New federal export initiative includes more grant money for states

During his State of the Union address in 2010, President Barack Obama announced his plans for the National Export Initiative, the goal of which is to double U.S. exports by 2015. Meeting this objective would result in an additional 2 million jobs, administration officials estimate.

Stateline Midwest Volume 20, No 6: June 2011

During his State of the Union address in 2010, President Barack Obama announced his plans for the National Export Initiative, the goal of which is to double U.S. exports by 2015.

Meeting this objective would result in an additional 2 million jobs, administration officials estimate.

Traditionally, export assistance at the federal level has been fragmented. According to Joe Hurd, chair of the Trade Promotion Coordinating Council, 18 different federal agencies have a role in various aspects of export promotion.

The executive order creating the new federal initiative established an Export Promotion Cabinet, made up of a number of cabinet-level officials and agency directors.

In addition to trying to better coordinate export-development efforts at the federal level, the newly formed cabinet has developed 70 recommendations (published in September 2010) for how to increase U.S. exports. (Another document outlining a national export strategy was expected to be issued in June.)

One recommendation of the 2010 report focused on providing more coordinated export advocacy overseas. For example, senior-level executive officials in relevant agencies are now reporting their travel schedules. If a U.S. company is being considered for a government contract in another country, all department officials going to that country, for nearly any purpose, will be asked to mention this in their meetings.

In all, eight priority areas are targeted in the 70 recommendations. They include expanding government loan programs for exporters and negotiating international agreements that remove trade barriers in other countries.

Another priority is to provide additional assistance to small and mid-sized enterprises (companies with 500 or fewer employees).

For these firms, export assistance has often come from states, and the federal government is looking to expand on these state-level initiatives. Under the three-year State Trade and Export Promotion (STEP) pilot program, up to $90 million in federal grants will be provided to states.

State initiatives likely to be funded through STEP include training workshops; support for overseas travel to develop foreign markets; and help in creating marketing products, campaigns and trade show exhibits.

This federal assistance comes at a time when states are struggling to maintain their export-assistance activities.

According to a recent survey done by the State International Development Organizations, an association of state trade agencies, more than two-thirds of the states cut funding last year to their international programs. The average reduction was 10 percent. Collectively, though, states have historically devoted more staff resources to trade promotion than has the federal government, SIDO says. In 2008, states spent a combined $103 million on small-business export promotion and on attracting foreign plants and investment.