President Barack Obama’s goal of doubling exports by the close of fiscal year 2014 has been met with both skepticism and support. The National Export Initiative’s executive director, Michael Masserman, is a key figure in meeting that target, and he spoke with IMT about supporting and expanding small-business exports.
As executive director for export policy, promotion, and strategy with the U.S. Dept. of Commerce, Masserman is charged with executing the National Export Initiative (NEI), under which the export-doubling goal falls. In an exclusive interview with IMT, Masserman discussed the challenges facing the NEI, as well as sharing insights about how U.S. businesses can take advantage of NEI programs.
Masserman explained that the NEI’s mission is “to improve the conditions that directly affect the private sector’s ability to export – working to remove trade barriers abroad, help firms and farmers overcome hurdles to entering new markets, and assist with financing.”
The Dept. of Commerce acknowledges that only 1 percent of American businesses export products. Masserman explained that this was because “many smaller companies mistakenly believe that exporting is too complicated and just for large firms, or they are not aware of all the export and financing resources available to them.”
He insisted that the exporting process is simple enough for even the smallest businesses to accomplish, thanks to the Internet, international logistics and shipping services, the availability of trade financing, and U.S. government assistance programs. “If a business has a strong track record of selling in the U.S., one of the world’s most open and competitive markets, it’s likely a good candidate for making international sales,” he said.
But a low percentage of exporting businesses is not the core obstacle for the NEI, according to Masserman. “As the president has said, the U.S. needs to buy less and sell more, which is why his administration is focused on supporting exports,” he stated, noting that in 2012 the annual trade deficit actually dropped by nearly $20 billion to $540 billion.
“Despite global economic headwinds, our exports are still growing faster than our imports,” he added. “In 2012, growth in exports of goods and services outpaced the growth of imports of goods and services in both dollar and percentage terms for the first time since 2007, with exports growing by $92.6 billion or 4.4 percent. This trend has continued into the first two months of 2013, according to the latest data.”
Still, the U.S. has achieved only 40 percent of the growth needed to double exports, meaning the remaining 60 percent of growth has to take place in the next two years. Masserman implied that the U.S. economy is already on track.
“The U.S. is now selling more goods and services to the 95 percent of consumers who live outside of our borders than at any time in our history,” Masserman noted. “In 2012, U.S. exports hit an all-time record at $2.2 trillion, building on the record-setting performance of 2011 and in the face of significant global headwinds.”
Masserman also emphasized that increasing exports is only part of the goal, as the Obama administration also hopes to create 2 million high-paying, export-related jobs. “Record-breaking levels of U.S. exports through 2012 supported an additional 1.3 million U.S. jobs – so we are more than 60 percent of the way to creating 2 million additional jobs just two years into our effort, well ahead of schedule,” he said.
Among the many ways the Obama administration is trying to grow exports is a series of trade partnerships. However, the Transatlantic Trade and Investment Partnership, which would further open trade with Europe, has been criticized since the E.U. is struggling with a financial crisis.
While Masserman acknowledged that U.S. sales to Europe have fallen, he noted that certain key sectors have actually improved, including aerospace, pharmaceuticals and medicines, petroleum and coal products, medical equipment, motor vehicles, and agricultural and construction machinery. The largest increases, according to Masserman, were in France, Austria, Luxembourg, Cyprus, and parts of Central Europe, including the Czech Republic, Poland, Hungary, and Slovakia.
He further justified the trade agreement by highlighting its size and scope: “The U.S.-E.U. economic relationship is already the world’s largest, accounting for one-third of total goods and services trade and nearly half of global economic output.”
So, what about the world’s fastest-growing economies: Brazil, India, and China? They have not been neglected, according to Masserman. “The Obama administration uses many other tools in addition to trade negotiations to improve trade relations with countries across the globe, such as the Joint Committee on Commerce and Trade with China. The U.S.-Brazil Commercial Dialogues and the U.S.-Brazil CEO Forum are evidence of the administration’s commitment to strengthening the U.S.-Brazil economic relationship. Additionally, we have led trade missions to India, as well as to several [other] countries around the globe.”
The best potential for export growth lies in helping small- and medium-sized enterprises (SMEs) establish themselves and expand internationally, and that’s where much of the NEI’s efforts are focused.
“Exports by SMEs totaled $440 billion in 2011, representing more than one-third of total U.S. exports. This confirms that small-business exports continue to grow and reaffirms our focus on ensuring small businesses know about and have access to the federal resources available to assist them,” Masserman said.
Masserman touted the work of the Export-Import (Ex-Im) Bank and the Small Business Administration (SBA) in helping support SMEs. He attributed the Ex-Im with helping 3,300 small businesses expand their exports in 2012, 650 of which had never worked with Ex-Im before.
Meanwhile, the SBA has backed more than 2,400 loans to 3,500 small businesses through its financing programs and has trained 273 Small Business Development Center counselors to help small businesses new to the exporting market, he explained.
“We recognize there is still more work to do,” Masserman said. “That is why the Obama Administration continues to do everything possible to support American farmers, workers, and businesses as they compete in the global marketplace.”