A new program launched by President Reagan last week offers big potential for trade intermediaries such as export management and trading companies, a Commerce Department official said.
Such companies buy products from U.S. manufacturers and sell them overseas, thus eliminating much of the risk of exporting. Their services can be especially attractive to smaller firms that do not have the resources to handle overseas sales, marketing, distribution, documentation and shipping.The major difference between export trading and export management firms is that some companies in the former group also engage in importing.
Under the new program, called Export Now, U.S. companies and federal officials will stage workshops and seminars around the country to encourage U.S. firms to start exporting.
John E. Stiner, director of the Commerce Department's Office of Export Trading Company Affairs, said he would take advantage of those opportunities to encourage companies that have not yet gotten into exporting to use the expertise developed over the years by export management and export trading firms.
I'll be the point man in the federal government to promote intermediaries, Mr. Stiner told a meeting of the National Association of Export Companies Inc. here last week.
Mr. Stiner, who assumed his current position last September, acknowledged that export trading and management companies haven't had a high regard for his office. But, he said, I believe I'm a friend of your industry.
The office was established as a result of the 1982 Export Trading Company Act, which encouraged banks to form trading companies. It also allowed other companies to engage in joint export activities with antitrust immunity.
Over 40 banks formed such trading units, but as exports plummeted because of the strong dollar and the Third World debt crisis, most of the banks folded them within a couple years.
More than 700 companies have now been certified to engage in joint export activities under the 1982 law's provisions granting them antitrust immunity for such efforts, and Mr. Stiner predicted that the number of companies participating in the program will double this year.
Many trade associations are encouraging their members to seek this certification, but the trade groups themselves and their member companies often do not have the expertise to conduct export related activities.
Consequently, Mr. Stiner said, he's encouraging the trade associations to use the expertise developed by the export trading and management companies. There are over 1,000 such concerns in the United States, although most of them are small Mom and Pop outfits that have been around for decades.