The National Export Initiative and Creating New Jobs
A U.S. Presidential Executive Order released in March 2010, created the National Export Initiative. The goal of the initiative is to double U.S. exports and create two million new jobs over the next five years. The policy is expected to promote global economic recovery by boosting American exports, jobs and economic growth. The initiative offers a coordinated government effort to support companies trying to sell overseas and to strengthen U.S. trade relations with other countries. Top leaders from the Departments of Commerce, Agriculture, Treasury and State, the Small Business Administration, the U.S. Trade Representative, and the Export-Import Bank will form an Export Promotion Cabinet. The cabinet will plan strategies to improve market access through education, expansion of trade advocacy and credit, and enforcement of trade, labor and environmental rights.
Details of the initiative include promotional, logistical and financing assistance for small- and medium-sized businesses. Roughly 3.7 million American jobs are supported by exports. In 2009, U.S. exports were estimated at $1.54 trillion, down from $1.83 trillion in 2008. Furniture-related exports accounted for more than $7 billion in 2009, with about $115 million from Mississippi. Prior to the initiative, the U.S. Chamber of Commerce had been working to double exports in an effort to create 20 million new jobs during the next ten years, replacing seven million full time jobs lost in the current recession and adding 13 million additional jobs needed to achieve full employment in 2020. Exports are 11 percent of the U.S. gross domestic product compared to 40 percent in China, 36 percent in Canada, and 22 percent in India. A recent study conducted by the National Association of Manufacturers estimated that updating export controls could boost U.S. exports by nearly $56 billion annually over a 10-year period. It also estimated that international trade is responsible for the financial stability of one in five Americans. The nation’s large industrial trade association also stated that policies which open markets around the world to U.S. manufacturers and remove outdated export control laws could create more than 160,000 manufacturing jobs by 2020. This would also require action on three pending free-trade agreements with South Korea, Panama and Columbia.
Export growth creates income opportunities and access to foreign markets, resulting in additional and higher-quality jobs. While the U.S. is a major exporter, many U.S. companies don’t export simply because they haven’t had the resources to enter markets in other countries. Exporting allows businesses to sell beyond their domestic market and increase production, sales, and jobs. Businesses that export employ almost twice as many workers and produce about twice as much as non-exporting businesses. These global-thinking companies usually pay their employees higher wages. Increased productivity from exporting also makes companies more cost-effective and profitable.
Making the Most of U.S. Free Trade Agreements
While there is much controversy on whether "free trade" limits the United States' ability to be independent and compete in the global community, free trade agreements have been a major aspect of recent U.S. trade policy. These agreements reduce or eliminate duties for goods that cross the borders of participating countries. Export growth was one of the few highlights in the U.S. economic performance during 2008 and, according to the International Trade Administration, year-to-date as of August 2009, U.S. manufactured goods exports have accounted for 81.8% of all U.S. exports of goods. The various free trade agreements (FTAs) and free trade zones (FTZs) available offer the potential of reaching previously untapped markets for U.S. manufacturers of goods.
The United States is one of the most open economies in the world. Manufacturing exports have increased more than 128% in the last decade. Free Trade Agreements lead to the expansion of import and export markets and an elimination of barriers. FTAs also provide a boundless stream of goods and contribute to the improvement of a competitive environment. In addition, FTAs present opportunities for small and medium businesses to improve their market access. The U.S. currently has FTAs in 17 countries, with three additional agreements pending. For furniture manufacturers to capitalize on the low- or no-tariff provision of FTAs, the entire supply chain must be evaluated—starting with where raw materials and components are being purchased to where the final products are being sold.
The U.S. is able to take advantage of a large percentage of goods that become duty-free almost immediately through FTAs. For example, in a report from the U.S. Government Accountability Office published in July 2009, in the Morocco FTA, duties on more than 95% of consumer and industrial products were eliminated when it went into effect. In Chile, the FTA allowed for immediate duty-free market access for about 85% of all U.S. consumer and industrial goods. Increases in total U.S. exports ranged from 72% for Singapore to 365% for Chile upon implementation of FTAs with those countries. The U.S.-Australia FTA has helped the two countries to expand trade and increase investments. While Australia exports aluminum, copper, and dairy products, they import much of their clothing, electronics and furniture. Since this FTA went into effect in 2005, trade between the U.S. and Australia has increased by 51%, reaching $32.8 billion in 2008. The pending U.S. Free Trade Agreements with Panama, South Korea, and Columbia are also expected to improve the flow of goods and should further benefit the U.S. furniture industry.
