June’s US trade statistics have shed doubt on the efficacy of President Barack Obama’s National Export Initiative (NEI) which, launched in February, aims to double US exports by 2015.

A series of marketing plans, aimed specifically at major emerging markets including India, China and Vietnam in Asia as well as Brazil and South Africa, are the main tools utilised by Obama in boosting exports. US trade representatives are also lobbying hard for the removal of trade barriers on exports to the above markets, and will aim to increase the international exposure of specific markets and industries. Although Obama has declared the first few months of the NEI a ‘terrific’ success, a record US$17.7bn deficit with China in June suggests otherwise.

The measures taken by the US to boost exports are in contrast to the approach adopted by Canada, a neighbour of the US and a rival exporter of goods such as grain, iron ore and coal to Asia. In June, Canada’s largest port, the port of Vancouver, inked a supply-chain collaboration agreement with rail freight operator Canadian National Railroad (CN). The agreement aims to improve the efficiency of the supply chain, which should increase the competiveness of the port as a major export hub.

In BMI’s view, the ‘grass roots’ approach being taken by Canadian operators to increase export revenues further underlines the failure of the Obama administration to challenge one of the major obstacles to growth: the inadequacies of US trade infrastructure. An overreliance on its services sector as a major source of export revenue has left the US with a heavy deficit in traded goods, leaving the freight transport sector geared heavily towards imports. According to UNCTAD (the United Nations Conference on Trade and Development), in 2007, about 4% of the global merchant shipping fleet was flagged to the US, weighing about 12.4mn deadweight tonnes (DWT). The percentage of US-registered vessels in the 1950s, in contrast, averaged about 40%. Meanwhile, the US’s west coast ports, although among the world’s largest in terms of throughput capacity, are primarily catered towards imports and thus, in BMI’s view, are ill equipped to handle a sudden spike in outgoing cargo.

Across the border, in Vancouver, Canada boasts North America’s largest coal terminal, making it well placed to take advantage of growing shortfalls in China and India. US shippers are able to export through Vancouver, but at some stage a designated US terminal will be needed to handle increasing export demand over the next few years.

Canada also holds a natural logistical advantage over the US in terms of its capacity to export grain to Asian markets. Its main growing regions are situated to the west of the country, providing a direct supply route from Pacific coast ports, between 16 and 18 days sailing time from China’s eastern seaboard. In contrast, US exports, which are produced in the Midwest plains, are traditionally shipped from Gulf coast ports, with a sailing time to China of between 33 and 37 days.

With Obama seemingly paying little attention to these fundamental imbalances, it remains to be seen whether expensive marketing initiatives alone coupled with favourable macroeconomic conditions will allow the US to meet its ambitious trade targets by 2015.