SBEA Calls for Strengthened Export Promotion Programs

While Congress focuses on stimulating the U.S. economy, a key ingredient of U.S. economic success–exporting–looks like it will be weakened. The U.S. Commercial Service (USCS), which has been indispensable in helping small exporters find overseas buyers and distributors, is slated to be reduced in size. The USCS is a part of the U.S. Department of Commerce, and has officers stationed in U.S. Embassies around the world where they help exporters, on a fee-for-service basis, find buyers and distributors. Most of America’s major global competitors have similar operations.

SBEA is asking Congress to strengthen this important exporting support function.

For the past seven quarters, exports have been one of the few bright spots in the U.S. economy. With the banking crisis plunging the country into an apparently deep recession, every innate source of economic strength needs to be reinforced–exporting being one.

Demand for “Made in USA” goods and services remains notably strong in many developing countries, where economic growth is expected to continue in 2009, according to projections by the International Monetary Fund and the World Trade Organization. Developing countries abound in niche markets, for which smaller U.S. exporters are ideally suited. But small companies don’t have networks of foreign sales agents. To identify bona fide buyers and distributors, small exporters typically depend on the USCS.

The USCS delivers great assistance to small companies whose export sales add up to a significant amount of business. Last year, the USCS provided documented assistance to over $80 billion in U.S. exports, thereby supporting tens of thousands of high-paying jobs in the U.S. According to an analysis by the White House Office of Management and Budget last year, each $1 spent on the USCS yields $415 in exports.

Today, the USCS is struggling to meet spending mandates that require it to divert over $20 million annually to the State Department. One result has been the loss of hundreds of USCS positions through attrition in the past five years. Just since 2007, 19 USCS overseas posts have been closed. Unfortunately, proposed appropriations cuts by the Senate would reduce the USCS by another $3 million.

Now is the time to reinforce–-not further weaken-–the vital support USCS provides for exporters and increase the USCS budget. SBEA is urging Congress to restore the cuts and help the USCS do more to bolster U.S. exports.