Consumers and manufacturers are the biggest winners in FTAs. While the domestic housing market continues to be depressed, real estate investments in other countries are booming. This has created a need for furniture in large-scale, residential and commercial developments. Jordan is one example where new developments have resulted in a significant demand for all types of furnishings and the Jordanian market is very positive toward U.S. imports. The current U.S.-Jordan FTA eliminates most duties and barriers to bilateral trade in all goods. Since the United States, Mexico, and Canada launched the North American Free Trade Agreement (NAFTA) 15 years ago, trade has increased, investment has grown, and the economies of the three countries have become more competitive. The Office of the U.S. Trade Representative reported that from 1993 to 2008, trade among the NAFTA countries more than tripled, from $297 billion to $946.1 billion. It's easy to see why Canada is the U.S.'s leading trade partner—it's convenient for purposes of shipping and for meeting buyers, the population speaks English, and buyers have a preference for many of the products manufactured in the U.S., including furniture.
Perhaps not as important as it once was as other nations develop products, but "Made in America" still means innovation, high quality, safety and reliability in many countries today. Business processes can be improved by bringing providers, shippers, consumers and goods closer together and strengthening the U.S. furniture industry's global commerce. A well-run supply chain can be a competitive advantage that improves the exporting success and free trade agreements can provide both direct and indirect benefits. Some of these benefits include tariff cuts, favorable trade and investment trends, and an improved framework for market access. Furniture manufacturers and suppliers should be encouraged to try exporting. Free trade offers opportunities to utilize creative and efficient ways to further open markets.Hide Text
Frequently Asked Questions
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Q: I think that my company’s product would be successful in other countries, but I’m not sure how to get started in international business. Is there help for new exporters?
Exporting can be profitable for U.S. companies, large and small. To learn more about getting started, visit the Export Basics
section on the U.S. government’s export portal, export.gov
. You’ll be able to take the Export Readiness Assessment and learn how to prepare to enter new markets. You can also talk to trade specialists at the U.S. Commercial Service’s Trade Information Center. Call 1-800-USA-TRAD(E)
Q: I’m shipping my product to Canada. How do I fill out a NAFTA Certificate of Origin? Are there other documents to be filled out?
Your shipment may need a NAFTA Certificate of Origin and a Shipper’s Export Declaration. To learn more about export documentation, please visit export.gov
to learn more.
The U.S. Commercial Service’s Trade Information Center or the trade specialists at your local Export Assistance Center can also help you answer these questions. Call 1-800-USA-TRAD(E) or find your local Export Assistance Center
Q: How can I learn more about my product or service’s sales potential in overseas markets?
Market Research is good first step to learn about the sales potential of your product or service in countries abroad. The U.S. Commercial Service offers free online market research to U.S. companies seeking to enter international markets. Our database allows you to sort by country, industry and/or type of market report. Visit our Market Research Library
and register to access these reports.
Q: How can I locate importers, distributors, sales reps, etc. in an overseas market?
The U.S. Commercial Service has programs and services to help you locate potential business partners overseas. Contact your nearest U.S. Export Assistance Center and speak with an International Trade Specialist. You can also receive free export counseling and learn more about our programs and services to help you compete around the globe. Call 1-800-USA-TRAD(E) or visit export.gov
to find your local Export Assistance Center.
Q: What can Market Access and Compliance (MAC) do to help your business?
After you contact ITA's Trade Compliance Center or the country desk in one of ITA’s regional offices, MAC will evaluate whether the problem is a market access issue or a compliance problem with an existing trade agreement. MAC will establish a team of experts on the country, the industry, the trade agreement, and other needed areas. The team will review all possible options to resolve the problem and then work through each tactic towards a solution.
Q: What is the difference between Market Access and Compliance?
Market Access – U.S. exporters sometimes encounter trade barriers. For instance, a country may only allow products to enter the most inconvenient port or a country may treat imported goods differently than domestic goods. MAC receives calls from businesses, associations and international U.S. commercial offices, and ITA then maps out a plan to solve the problem.
