Weighing the Impact of the National Export Initiative

IMTI Insider - It’s been months since President Obama first announced his administration’s goal of doubling exports over the next five years. In this first four months of 2010, U.S. exports have grown 17% from the same period a year ago. Has his National Export Initiative made an impact?

Formally unveiled by Executive Order in March, the National Export Initiative (NEI) sets forth five administration objectives for doubling exports: improve advocacy on behalf of U.S. exporters, increase access to export financing, reinforce efforts to remove trade barriers, enforce trade rules, and international cooperation of policies leading to sustained and balanced economic growth. Earlier this month, the President released a progress report on the NEI to discuss what actions have been taken in each of these five categories and their effect on U.S. exporting.


The president used that opportunity to also announce the formation and members of his Export Council. The president’s council is composed of business and labor leaders who will offer advice on how to promote U.S. exports, jobs, and growth. James McNerney, president and CEO of Boeing, will be the council’s chairman. Ursula Burns, CEO of Xerox, was tapped to be vice chairman. It is the latest in a series of actions that the administration hopes will show that it is committed to its plan to boost U.S. exports. An Export Promotion Cabinet, made up of cabinet secretaries and other high-level administration officials, is already working on developing and implementing the NEI.

Part of the administration effort to improve the environment for exporting is to significantly reform our current Cold War-era export control policy. National Security Advisor James Jones laid out the administration’s three-phase plan for modernizing the U.S. export control system in a speech last month before the Aerospace Industries Association. (You can view General Jones’ speech on Administration export control proposal.) According to Gen. Jones, implementation of Phase I and II of the reform plan are already in progress, where the focus has been on streamlining the current licensing process and updating and harmonizing the two control lists. Eventually, a new single control list will be created, using a tiered system with the most serious threats (i.e., weapons of mass destruction) at the top tier and then cascading down tiers as technology or product life cycle matures. The aim is to resolve the current jurisdictional disputes between agencies and provide exporters with clear guidelines to follow.

Phase III of the plan establishes a "single licensing agency" (SLA) to replace the divided functions between the Commerce, Defense and State Departments. This independent agency would be run by a Cabinet-level board of directors to include those departments currently involved in licensing decision making. The president would nominate a chairman, subject to Senate confirmation. The announcement of an SLA was welcome news to AMT and other groups that have advocated for a single licensing entity for years. Phase III of this proposal will require congressional legislation to implement.

The President has called on Congress to act on the Phase III of the NEI this year. However, considering the full legislative agenda and the November elections, it is highly unlikely Congress will take this up in 2010. However, it is clear the administration is serious about moving the National Export Initiative and related reforms and will continue to push forward with this effort.