U.S. pushing companies to go after global market
Uncle Sam wants more of the nation’s small-business exporters to step up their international sales as part of an ambitious goal to double U.S. exports to $3 trillion within five years.
The National Export Initiative announced by President Obama as part of his State of the Union speech in January is meant to boost jobs and the economy.
To succeed, the government will have to persuade more small businesses to tackle the complexities of international trade. And that won’t be easy, experts said.
Even those small businesses already exporting have concerns. They say they worry about shipping logistics in the heightened security environment, theft of their intellectual property, export financing during a credit crunch and the price of their goods and services in foreign markets.
“There are a lot of pieces to the puzzle,” said Susan Corrales-Diaz, president and chief executive of Systems Integrated in Orange, which makes and exports industrial control systems. She is also chairwoman of the national Small Business Exporters Assn.
To meet Obama’s goals, trade officials say they are targeting existing exporters and hope to inspire new ones. Six out of 10 exporters in the U.S. do business with a single country, often Canada or Mexico, the data show. The idea is to get them into more countries quickly.
“I think we get more bang for the buck focusing on those who are now exporting,” Commerce Secretary Gary Locke said. “They are primed and ready to, let’s say, go to Europe. And if they are in Europe, then we need to help them export to Latin America. If in Latin America, then Asia.”
Locke said he was partnering with FedEx Corp. and United Parcel Service Inc. to offer seminars for their small and medium-size clients who were already exporting to at least one country. Recent data indicate there are almost 300,000 U.S. exporters.
The Commerce Department also hopes to replenish the ranks of trade officers overseas in U.S. embassies, with as many as 238 positions proposed in Obama’s 2011 budget. At the same time, more money has been included in the proposed budget to guarantee export-related small-business lending.
“There is a commitment to dramatically intensify and ramp up our effort,” Locke said. The Commerce Department and the other federal agencies involved in the Export Promotion Cabinet, which was announced last month, have six months to submit plans showing how they will double exports.
Systems Integrated has exported its control systems for years. But its exports as a percentage of total sales have dropped to 5% compared with a high of 25%, because of financing and other hurdles, Chief Executive Corrales-Diaz said. She expects improvement this year at the 30-person firm, but said challenges remained.
Chuck Wagner, vice president of business development at Aqua-PhyD Inc. in Irvine, said he was learning about the challenges of exporting.
The six-person company, which makes a commercial water-treatment product, wasn’t looking to export, but interest in its technology seems to be greater abroad than at home, he said.
“We are now trying to see how our company, which is a very small company, can meet that need, to see if we can afford it,” Wagner said.
He has signed up for free export classes offered by the Commerce Department and the South Bay office of the California Centers for International Trade Development. He also hopes to earn a spot in that office’s new program for green companies that want to export. The program was created by office director Maurice Kogon. A government grant will enable the office to work with 25 green firms a year.
Wary small-business owners, Kogon said, don’t know that “most of the complications” involved in exporting are handled by other people, such as freight forwarders. “There is a lot” to deal with, he said. “But it’s not insurmountable.”