Exports and imports play a critical role in the economic viability of the United States in today’s global economy, especially given the huge and growing trade deficit, which was $62.3 billion for February, 2008 — $3.3 billion above the January figures.
Because exports reduce this trade deficit and keep jobs within our borders, the government is actively encouraging companies to export, not just through the NAFTA and CAFTA free trade agreements, but through hands-on help during the export process. These exports can also give companies a healthy boost, particularly in a slow economy, by accelerating their sales.
Companies must decide, of course, whether exports make sense for them, but if they do not at least consider the possibility, warns Thomas Mottley, senior international trade specialist of the U.S. Department of Commerce’s International Trade Administration, they may come out losers. “The world is getting smaller,” he says. “If you’re not there, your competitor is.” He adds that export sales help flatten peaks and valleys in the business cycle. “If the domestic market dips, you have the international to balance it out.”
Mottley has worked so far with about 350 companies through the Trenton Export Assistance Center, which covers Mercer, Monmouth, and Middlesex Counties. He will speak at an exporter workshop titled “Export to Mexico and Central America Using Free Trade Agreements” on Friday, May 9, at 8:30 a.m. at the HR Young Auditorium at Monmouth University. The event is being offered by the U.S. Department of Commerce, Trenton Export Assistance Center, and Commerce Bank. Cost: $65. For registration info, E-mail firstname.lastname@example.org or call 732-571-3636. For seminar content questions, E-mail email@example.com or call 732-571-3641.
Featured speakers include Michael McGee, regional commercial counselor for Central America, at the U.S. Embassy in El Salvador, and Karen Zens, minister counselor for commercial affairs at the U.S. Embassy in Mexico City. Other participants include Gerald Rama, senior vice president of international trade finance at Commerce Bank; Margaret Gatti, who heads the international law group at Dilworth Paxson; Daniel Petrosini, president of Alpha International; Sharyn Koenig, New Jersey representative of the Export Import Bank of the United States; and Thomas Fino, president of Atlantic Sales & Salvage of East Brunswick, which will receive the U.S. Department of Commerce Export Achievement Certificate for export sales to the Dominican Republic.
Mottley has had an abiding interest in what is happening outside U.S. borders. After growing up in Long Branch, he went to West Virginia University, where he received both bachelor and master’s degrees in international affairs. He worked for the Department of Commerce, but also spent time with a New York money center bank’s international division and a Japanese trading company.
Mottley rejoined Commerce at its New York office in the early 1990s, where he worked with the United Nations, diamond cutters, and “Silicon Alley,” the group of startup Internet companies in lower Manhattan. The diamond cutters make finished diamonds and manufacture jewelry in Manhattan, and Mottley helped them to export their products. He also worked to get more American sales into the United Nations system, which makes purchases for its own use as well as for its peace-keeping missions.
In 2000 the commute from Long Branch was wearing thin and Mottley transferred to his current job, where he both visits companies to introduce them to exporting and runs workshops, seminars, and conferences about various aspects of exporting. Although he is associated with the Trenton office, he works out of Monmouth University, also partnering with them in programming he develops.
Mottley’s mission is to help central and southern New Jersey companies to compete effectively in foreign markets and educate them about the people and institutions in place to help them from start to finish. He has a number of suggestions:
All that glitters. Use the Gold Key program to identify and meet with qualified importers, distributors, reps, and agents. Since 1980, under President Jimmy Carter, this program has allowed United States companies to work with Department of Commerce employees who staff the foreign commercial service at American embassies. Mottley explains, “Just as I encourage companies in central New Jersey to look for markets, we have people overseas with industry specializations to develop contacts and to be the eyes and ears of United States companies.”
Exporters from the United States, he explains, sell through distributors in the countries they are targeting. “The distributor is your authorized rep in a particular country,” he says. “He buys your product on a regular basis that is outlined in the distributor contract.”
The relationship with the distributor is close and strategic and through the Gold Key program, the two players can feel each other out to see if they will make a good marriage. The partners must make sure they will be comfortable working together on an ongoing basis; the distributor will be coming to the States for training, the exporter visiting the target country; and the two partners doing trade shows together. At the end of the Gold Key program, the exporting company should feel it has a trusted partner in place in the target country.
Use the Export Import Bank of the United States for secure payments. The Export Import Bank is a federal agency that works with American companies on financial matters involving exports, for example, securing payments for a manufacturer or providing credit to a foreign customer. The bank can write a credit insurance policy that allows shipment on an open account with the receivable assured by the bank if the customer passes muster.
Use a freight forwarder to properly ship goods outside the country. Freight forwarders are private companies that handle every aspect of shipping. A forwarder will contract to pick up your cargo, ensure that containers are labeled properly, make sure that documents are correct and include the appropriate certifications, and send trucks to pick up your goods and take them to the airport or to a ship.
Use an attorney who specializes in legal issues around exporting. The attorney will make sure that a company’s product or service meets the 51 percent United States content standard necessary to qualify under the free trade and will also develop the distributor contract.
With the domestic economy tanking, companies are increasingly interested in exporting, but that will change as things improve, says Mottley. His agenda, however, is longer term. “We want companies in international markets for the long haul,” he says. “To be more competitive overseas. The Internet has made the world much smaller, and we want to be there.”