Preventing U.S. export promotion overload

   It could be said that fledgling U.S. exporters can use all the help they can get, but are they getting too many federal agencies coming at them with offers of assistance?
   In January 2010, President Obama announced the National Export Initiative which proffered the goal to double the nation’s exports over the next five years. 
   The NEI called for 20 federal agencies with a hand in trade to work together and align their export promotion activities, such as trade finance, information-sharing and customer matchmaking services. Small companies have been a major target of this campaign.
   For sure, U.S. exports have grown since 2010, with record levels attained in 2013 ($2.27 trillion). However, it’s unclear how much of this growth was just a result of changes in the U.S. dollar’s value in the world market and the outcome of a recovering global economy or due to the federal government’s enhanced export promotion activities. We would venture to say it’s the former that mostly propelled the country’s exports forward during the past four years.
   According to the Government Accountability Office and other watchdog organizations, the agencies which are part of the NEI’s so-called Trade Promotion Coordinating Committee are struggling to coordinate their export promotion programs, as well as manage them internally in terms of resource allocation and performance evaluation. 
   Some agencies have come under fire in Congress for how they manage their export promotion activities. One key U.S. trade promoter, the Export-Import Bank, has been threatened with closure.
   In mid-September, Congress threw the bank a temporary lifeline, approving a stopgap spending bill to prevent a government shutdown that includes a nine-month extension of the export credit agency’s operating authority. Absent the renewed authority from Congress the independent agency was scheduled to close operations on Sept. 30, the end of the fiscal year.
   On top of that, during the second half of this year U.S. exports continued to lose steam. The Commerce Department reported a widening of the U.S. trade deficit in September, largely due to falling exports resulting from a strengthening dollar and slower economic growth overseas.
   While the Commerce Department, Small Business Administration, Ex-Im Bank and others offer assistance to small exporters, many of these companies must wonder if the process is still worth the effort when facing down stiff competition from overseas. The complexities of international trade—from financing to logistics and regulatory compliance—are enough to make small companies turn their back on exporting. The NEI is designed to streamline bureaucracy and provide handholding for new exporters, but more work is needed to make interagency collaboration effective.
   U.S. government officials are correct to note that there’s so much untapped export potential among the nation’s numerous small and midsized businesses. However, to reduce confusion among export assistance and promotional programs, it would be good for the government to merge some together rather than allowing them to continue operating separately.

This editorial was published in the December 2014 issue of American Shipper.