Promoting U.S. Exports and the Benefits of Increasing U.S. Exports

Promoting U.S. Exports and the Benefits of Increasing U.S. Exports

Abstract

The American trade deficit is extremely large due to the lack of exporting compared to importing we do so our government has been pushing for increased exports in recent years since our economy is in a recession. We will discuss many different options that the government can and has been pursuing to encourage exports along with the positive effect that increased exports can give to boost our ailing economy.

Promoting U.S. Exports and the Benefits of Increasing U.S. Exports

The United States is home to some of the biggest exporting companies in the world. Since it is also one of the largest trading partners with many of the largest importers in the world, it should be easy promoting and increasing exports. However, over the years, there have been debates over export promotion because it is difficult to assess how such promotion bolsters U.S jobs and economic growth. President Obama's National Export Initiative (NEI) has led the United States to take numerous steps to promote and increase its exports. Since its inception US exports grew almost 17 percent according to the NEI Progress Report prepared by the White House, Russia has agreed to reopen its markets to poultry exports, China has agreed with us in March to reopen its own markets to U.S. pork and other U.S. pork products, the Department of Commerce has coordinated 18 trade missions across 24 different countries, and access has been increased to import financing (Klein, 2010).

Promoting and Increasing Exports

There are numerous different promotion methods that once can use to promote exports. Some of these methods can mirror normal methods used by businesses to promote their products at first glance, while other methods that give people the means to export, like financing trade, are also practiced.

Firstly, magazines can play an important role in getting the word out on exporting and how much it can help the ailing U.S. economy. There are several prints and online magazines that reach more than a quarter million readers in over 150 countries worldwide and more than 7000 visitors a month online (Sales and Marketing, 2010). Another available option is for companies to purchase listings to promote their products around the world, a commonly used method by multinational companies and conglomerates. An example of one such publication is Commercial News USA, which is produced in partnership with the U.S. Commercial Service and helps American companies find buyers and distributors for their products and services (Commercial News USA, 2010). It has established partnership with various government services in other countries and fosters a network of international and domestic companies.

The internet is every bit as good as print promotions as a method for U.S. exporters to get exposure. FUSE, or Featured U.S. Exporters, is a directory of U.S. products featured around the world on the U.S. Commercial Service's website (Basics of Exporting- Export Intermediaries, 2010). Companies using the forum can target specific markets and communicate in the local language of the country. The exporters yellow pages' offer comprehensive resources searchable by industry, product, services, also keywords for over 65,000 categories. (Basics of Exporting- Export Intermediaries, 2010). U.S. exporters are given the option to be able to request a free listing.

Trade shows are another way the U.S. government can help get business owners to export their goods. Anyone who organizes a trade show can get the International Buyer Program (IBP) to promote their show around the world. The IBP recruits thousands of qualified foreign buyers, sales representatives, and business partners to U.S. trade shows each year (Markheim, 2008).

The trade weighed value of the U.S. dollar plays a huge part in increasing exports, as well. Since 1945, U.S. exports have only doubled once following a sizable devaluation of the U.S. dollar (Schwenninger & Sherraden, 2010). In trade weighted terms, a significant fall in currency makes America more competitive against its main trade partners. With China now being our largest trading partner, many exporters face a disadvantage because of the Chinese policy to peg its Yen to the U.S. dollar. The U.S. trade position benefited briefly from a stronger Euro and Yen, but the unfolding Euro zone debt crisis has weakened the euro and the new Democratic Party of Japan is now pursuing a weak Yen policy to help Japanese exporters and to counter the weak Chinese yen. Many argue that action against China's currency peg and policy that pushes for a weak U.S. dollar could help to increase exports (Schwenninger & Sherraden, 2010).

Yet another way to promote exports and get word out on how much it can boost our suffering economy is through holding seminars and simply education people about them. According to U.S. Senator Amy Klobuchar, American business owners want to know how to export, but just do not know where to get started (Klobuchar renews call, 2010). Most people do not have college educations and know nothing at all pertaining to how to export products or even if someone who does not own a big corporation can export products, which is a huge problem considering that "95 percent of the world's customers are located outside of the United States" and that "30 percent of U.S. businesses indicated that they would be interested in exporting (Klobuchar renews call, 2010)."

One other viable method of promoting U.S. exports is giving businesses that are unable to cover the cost of exporting goods the money to cover the costs, otherwise known as trade financing. Firms that do not generate enough revenue to cover the costs needed for exporting goods are urged to ask for assistance in doing so from federal organizations such as the Small Business Administration (SBA) or the Export-Import Bank if reasonable financing is not available to them first (Ewer and Williams, 1998). The SBA finances businesses in the form of working capital loans which may be used to "finance the manufacture of goods for export, purchase goods or services for export, finance receivables resulting from export sales, and support stand-by letters of credit (Ewer and Williams, 1998)." Long-term, fixed-asset financing is also offered by the SBA through the International Trade Loan Program, but poor credit would naturally affect the eligibility