Each May, World Trade Month celebrates the benefits that U.S. exports bring to the national, state and local economies. The month just concluded reminds us of the important link between exporting and job creation.
More and more each day, Americans appreciate that 95 percent of the world’s customers live outside our borders. The middle class is growing quickly in regions like Southeast Asia, sub-Saharan Africa and South America, and consumers in those markets want the goods and services that U.S. businesses have to offer.
This foreign demand is helping American families gain economic security. As U.S. Secretary of Commerce Penny Pritzker said recently, “while we cannot control the ups and downs of the global economy, we can and must remain vigilant to maximize the potential of every American company that wants to grow, hire and compete through exporting.”
In 2013, New York businesses exported $84 billion in products to international destinations. These exports are an economic engine for the region and reflect the state’s diversity, extensive infrastructure and entrepreneurial prowess. However, many New York businesses have yet to explore their export potential.
More than 80 percent of the world’s purchasing power is outside U.S. borders. If a business is selling only domestically, it’s leaving money on the table.
Many would-be exporters put off exploring overseas sales because they believe exporting is burdensome, they think their businesses are too small or they are not aware of available export assistance. But the reality is that during the last few years, exporting has become much more viable: The combination of the Internet, improved logistics and transportation options, and more free trade agreements has helped turn even the smallest companies into exporters.
If a company has a good record of selling in the United States—one of the world’s most open and competitive markets—it probably is a good candidate for making international sales. In fact, small and midsize businesses employing fewer than 500 people account for 98 percent of U.S. exporting companies.
There’s also great opportunity for current U.S. exporters to expand their sales to new countries. Fifty-eight percent of all U.S. exporters sell to only one market. But a company that exports only to Mexico, for instance, should explore additional markets in Latin America, where the United States has many free trade agreements. Altogether, the U.S. now has 14 free trade agreements with 20 countries, and exports to these 20 countries represented nearly half of all U.S. goods exported in 2013.
In 2010, President Barack Obama launched the National Export Initiative to help U.S. companies increase exports, expand into new markets and compete worldwide. Since 2009, exports have increased by $700 billion, reaching an all-time high of $2.3 trillion in 2013 and supporting 11.3 million jobs. During the same period, New York merchandise exports have increased 43 percent. That’s good news, but there’s much more to be done.
Based on four years of input from the business community, the Obama administration recently launched NEI/NEXT, which aims to:
- connect more American businesses to their next global customers;
- make American businesses’ next international shipments easier and less expensive;
- expand access for American businesses to finance their next export transactions;
- promote exports and investment as the next economic development priority for American communities; and
- create, foster and ensure the next global opportunity for American businesses.
Overall, NEI/NEXT means enhanced service, more potential foreign buyers and reduced export transaction costs for U.S. exporters.
The International Trade Administration’s U.S. Commercial Service and its U.S. government partner agencies, such as the U.S. Export-Import Bank and Small Business Administration, have dramatically stepped up the availability of export financing.
Exporting can be rewarding and challenging, but the key to success is having a long-term commitment, developing an export strategy and seeking assistance. By doing so, companies will greatly enhance the chances of taking their business to the next level—offering them economic stability and growth and the possibility of creating more jobs right here in New York.
Timothy McCall is director of the U.S. Commercial Service in Rochester. For more information, visit www.export.gov/newyork.
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