U.S. moving to boost exports: Locke

WASHINGTON Wed Oct 21, 2009 4:21pm EDT

US Commerce Secretary Gary Locke engages with reporters for the 2009 Reuters Washington Summit in Washington, October 21, 2009. REUTERS/Jonathan Ernst

US Commerce Secretary Gary Locke engages with reporters for the 2009 Reuters Washington Summit in Washington, October 21, 2009.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - The Obama administration has made increasing U.S. exports a key part of its strategy to reduce unemployment and is moving on several fronts to do that, Commerce Secretary Gary Locke said on Wednesday.

In a wide-ranging interview, Locke said the size of the U.S. trade deficit was a concern for the Obama administration, even though it has fallen sharply this year.

Ahead of a visit to China, Locke said he would press the Chinese to lower import barriers to U.S. goods and protect the intellectual property rights of U.S. firms.

He shrugged off criticism the government is dragging its feet on free trade pacts, saying the Obama administration wants to finalize deals with Colombia, South Korea and Panama.

"The number one indicator that everyone is focusing on is the unemployment rate ... What we can do to help businesses grow and expand in America is to help them sell their products and services," Locke said at the Reuters Washington Summit. "The key to addressing that deficit is to export more American products and services, not just to China but all around the world."

CHINA BOUND

Later this week Locke will convene the Obama administration's first ever trade promotion policy coordinating committee. He and U.S. Trade Representative Ron Kirk will then travel to Hangzhou, China next week for high-level talks on trade and investment concerns.

The U.S. trade deficit with China totaled $143.7 billion in the first eight months of 2009, down 15 percent from the same period last year as the U.S. recession took a toll on consumer and business demand.

It is still the largest trade gap the United States has with any country and has fallen less than bilateral deficits with Canada, the European Union, Mexico and Japan.

"Clearly the trade imbalance with China is not healthy and we need to do everything we can" to address it, Locke said, adding the ideal situation would for it to be roughly in balance, with small fluctuations from year-to-year.

Locke said he would be pressing the Chinese next week to lower barriers that hamper U.S. companies from participating in China's fast-growing market for clean energy, alternative fuels and energy efficiency products.

But he also warned that the United States risked being left behind by China in those fields if Congress does not pass climate change legislation.

While American investors are waiting to find out what lawmakers will do, "China is spending almost $100 billion a year from the government supporting renewable energy, clean energy, energy efficiency," Locke said.

"The longer we in the United States take to pass comprehensive energy legislation, the farther ahead the Chinese will be," Locke said.

Locke, a former governor of Washington, also said he would also deliver a message to the Chinese that it is in their own economic interest to focus on strong intellectual property protection.

"As they start to innovate, as they start to invent, they're not going to want someone else ... ripping off those ideas and products and services," he said.

In one recent example of the problem, pirated copies of Microsoft's (MSFT.O) new operating system, Windows 7, were on sale in China last week before the legitimate version was even released. They sold in shops in Shanghai for about $3 a copy -- a fraction of list prices as high as $320.

PUSH FOR VISA, EXPORT CONTROL REFORMS

Earlier this week, Republican Senator Charles Grassley said he gives President Barack Obama "an F" on trade for failing to push forward on free trade pacts with Colombia, Panama and South Korea left over from the Bush administration.

Approving those pacts is part of the administration's plan for boosting exports, but it is still too early to say when they would be sent to Congress, Locke said.

"The president does want those agreements ratified but there are some issues that need to be addressed," Locke said.

The Obama administration has previously cited concerns about anti-labor violence in Colombia, tax laws in Panama and non-tariff barriers in South Korea.

Meanwhile, the Commerce Department has embarked on an initiative aimed at getting more small and medium-sized U.S. businesses involved in exports, Locke said.

It also is working with the other government agencies to ease restrictions on business visas that make it hard for U.S. companies to make export sales, he said.

The department is moving "very, very fast" on its proposal to remove licensing requirements for companies to export certain dual-use goods that have both commercial and military applications to longtime allies, Locke said.

He hoped to have proposals submitted by year end and implement the measure in the beginning of 2010.

"Things that are readily available from Home Depot or Radio Shack and yet are subject to export controls make no sense," he added, echoing a longtime U.S. business complaint the current system makes them lose sales to foreign competitors.

Locke, who oversees a vast department with a number of agencies, said he was also moving to restructure the U.S. Patent Office to help U.S. business compete.

"I find it absolutely unacceptable that it takes almost three years before a patent application is accepted or rejected ... We need to get that down to less than a year. And that is a number one focus for us," Locke said.

(Reporting by Doug Palmer, Tim Ahmann, Glenn Somerville, Kristin Roberts and Paul Eckert; Editing by Andrea Ricci)

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