Guest Opinion: Overseas ripe for Iowa
Friday, August 15, 2014 6:00 AM
In 2013, Iowa businesses exported $13.9 billion in products to world destinations. These exports are an economic engine for the region and reflect the state’s diversity, extensive infrastructure and entrepreneurial prowess. However, many Iowa businesses have yet to explore their export potential.
Patricia Cook is director of the U.S. Commercial Service office in Des Moines.
As director of the U.S. Commercial Service in Des Moines, my job is to help connect Iowa companies with international buyers, and my office does that by utilizing U.S. Commercial Service offices in 108 American cities and U.S. embassies and consulates in more than 70 countries.
Americans are appreciating the fact that 95 percent of the world’s customers live outside our borders more and more each day. 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.”
More than 80 percent of the world’s purchasing power is found outside the U.S. If a business is only selling domestically, it’s leaving money on the table. Many would-be exporters put off exploring overseas sales because they believe exporting is burdensome, their business is too small, or they may not be aware of assistance.
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 proactive exporters. If a company has a good track record of selling in the United States — one of the world’s most open and competitive markets — it’s likely a good candidate for making international sales. In fact, small and medium-sized 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. Nationally, 58 percent of all U.S. exporters sell only to one market. For instance, a company that exports only to Mexico should explore additional markets in Latin America where the U.S. has many free trade agreements. Altogether, the United States now has 14 free trade agreements in force with 20 countries. Exports to these 20 countries represented nearly half of all U.S. goods exported in 2013.
In 2010, President Obama launched the National Export Initiative (NEI) to help U.S. companies increase exports, expand into new markets and compete globally. Since 2009, nationwide exports have increased by $700 billion, reaching an all-time high of $2.3 trillion in 2013 and supporting 11.3 million jobs. During this same period, Iowa merchandise exports have increased by 53 percent. That’s good news, but there’s much more to be done.
The Obama administration, after consulting business leaders, recently launched NEI/NEXT, which aims to:
• Connect more American businesses to their next global customer.
• Make American businesses’ next international shipment easier and less expensive.
• Expand access for American businesses to finance their next export transaction.
• Promote exports and investment as the next economic development priority for American communities.
• Create, foster and ensure the next global opportunity for American businesses.
Overall, NEI/NEXT means enhanced quality service, more potential foreign buyers and reduced export transaction costs for U.S. exporters.
Through the NEI portfolio, 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, providing businesses with every incentive to expand their exporting efforts.
Exporting can be rewarding and challenging, but success comes from long-term commitment and doing the required homework by developing an export strategy and seeking relevant 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 new jobs right here in Iowa.
For more information, visit www.export.gov/Iowa.
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