and see.