As we reported last week (see here and here), corporate lobbyists seem none-too-happy at the release of our report, "Lies, Damn Lies and Export Statistics." In the report, we show that the export growth rate to our trade pact partner countries is significantly lower than that to other countries.
The Chamber of Commerce responded by citing a number of statistics from the GAO that they argued undermined our case. But not only did the GAO conduct a very different exercise than our own, but it turns out that the Chamber was selectively quoting the GAO study, which actually makes a number of very damaging points about our FTAs with Jordan, Morocco, Chile and Singapore.
How was the GAO study different? First, they did not compare the entire batches of FTA and non-FTA countries, but just plucked four of the FTA partners. Second, they did ask a question we didn't ask, which is what happens to the United States' market share in our FTA partners after implementation.
You can find the original report here, but let me pull out some interesting quotes from the report that you won't find on the Chamber's blog, after the jump...
Since the FTA was implemented, the trade balance for the United States went from a trade surplus of $110 million in 2001 to a trade deficit of $234 million in 2008. Two-way trade between the two countries went from $568 million in 2001 to $2 billion in 2008, a 259 percent increase in total trade. While U.S. exports increased by 167 percent from 2001 to 2008, total imports from Jordan after the agreement shot up by 397 percent... Overall U.S. market share in the Jordanian market since implementation of the FTA has decreased somewhat...(Page 86)
And the U.S.-Singapore FTA:
... the U.S. share of total world exports to Singapore has declined since 1999, from 17 to 12 percent, as the trend has continued into the post-FTA period... (page 97)
Moreover, the GAO dips its foot into comparative analysis, finding that:
To assess the growth of services trade overall, and in the context of the FTA, we took an average of the levels in 2001 through 2003, the 3 years prior to the FTA, and compared it with 2007 levels. The total (all countries) U.S. exports of services are almost 71 percent higher, and U.S. imports of services have grown 61 percent. The overall U.S. trade surplus in services in 2007 was nearly $139 billion.
U.S. exports of services to Singapore have grown in the post-FTA period and were about 24 percent higher in 2007 compared with the pre-FTA period (2001-03). This represents a decline, however, in the share of total U.S. exports going to Singapore, as overall U.S. service export growth has been more rapid than that with Singapore...
U.S. imports of services from Singapore, in contrast with exports, have grown significantly in the post-FTA period, up 90 percent in 2007 compared with the pre-FTA period level. This represents an increase in Singapore’s share of all U.S. service imports, although its share in 2007 was still a modest 1.1 percent. [Page 101-102]
In other words, U.S. services exports to Singapore grew only a third as fast as those to the world. Meanwhile, U.S. services import growth rates from Singapore were nearly 50% higher than those from the world.
And the differential is not only true for Singapore. The GAO found that...
Recently revised data from the BEA show that U.S. services exports to Chile in 2007 were about $1.76 billion, less than one-tenth of 1 percent of the total. Comparing the 2007 figure with the 3-year average prior to the FTA, 2001-2003, exports to Chile were about 47 percent higher... [page 112]
So, U.S. services exports to Chile grew quite a bit slower than to the world as a whole. (The government doesn't even publish services info for Morocco or Jordan, the other countries in the GAO study.)
The GAO study also makes a number of points about lax enforcement of labor and environmental provisions in the trade deals, which will not come as a surprise to many readers of this blog.
[Also, it's worth noting that we used exactly the same measure of exports and imports as the GAO report (see page 72), which is also what the USITC uses. This is the measure that appear to be the primary objection of NAM and Chamber to the Public Citizen report (even though the authors that wrote the Chamber study also use the measure of exports we use).]