By Marina Malenic
President Barack Obama yesterday named Boeing [BA] CEO James McNerney to lead a U.S. export-promotion panel, just days after the Pentagon’s latest attempt for a transatlantic industry partnership to develop a weapons systems fell flat.
In a speech to the Export-Import Bank conference, Obama outlined steps his administration will take to promote U.S. exports and overhaul what officials have said is an outdated export-control system. Obama has re-established the President’s Export Council, a presidential advisory committee on international trade, and named McNerney and Xerox Co. [XRX] chief executive Ursula Burns, to lead it. The Aerospace Industries Association estimates that about half of its workforce depends on exports.
“When other markets are growing, and other nations are competing, we’ve got to get even better,” Obama said. “We need to secure our companies a level playing field. We need to guarantee American workers a fair shake.”
Earlier this week, EADS North America and its industry partner Northrop Grumman [NOC] announced that they would not bid for a multi-billion- dollar Pentagon deal to build a new fleet of Air Force tankers. Northrop Grumman CEO Wes Bush alleged that the Defense Department’s source selection methodology “clearly favors” Boeing’s smaller refueling tanker. Northrop Grumman-EADS originally won a contract to build 179 tankers based on the Airbus A330 for the Air Force in February 2008. The contract was canceled when U.S. auditors upheld a Boeing protest tied to Air Force missteps in evaluating bids.
According to a statement released by the White House, Obama will sign an executive order establishing an Export Promotion Cabinet. The Secretaries of State, Treasury, Commerce and other officials will be part of the panel and will meet for the first time next month.
His executive order also will reestablish the President’s Export Council, a private-sector advisory panel to be led by McNerney and Burns.
“Other countries haven’t always played by the same set of rules,” Obama said. “America hasn’t always enforced our trade rights, or made sure that the benefits of trade are broadly shared.”
The president also announced two components of a planned overhaul of the export-control system. First, the delay of exports of products with encryption capabilities would be reduced to 30 minutes from 30-to-60 days under the new plan. The new system would promote exports without undermining national security, according to the White House.
Second, the administration plans to eliminate export barriers for companies that employ individuals holding dual citizenship.
“The reform program will enhance national security by focusing on the enforcement of strict controls around the export of the most critical technologies and products, while strengthening the competitiveness of key manufacturing industries in the U.S. by streamlining the regulations that apply to their exports,” the White House said in a press statement.
Defense Secretary Robert Gates will outline the administration’s export-control reform proposals “in the coming weeks,” the White House added.
Gates is seen as a key player in efforts to revamp what many in industry also see as an archaic export control system in the United States. The current, decades-old export control regime was created with the intent to safeguard sensitive dual-use technologies. Many in industry say the overly strict rules harm U.S. commercial competitiveness.