Obama's Trade Fantasyland:
Lack of Exports to Mercantilist East Asia Is America's Fault
by Alan Tonelson
Sarah Palin has drawn howls of derision from sectors of the commentariat for remarks like her claim that Alaska’s proximity to Russia gave her “very significant” foreign policy experience as governor of the state. But after some of his remarks on U.S.-Asia trade this week, much more – and better deserved – criticism should be directed toward President Obama.
Consider his November 23 contention that Asian countries “want our [export] products,” and that American sales to the region are subpar “partly because we just haven't been as aggressive as we need to be.” These remarks rank among the most egregiously inaccurate, manipulative, misleading, and downright whacky statements ever to come out of any recent free trade-loving White House.
The President’s assessment is all the less excusable because he’s just back from a week-long trip to the region – and apparently learned nothing. His views, moreover, are all the more disturbing because, unlike Palin, he’s running American economic and trade policy, as well as the rest of the government.
If the Asians really are interested in buying U.S. exports, they have a funny way of showing it. U.S. goods exports to Pacific Rim countries – the vast majority of total U.S. exports – were indeed up
about 75.50 percent from 1998 to 2008, before plunging 24.9 percent on a year-on-year basis so far in 2009. During the same period, however, U.S. goods exports to the world as a whole grew faster – by 84.31 percent – and their 2009 fall-off was only negligibly greater (25.0 percent).
Asia’s appetite for American products looks even less impressive upon digging below the surface. After all, the region has been the world’s fastest-growing for years. Therefore, its purchases of U.S. goods should be increasing considerably faster than those by other countries, not more slowly.
Worse, much of what Asia imports from the United States is not consumed in Asia. It consists of intermediate goods of various kinds – chiefly parts and components of finished goods – that are further processed and assembled and then often shipped right back to the United States. The Asian “customers” for these products are Asian factories, many of which are performing work once done in the United States by domestic companies and American workers.
Another big chunk of Asian imports from the United States consists of capital equipment that builds and equips the factories and infrastructure systems making up the export bases of these export-oriented economies. So Asian imports from the United