The Office of the U.S. Trade Representative (USTR) just released its 2011 Trade Policy Agenda, which highlights several initiatives designed to boost exports. Nowhere in the 443-page document is a mention of the biggest barrier to U.S. exports: the federal budget deficit.

Budget deficits require the government to borrow money that otherwise could be spent on U.S.-made exports or invested in our economy’s productive private sector. In 2010, the federal government financed its deficit spending by selling $708 billion in Treasury securities to foreign buyers. To put that in perspective, foreigners spent more on Treasury securities than on any of the following types of U.S. exports: agricultural goods, services, industrial supplies, consumer products, or capital goods.

If not for federal borrowing from abroad, the United States easily could have registered a trade surplus in 2010. Because foreigners spent billions on Treasury bonds instead of exports, we ran a $498 billion trade deficit instead.

Economists will argue, correctly, that there is not a one-to-one relationship between federal borrowing from abroad and lost exports. However, everything else being equal, a balanced federal budget in 2010 would have freed $708 billion (the amount the U.S. government borrowed from overseas) that could have bought U.S. exports and been invested in our private sector. Imagine how many jobs that could have created.

The USTR released its trade policy report on March 1. Less than one week later, the Congressional Budget Office reported that the federal budget deficit for February was the largest in U.S. history. Eliminating this runaway deficit spending should top our country’s trade policy agenda.