Slumping Exports

In Daniel Drezner’s latest discussion (Doha is Back on Track) on of international trade issues, he notes this Kerry press release, which states:

Exports Are Down Under President Bush-The First President Since Herbert Hoover.

Exports have fallen in inflation-adjusted terms under President Bush-the first drop under any President since Herbert Hoover. In contrast, most post-World War II Presidential terms have seen 15 to 30 percent real export growth. (BEA)

BEA does show exports falling as a share of GDP from 11.2% in 2000 to 9.5% in 2003 and in absolute terms from $1096.3 billion in 2000 to $1031.8 (2000$) in 2003.

Dan replies that this:

point is a non sequitur, since it has little to do with the Bush administration. Exports are largely a function of other countries’ aggregate demand and the exchange rate. Under Bush, the dollar has depreciated in value. What’s depressed exports has been the sclerotic growth of our major trading partners, not some failure of the Bush administration.

There has been an overall real devaluation of the dollar since Bush took office, but isn’t it part of Robert Mundell’s model that floating exchange rates insulate the economy from foreign demand shocks (see for example, here)? So why did not the weak foreign demand further devalue the dollar? Could it be that the wreckless Bush fiscal policy is still to blame?