Overall growth is expected to be about 3 percent this year before jumping to 4.3 percent for the following two years.
The report by the Council of Economic Advisors says U.S. exports are expected to rise rapidly as the global economy recovers in much the same way trade fell faster than gross domestic product during the recession. It talked about the benefits of strengthened trade ties with countries in East Asia because their fast-growing economies will lead to more demand for U.S. goods, especially as they try to stimulate more domestic consumption and investment.
'Some nations with large current account surpluses took steps to increase domestic demand during the crisis, and these efforts must be maintained and expanded if world growth is to rebalance. It is not a given that such a transition will take place. Concerted policy action will be needed, but if saving falls in countries with current account surpluses and spending rises, that should stimulate U.S. exports as well as take pressure off the U.S. consumer as an engine of world growth,' the report said.
The White House noted that a positive development from the financial crisis is that nations, for the most part, did not resort to protectionism, which helped prevent unemployment in the United States from getting worse. U.S. imports of goods and services fell 34 percent and exports dropped 26 percent from July 2008 to April 2009. From their peak in the third quarter of 2008 until the trough in the second quarter of 2009, the nominal value of exports fell more than $400 billion, or almost 3 percent of GDP.
President Obama in his State of the Union speech set a goal of doubling exports within five years and the report reiterates the White House's interest in pursuing free trade agreements, especially a regional transpacific agreement. It also maintains the need to enforce trade rules in existing agreements and lists actions the administration has taken to pry open other markets.
To date, however, there has not been any push to get Congress to approve three pending bilateral trade agreements. ' Eric Kulisch
