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HotPix 2010
MR's Annual look at interesting companies that might be under your radar, as published in the April 2010 issue. Click here to browse.
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There's been a lot of rhetoric by President Obama over the last week or so about the intrinsic link between US economic recovery and job creation and trade.
And in perhaps the most sure sign yet of the Administration's commitment to this goal, it has put its money where its mouth is - not easy when the national debt stands at more than $12 trillion - and hiked the International Trade Administration's budget by 20%.
It's allocating more funds to trade enforcement and export promotion, including the launch of a National Export Initiative (NEI) to help enforce free trade agreements with other nations, and eliminate barriers to sales of US products.
Surprisingly, the moves are the first concrete steps this administration has made towards an articulated trade policy after more than a year in office. However, it remains to be seen whether it will be a consistent trade policy and whether the new strategy fully embraces trade liberalisation.
As one industry executive lamented to just-style recently: "They talk in terms of expanding export opportunities as a way to create jobs, yet the first time they were presented with a policy decision they restricted trade."
This, of course, refers to the decision in September 2009 by the President to implement a special import safeguard provision to impose tariffs on imported tyres from China - igniting concerns among US apparel retailers and importers about the prospect of a new trade war.
The language in the National Export Initiative makes it clear one of its main goals is "the rigorous enforcement of international trade laws to help remove barriers that prevent US companies from getting free and fair access to foreign markets."
But this, too, leaves plenty of room for interpretation on whether the administration will embrace the trade liberalisation or protectionist route. The US already has a pretty impressive track record when it comes to protecting its interests, and apparently filed a new antidumping or countervailing duty petition once every 10 days during the last year.
And there has been little more than a vague commitment to complete three outstanding free-trade deals with Colombia, Panama and South Korea. While Mr Obama praised the idea of stronger trade ties with these countries in his State of the Union address, there was no mention of them in the NEI.
Industry observers also point out that some of the key trade appointments are still vacant. While the United States Trade Representative - the agency responsible for supervising trade negotiations - is largely staffed, there are no trade officials in place yet at the Dept of Commerce, they say.
And crucially this means there's no-one there to make decisions or fight some of the battles that may lie ahead.
There are also trade groups - most notably in the US textile sector - who will seize on calls to remove barriers to exports and unfair competition as an excuse to petition the US government to take action specifically against China.
Currency manipulation by the Chinese government and other actions to boost exports, including export tax rebates, have long been seen by US fabric and yarn makers as leaving them at a severe disadvantage, not to mention contributing to the loss of US manufacturing jobs.
And it's an opening the US textile industry may seek to take advantage of.
So it's by no means clear-cut that US talks of expanding export opportunities will necessarily lead to a more open attitude to trade.
But maybe a good place to show its true intentions is in negotiations on the Trans-Pacific Partnership (TPP), the first regional agreement in which the US would participate in Asia.
The first round of talks is in Australia in March, with the US hoping to craft a platform for the agreement with seven other countries: Singapore, Chile, New Zealand, Brunei, Australia, Peru and Vietnam. Perhaps then its true colours will be revealed.
Click here for more details on the National Export Initiative.
