Exporting: The Grand Illusion Washington-style

Posted on 28. Mar, 2011 by Administrator in Economy

My eyes are blurry.  I just finished reading the 75-page report on the Administration’s National Export Initiative (NEI) prepared by the President’s Export Promotion Cabinet (EPC).  This gem was ginned up in 180 days just in time for the election (though I’m sure not orchestrated to coincide with a White House attack on the Chamber of Commerce that represents the bulk of America’s exporters).

About the same time, I read a review of the report in the Albuquerque Journal (“Expansion of Exports requires recovery,” Oct. 11, 2010). Both accounts made me want to shout, “enough, already” at the top of my lungs!  If you like very old wine in new bottles — a re-packaging of ideas from 20-30 years ago — you will love this report.  Prepared by twenty different government agencies who all have a piece of the exporting portfolio and who form the ‘Trade Promotion Coordinating Committee,’ it is the perfect Washington PR tome designed to cause an uncontrollable bout of head shaking in the private sector. This report was written by bureaucrats for bureaucrats without the help of the President’s Export Council which, incidentally, has no representation from the small business sector. Like, ‘Girls Gone Wild,’ Government revealed its assets for all to see, and they came up short on substance but long on grandiosity.

The most startling is the sub-headline of the report which alludes to a ‘doubling of our exports in five years.’ After reading that I thought I had fallen into the rabbit hole and become part of Alice’s Wonderland.  NASA had an easier time sending astronauts to the moon than it will be for the USA to overcome decades of export lethargy and export illiteracy and double our exports in 60 months. I base my beliefs on an intimate working knowledge of Federal Government trade promotion agencies, America’s manufacturers and 20 years of practical experience as an export specialist in over 24 countries.

The priorities: nothing up its sleeve?

According to the report and the review, priority one is to assist small-to-medium-sized enterprises (SMEs) with a ‘national awareness campaign’ (we tried that for decades with only marginal success); more government trade missions and delegations (New Mexicans know how well those work out); more commercial advocacy for U.S. projects (we’re already at the top of our game);  continued support for exporters once they’ve entered the field (they usually want government to get out of their way at that point); more and easier credit (not usually high on serious exporters’ lists unless they need to tool up for a big foreign order). Then there is the usual, ‘better tracking of (GOV) export services, designed to improve policy-making,’ thrown out to appease the smaller government crowd.

There is also a policy wonk euphemism hiding in every report. My favorite in this one has to be the ‘macroeconomic rebalancing’ – a kind of ‘tough love’ program for the G20 trading partners that enables us to convince them to let us bend the international trading rules to get our jobs back from overseas. Ever heard of a lead balloon?   In short, the report and the review have something in common. They are both candidates for the Siegfried and Roy award for shifting realities.  Instead of dragging out the same old worn-out remedies in a ‘new and improved’ initiative to nowhere, what’s really needed are five things.

Five Essential Underpinnings

If we are to see even a modest growth in exports we will need five basic conditions or things to happen:

1. A resurgence of corporate interest in manufacturing and attendant investment

2. New, ‘return to the USA’ manufacturers’ incentives to bring back jobs

3. Better industrial and product design (we cannot sell ‘modified’ U.S.-style products to
sophisticated international customers)

4. More and better market information/commercial intelligence

5. Less government intervention not more

Our trade deficit is already running at an alarming $50 billion/month, of which $25 billion plus is with China! We have no time to wait around for a “global turnaround” or a “domestic recovery” to begin exporting (as the reviewer of the article suggests). A wait and see attitude has never favored the winners in any contest. Those who delay their plans or investments may save some money now, but will lose market share when the turnaround does come. The cost of catching up is infinitely greater when you’re way behind the curve. Just ask the authors of the report.

Stephan Helgesen is the former Director of the State of NM Office of Science and Technology and retired Foreign Service Officer who has worked in 24 countries. He is CEO of Second Opinion Marketing, a high technology consulting company in Albuquerque and Honorary German Consul in New Mexico.

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