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How Uncle Sam Helps Exporters
Tuesday, 23 February 2010 11:06

“I’m from the government, and I’m here to help you.” That’s a common joke, but U.S. government officials can be an exporter’s best friend, especially for those new to exporting or who are looking to expand into new markets. Government agencies serve exporters in numerous ways, including educating them about opportunities outside the U.S., obtaining financing, and helping them to overcome hurdles in foreign markets.

Less than one percent of American companies export, and of those companies, 58 percent sell in only one market. One reason for this weak performance is that most companies are afraid to dip their toes outside the U.S. Part of that fear is because they are unaware of the help they could get from Uncle Sam. If more companies took advantage of the services offered by government agencies, U.S. exports could grow by hundreds of billions of dollars. Those exports would create millions of jobs, slash the trade deficit, and bolster national security.

Here are brief descriptions of key U.S. agencies and the services they provide:

U.S. Commercial Service— This is the export arm of the U.S. Department of Commerce. The Commercial Service’s primary goal is to help small and medium enterprises, but its services can be very valuable to large exporters, too. It has trade specialists at export assistance centers in 109 U.S. locations and at U.S. embassies and consulates in 77 countries. They will help you find out which markets offer the best opportunities and identify prospective customers, distributors and partners. They will even arrange appointments for you.

The Commercial Service also helps with trade missions and trade shows, including bringing foreign buyers to U.S. trade shows.

“I don’t know of a single company that has a competitive product, that is really interested in selling to new markets, and that has used Commerce Department services that has failed—as long as they work at it,” says Frank Vargo, Vice President-International at the National Association of Manufacturers. Vargo said one of the best ways to stimulate the economy would be to triple the Commercial Service budget, which was a relatively paltry $257 million in fiscal 2009.

Its Trade Information Center (1-800-USA-TRADE) is a single point of contact for potential exporters and provides basic export counseling and information on all U.S. government export assistance programs.

The Commercial Service’s Web site——is a fabulous resource, and a great starting point for any company that is new to exporting or that wants to expand into new markets.

The Commercial Service is part of the Commerce Department’s International Trade Administration— ITA’s other units include:

Market Access and Compliance— It identifies and overcomes trade barriers, resolves trade policy issues, and ensures that U.S. trading partners fully meet their obligations under trade agreements.

Export-Import Bank— The bank is the official export credit agency of the U.S. government. Its services include working capital guarantees, loan guarantees, and export credit insurance, which help minimize the risk of non-payment. Most of Ex-Im’s efforts have been geared to exporters of large capital goods such as aircraft, but recent years have brought a heavy focus on small and medium exporters. In fiscal 2009, for example, it approved 2,540 transactions that were made available for the direct benefit of small-business exporters, of whom 515 were first-time users of Ex-Im Bank services.

For the most part, it works through commercial lenders, but it also provides direct loans. Most of these have gone to foreign buyers of U.S. goods and services, but in response to the credit crisis it has stepped up direct loans to U.S. companies. Ex-Im Bank brought its message to the public last fall with seminars in eight U.S. cities, which were attended by 1,500 business owners. It plans to conduct another road show early this year.

Small Business Administration— Its services to exporters include working capital guarantees, which helps companies obtain financing from commercial lenders to pay for raw materials, supplies, labor and overhead, so they can fulfill export orders. SBA’s Export Express program provides exporters and lenders a streamlined method to obtain SBA-backed financing for loans and lines of credit up to $250,000.

Foreign Agriculture Service— This is the export promotion agency of the U.S. Department of Agriculture. Its services include a foreign market development program, a market access program, and export credit assistance.

U.S. Trade Representative— This is the lead agency on trade policy, negotiation of international agreements, and coordination of existing agreements. It represents the U.S. at the World Trade Organization.

Cargo Business News, 2/2010