Encouraging small and midsize companies to enter the export arena will put the U.S. on the fast track to sustaining the economic recovery, a top Department of Commerce official told a trade conference in Los Angeles this week.
Francisco Sanchez, undersecretary of the International Trade Administration, U.S. Commercial Service, told the annual Asia/Pacific Business Outlook Conference at the University of Southern California the Obama administration is building upon recent trade initiatives to get more companies engaged in exports.
About 95 percent of the world’s population lives outside the U.S., but only 1 percent of companies in this country export, and the majority of those sell to only one foreign market, Sanchez said.
The recovery is picking up steam; the economy has expanded for 24 straight months. “How are we going to keep it going? With exports,” Sanchez said.
A number of trade initiatives are in various stages of development that will help companies and agricultural interests that are successful in the domestic market to expand into the export arena.
President Obama’s National Export Initiative, announced in 2010, has a goal of doubling exports by 2014. This week marks the second anniversary of the initiative, and the program is ahead of schedule as the U.S. passed the $2 trillion market for exports, Sanchez said.
On March 15, the U.S.-South Korea Free Trade Agreement took effect, and this agreement is projected to add $11 billion a year to U.S. exports. Duties will be eliminated immediately on 80 percent of U.S. industrial and consumer exports to South Korea, and two-thirds of agricultural exports to that country.
The U.S. and eight trading partners in Asia, Australasia and South America late last year approved a broad outline for developing the Trans-Pacific Partnership. In addition to reducing tariff, the partnership aims to promote economic growth and job expansion in the Pacific Rim by reducing non-tariff barriers to trade and making regulations among the countries more compatible.
Earlier this year, President Obama asked Congress for authority to consolidate the trade promotion functions of several federal agencies. Sanchez said it won’t be easy to get the agencies together, but the effort will complement the administration’s other initiatives if it is successful. “I believe it will make us stronger,” he said.