It turns out that Barack Obama made more than one economic howler at last Friday’s press conference. At the same time he assured Americans that “the private sector is doing fine,” the President tried to shift blame for any suggestion that it wasn’t onto both George Bush and the EU:
Concern that Europe’s economic problems could slow down and even reverse a U.S. recovery has now seemingly spread to the White House, where Obama already faces a tough re-election bid against Republican Mitt Romney.
“Right now, one concern is Europe, which faces a threat of renewed recession as countries deal with a financial crisis,” Obama said at his Friday news conference on the economy. “Obviously this matters to us because Europe is our largest economic trading partner.”
First, “Europe” isn’t a trading partner at all. The EU isn’t a trading partner at all; its member states are individual trading partners. Some European nations aren’t part of the euro currency, although they belong to the EU; the UK falls into that category, and the UKis our sixth-largest trading partner.
Does the Eurozone, compiled together, make our largest trading partner? According to the Census Bureau … nope. Data at the end of 2011 showed Canada, China, and Mexico as our top three trading partners in goods (the only data tracked by Census), accounting for 42.3% of all foreign trade. Japan adds another 5.3% in fourth place to bring the total to 47.8% before we even get to our first European trading partner, Germany, with 4.0% in fifth place, and the UK with 2.7%. They’re followed by seventh-place South Korea (2.7%) and eighth-place Brazil (2.0%), which brings us to 52.5% with nary a European sale taking place. France comes in ninth at 1.8% and the Netherlands 11th at 1.8%, but the rest of the top 15 trading partners are outside the Eurozone.
Of the top 15 trading partners in 2011, Eurozone nations accounted for 10.3% of our total foreign trade. Non-Eurozone nations in the top 15 accounted for 60.5% of our total foreign trade. The Eurozone is indisputably important for the American economy, but it’s not our largest foreign trading “partner,” even in the composite. Put together, they don’t even surpass Canada alone, let alone the combined North American Free Trade sector (28.7%). Isn’t that something an American President should know?
Update: I’ll expect a little pushback on this along the line of “you didn’t include services, which is a significant part of foreign trade.” That’s true, but it’s not significant enough to change these breakdowns to make the Eurozone our most significant trading arena. Services including travel, licensing fees, and so on. In the April report for the trade deficit, overall trade for the month came to $415.9 billion, of which services contributed $89.7 billion. That’s only 21.6% of overall trade — hardly enough to move the needle, even if one assumes that we don’t do any service trading in Canada, China, and Mexico.
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