Compliance – The United States is a party in over 250 trade agreements. But trade agreements are only paper unless foreign governments comply with their obligations. MAC addresses compliance problems quickly and aggressively. Once a problem is identified, ITA organizes a team to outline and implement a solution.
Q: What are some common trade problems MAC can help U.S. businesses overcome?
MAC provides help with the following common trade problems through the Trade Compliance Center
- Tariff and customs barriers
- Service barriers
- Standards, testing, labeling, or certification barriers
- Rules of origin
- Government procurement contract barriers
- Intellectual property protection problems
- Excessive government requirements
- Excessive testing or licensing fees
Q: What do MAC services cost?
MAC’s services are free of charge to all U.S. businesses.
Q: What is Dumping?
Dumping occurs when a foreign producer sells a product in the United States at a price that is below that producer's sales price in the country of origin (home market), or at a price that is lower than the cost of production. The difference between the price (or cost) in the foreign market and the price in the U.S. market is called the dumping margin. Unless the conduct falls within the legal definition of dumping as specified in U.S. law, a foreign producer selling imports at prices below those of American products is not necessarily dumping.
Q: What is a Countervailable Subsidy?
Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market conditions. The statute and regulations establish standards for determining when an unfair subsidy has been conferred. The amount of subsidies the foreign producer receives from the government is the basis for the subsidy rate by which the subsidy is offset, or "countervailed," through higher import duties.
Q: How is Dumping or Subsidization remedied?
If a U.S. industry believes that it is being injured by unfair competition through dumping or subsidization of a foreign product, it may request the imposition of antidumping or countervailing duties by filing a petition with both Import Administration and the United States International Trade Commission. Import Administration investigates foreign producers and governments to determine whether dumping or subsidization has occurred and calculates the amount of dumping or subsidies.
Q: What is the role of the International Trade Commission in AD/CVD investigations?
The International Trade Commission determines whether the domestic industry is suffering material injury as a result of the imports of the dumped or subsidized products. The International Trade Commission considers all relevant economic factors, including the domestic industry's output, sales, market share, employment, and profits. For further information on the International Trade Commission's injury investigation, see http://www.usitc.gov
. Both the International Trade Commission and Import Administration must make affirmative preliminary determinations for an investigation to go forward.
Q: How can I learn more about filing a petition?
Antidumping and countervailing duty trade remedies have been successfully pursued by a variety of domestic industries, including producers of steel, industrial equipment, computer chips, agricultural products, textiles, chemicals, and consumer products. Both the Import Administration and the International Trade Commission have staff available to assist domestic industries in deciding whether there is sufficient evidence to file a petition for antidumping or countervailing duty investigations. The staff may also assist eligible small businesses with the filing process. Contact the Import Administration, Petition Counseling and Analysis Unit at (202) 482-1255 or by e-mail at Petition_Counseling@ita.doc.gov
Q: Why do foreign companies choose to locate in the United States?
Foreign investors invest in the United States because we have an open and welcoming investment climate. The United States has experienced the fastest acceleration of productivity growth among major industrialized countries, enjoys an unparalleled higher education system, benefits from world-class infrastructure, and has the strongest intellectual property rights protections globally. Among others, these factors put the U.S. economy in a position to innovate and quickly take advantage of the rapid advancement in information technology and other new technologies. We believe that international investors in the United States enjoy the best risk-adjusted return on investment globally.
Q: Is the United States becoming more closed to foreign investment?
No. President Obama has been clear with regard to U.S. openness to investment, particularly during this period of global economic upheaval. The activities of Invest in America support this long-standing commitment, as the primary U.S. Government mechanism to coordinate inward investment promotion.
Q: Is there a connection between foreign direct investment (FDI) and exports?
FDI and trade are very closely related. In fact, many foreign firms with operations in the United States have invested to service our domestic market, but also to use our nation as an export platform. Not only does FDI augment the amount of American exports, it also increases employment. FDI has a multiplier effect of creating additional jobs beyond the workers employed directly by the foreign company. FDI increases exports, creates employment and helps grow the American economy.
Q: How do I import products into the United States?
Q: How can I learn about foreign product standards?
Q: How can I learn about import or export licensing?
Q: Where can I ask an expert?
The Export Institute
has an frequently asked questions and answers about exporting. You can also ask an expert your exporting question.