The 2011 Trade Numbers Are In: How Are We Doing?
In his State of the Union address two years ago, President Obama set the goal of doubling U.S. exports within five years. With the U.S. Department of Commerce releasing trade statistics for 2011 today, it’s a good moment to ask: How are we doing?
The goal, which had been proposed five months earlier by U.S. Chamber President Tom Donohue, makes sense because it focuses attention across the federal government on the urgent task of eliminating the barriers that too often shut U.S. exports out of overseas markets.
We’ve made some progress. For instance, last October, Congress approved new market-opening trade agreements with Korea, Colombia, and Panama.
But with two of these five years already behind us, how are we doing? Some trends stand out:
- The Headline Numbers: Exports and imports set records (the previous records were set in 2008). For 2011, exports reached $2,103 billion and imports $2,661 billion. For goods, exports were $1,498 billion and imports were $2,235 billion. For services, exports were $604.9 billion and imports were $425.9 billion.
- Doubling Exports: U.S. exports of goods and services rose by 16.6% in 2010 and 14.5% in 2011, near a pace that -- if continued -- will allow the United States to double exports by the end of 2014. However, 2009 was a low bar, as global trade had collapsed in the wake of the financial crisis. The European sovereign debt crisis and slowing growth in several big emerging markets will make maintaining this pace of export growth more challenging over the next three years. The pace of export growth was already dipping late in 2011.
- The Rise of the Rest: As recently as two decades ago, a vast majority of U.S. trade was with the “triad” of Europe, Canada, and Japan. No longer. In 2010, non-OECD countries purchased nearly half (49.8%) of U.S. goods exports. They accounted for a majority of U.S. exports (50.2%) in 2011.
- Americas First: Canada again edged out the EU as the top market for U.S. goods exports in 2011, and the Americas purchased 43.7% of U.S. exports — well ahead of East Asia (24.9%) and Europe (22.2%). Canada and Mexico together accounted for just under a third of the rise in U.S. exports over the past two years. As Ed Gresser at ProgressiveEconomy points out, the $55 billion in extra sales to Mexico alone is identical to the $55 billion in growth to the famous BRIC giants --Brazil, Russia, India, and China -- combined.
- Transatlantic Ties Still Bind: As a single market, the EU remains America’s top trading partner (combining exports and imports), particularly when services are included. Europe’s share of U.S. goods exports fell by just one-tenth of one percent in 2010-2011, despite the boom in exports to many developing countries -- good news considering how important the EU market is to U.S. companies.
- Most Imports from Middle Kingdom: China reaffirmed its position as the top source of U.S. goods imports in 2011 ($399 billion), and it ranks third as a national market for U.S. goods exports (after Canada and Mexico). For the first time, U.S. exports to China topped $100 billion in 2011 ($103.9 billion).
- FTAs Make Big Markets: America’s 17 FTA partners purchased about 41% of U.S. goods exports in 2011 and are the source of about 31% of U.S. goods imports. This is a remarkable performance given that these countries represent less than 10% of global GDP outside the United States. Korea and Colombia are both among the top 15 U.S. export destinations -- so implementing the pending FTAs with these countries, and with booming Panama, will accelerate the already strong growth in U.S. exports to these countries.
- Deficit Grows…: The goods and services deficit was $558 billion in 2011, up from $500 billion in 2010. As a percentage of GDP, the deficit was 3.7% in 2011, up from 3.4% in 2010. The goods deficit of $737 billion was up from $646 billion in 2010. The surplus in services, an area of world trade where the United States excels, rose by $33 billion to $179 billion.
- …But It Isn’t Caused by FTAs… For the past four years, the United States has run a trade surplus in manufactured goods with its 17 FTA partners -- taken as a group -- on top of large global trade surpluses in services and agricultural products. This surplus was closing in on $50 billion in 2011 -- double its 2010 level.
- … As Much As Energy Imports: U.S. net imports of petroleum and related products rose sharply to $326 billion in 2011 (from $265 billion in 2010) -- a sum equivalent to more than half the U.S. trade deficit. Soaring oil prices drove this increase even as the U.S. is becoming less reliant on energy imports. The trade numbers are one more good reason to develop our extensive domestic energy resources.