February 9, 2010
WASHINGTON - Commerce Secretary Donald Evans is winning enthusiastic reviews for his work as chairman of the inter-agency Trade Promotion Coordinating Committee.
Evans, says Edmund Rice, president of the Washington-based Coalition for Employment through Exports, a business-labor group, is "making very effective use" of the FTAA as an U.S. export promotion tool . "For the first time," says James Morrison, president of the Small Business Exporters Association, "I feel that the TPCC is trying to live up to its name."
Evans himself credits the TPCC for having made "tremendous progress" in the past year in implementing a series of recommendations - there are 60 in all - toward a more vigorous national export strategy. "We are close to providing world class programs and services for our exporters," he recently told the Senate Banking Committee.
If so, it could not come at a more propitious time. U.S. exports worldwide declined in 2001 and again last year and so far this year are up only modestly, as imports have surged to record levels.
The TPCC (its 14 members include the Export-Import Bank, the Small Business Administration and the departments of State, Treasury and Agriculture) is trying to tackle the export problem in a variety of ways, from integrating, where possible, the programs and services of member agencies to developing new export tools.
Much more emphasis, officials say, is being put on reaching out to potential exporters, through jointly-held trade shows, export seminars and direct mail campaigns. The government's Export.gov Web site is being upgraded, laying out each agency's export services, providing trade leads and enabling firms to register online for export assistance.
In what could be a big plus for small- and medium-sized firms, the TPCC has initiated a cross-agency training program so that officials in one agency keep fully-apprised of the programs and services of the other agencies. Instead of making multiple phone calls to seek out federal help on an export bid or sale, one call may eventually suffice.
And the Ex-Im Bank, building on its recent reorganization, promises to be "more market-focused and customer-driven" by, among other things, speeding along its processing of export financing applications.
Meanwhile, the bank and the Agency for International Development are about to launch a mixed-credit program to spur more U.S. export sales to middle-income developing nations. Under this facility, U.S. exports would be financed by a combination of AID grants and Ex-Im Bank standard financing.
It is an initiative long overdue. Competitor nations, thanks to their mixed-credit offers, have been winning contracts for years at the expense of U.S. suppliers.
In another bid to become more of a "strategic partner" for U.S. exporters, the Commerce Department's Commercial Service will intensify its scouting of major developing country projects for possible U.S. contracts. Ex-Im Bank and other TPCC agencies will join Commerce in putting together U.S. exporter support packages even before project bids are asked.
This so-called "early project development" initiative represents a potentially big plus for major U.S. exporting companies, says Rice. Still, it, too, is something of a catch-up to what some other countries have been doing for their exporters. As for now, the initiative will focus on projects in Mexico, China and Russia.
Separately, Ex-Im Bank is negotiating a new framework agreement with China's Finance Ministry that could lead to yet more U.S. sales to China.
There is other encouraging news. Ex-Im Bank hopes to finance about $14.5 billion in U.S. export sales this fiscal year, up $1.6 billion from a year earlier, and next year it expects to finance substantially more.
Still, no matter how hard Ex-Im Bank and other TPCC agencies strive to bolster their products and services, U.S. export promotion will likely continue to pale compared to the programs of major competitor nations.
For one thing, as Evans notes, the United States, among the major industrial countries, has "the lowest staffing and spending as a percentage of gross domestic product on export promotion."
What's more, the export financing of foreign government agencies far out-strips that of Ex-Im Bank. Japan, for example, does ten times or more financing.
Under such circumstances, there is no way the U.S. can move into the front rank of export promoting nations, says Rice. "The best we can hope for," he says, "is that our government keeps making commitments to improve its export promotion services so that we don't lose further ground."
And for all the TPCC's work, there remain untaken some obvious steps that could boost U.S. exports, in particular scrapping the law requiring Ex-Im Bank- financed goods to be carried on U.S.-flag vessels. That rule boosts U.S. shipping costs by three- to five-fold
Then there's the problem of unilateral export controls. No other major nation imposes such an array of restraints on its exporters for foreign policy or security reasons as the United States.
For example, U.S. oil companies continue to be barred from the Iranian and Libyan markets while U.S. manufacturers of high-performance computers, satellites and machine tools still labor under unusually tight export curbs in the China market. Then there's the Cuban trade embargo.
Nonetheless, U.S. exports are expected to start rising, thanks partly to a depreciating dollar, which makes them more price competitive. Over the next year, the U.S. trade deficit may be pared by as much as $100 billion, estimates the National Association of Manufacturers.
To the applause of U.S. exporters, the Treasury Department is letting the dollar depreciate, at least so far. Still, say the NAM's Frank Vargo and others, Treasury could do more to help exporters, by exerting pressure on Japan and China to stop trying to bid up the dollar.
But don't expect the TPCC to tackle exchange rate or export control policies or even U.S.-flag shipping requirements. Despite its name, it has a "very limited mandate, to coordinate and streamline the trade promotion programs" of U.S. government agencies, a TPCC official stresses.
Still, TPCC does have plenty on its plate. Cautions Secretary Evans, "while we have made a good start, the coming year will be critical, as we are in the midst of following through on the most difficult (trade promotion) recommendations."
The exporting community will be watching.
Richard Lawrence, a long-time trade reporter for The Journal of Commerce, is based in Washington.
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