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m2’s take on the national export initiative

Friday 19 March, 2010

When I listened & watched President Barack Obama’s State of the Union Address, I was shocked & psyched when he set a goal of doubling America’s exports in the next 5 years. My question was, “How does he think he’ll go about achieving it?”  Apparently it’s taken 6 weeks to put together a plan, called the National Export Initiative.  Here are the announcements:

Here’s my take the NEI:

Obviously as a devoted internationalist & service provider who helps American firms grow globally, I think this is great.  It’s been a long time since a President has made exports such a high priority.  I think it’s appropriate.  Elevating this effort to “cabinet level” (obviously State, Commerce, & Agriculture departments already are) raises the level of awareness, which is sorely needed.  My impression has been that previous administrations have simply let the $ fall & assumed that cheaper prices would sell more American products & services.  That’s not our advantage.  As an international business writer, I have to pick at the finer points to evaluate the likelihood of success.  My concerns:

  • trade finance-the Export Import Bank stepped up during the financial meltdown & adding $2B in funding certainly helps.   I interviewed the midwest regional director of ExIm , & the response to that indicated that access to capital is not the problem, rather timeliness is the issue.  In addition to adding capital, I hope they add the human resources to enable ExIm to work expeditiously to provide its financing in the time frames businesses need to compete with foreign competitors whose processes work much faster.  You can’t just throw money at the problem & expect it to work.
  • advocacy-40 trade & reverse trade missions are a good start, but the real test is what results that come out of those trade missions.  The real work comes beforehand & afterwards, when prospects are qualified & followed up upon.  Some can be very successful, but government-organized trade missions have low levels of accountability.  The focus is as much on the signing opportunity for the dignitaries as it is for finding qualified prospects for American companies.  Governments simply aren’t very good at marketing.  The Travel Promotion Act & adding Senior Business Liaisons @ embassies & consulates don’t cut it.
  • assistance-beefing up resources at offices domestically & abroad can only help. I constantly hear how underfunded the Department of Commerce is.  It sounds good, but given our financial situation & so many projects competing for money, I wonder how they can find the funds to pay for this.
  • free/fair access-We need to tear down trade barriers to get reciprocal access.  Our markets are open, so we should expect the same openness from our partners, but many of these barriers are not explicit, so overcoming them is not obvious.  You can’t argue against protecting intellectual property.  The rest of the world should value theirs as much as we treasure ours, but the fact is they don’t.  Lowering export controls should increase our opportunities.  Many have criticized Obama for sounding socialistic by encouraging enforcement of labor & environmental provisions.  The question for all of this is “At what cost?”  We can stomp our feet up & down & scream “Bloody murder!,” but we can’t enforce foreign laws in other countries.  We can pick up our toys & go home, but that’s not productive for us either.  I endorse it, but I don’t know how we can back it up.

The international business person in me wants this to be a huge success, but my experience leads me to expect much less.  A lot of this reeks of more of the same, just bigger & better, (which can have its advantages).  American companies need a significant change in business culture to bring about a change in long-term orientation.  We need to make changes at much deeper levels to have the kind of impact Obama wants.  We need to start learning foreign languages & world history, economics, & politics at much earlier ages.  We need to stop thinking the opportunity in the state next door is “better” than the opportunity on the next continent.  We must stop being scared of the unknowns & plunge right in.  We can no longer think of America as God’s chosen country.  It is not.  Flat-world companies from the rest of the globe are taking advantage of us.  We need to pursue them as aggressively as they pursue us.

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