A Look at What Drives Export Growth: The Possible Effect of Trade Promotional Efforts and Free Trade Agreements

This paper challenges the assumptions that governmental trade promotional efforts and the entering into of Free Trade Agreements (FTA’s) have a strong positive effect on U.S. exports. While determining that global economic growth and the dollar exchange rate are the main drivers of exports, the paper uncovers some very interesting and not well known facts about export performance with the seventeen partnering FTA countries. For the U.S. to enter into an FTA does not necessarily cause a surge in exports and imports. This paper cautions against over-optimistic and wholesale attempts to force through controversial FTA’s when perhaps the membership in the World Trade Organization is sufficient to ensure steady growth. It is especially disappointing to see the relative lackluster growth in exports after the NAFTA and CAFTA agreements went into place. Other FTA partners show a much better record.