Does it make sense to measure apple exports by counting oranges? Of course not. But this is how the United States measures and reports its progress in trade policy. That’s because we compute and report the value of our trade in dollars, when the most important measurement should be volume — the amount of product we sell to others.
This year, trade has leveled off. It’s going to be difficult for President Obama to make good on his pledge to double U.S. exports by 2015. To complicate matters, we’re measuring in dollars instead of volume. While U.S. export dollar values have gone up, currency valuations mask the true story. This is where the data are more troubling.
Farm exports have been a bright spot. The Department of Agriculture predicted that this year’s farm exports will be $9 billion more than last year’s. However, the total volume of farm exports will be about 119 million tons this year, well below recent levels.
One of the best ways to improve export volume is through policy — rules at home that allow farmers and businesses to thrive, and trade agreements that allow goods and services to move freely.
A central dispute between the White House and Congress in the “fiscal cliff” standoff involves spending. Properly understood, exports can act as a stimulus without adding debt. More trade would create jobs and economic growth at no cost to the public treasury, especially if we strive to increase our sales volume, not just the sales value.
Rockwell City, Iowa