Doubling U.S. exports in the next five years, as President Obama called for in his State of the Union address, is an “incredibly important” move to get the economy growing again, Sen. Amy Klobuchar said after a Wednesday meeting at which she urged local small-businesses executives to look outside our borders for their growth.
Klobuchar, who sits on the Commerce Committee and chairs the Senate Subcommittee on Competitiveness, Innovation and Exports, has been bringing a parade of federal agency officials around the state over the past four months to encourage more small businesses to expand their horizons beyond North American markets.
Her most recent foray, held Wednesday at Williams Sound in Eden Prairie, (a hearing assistance device manufacturer) brought Fred Hochberg, president of the Export-Import Bank (Ex-Im Bank), as well as regional representatives from the U.S. Small Business Administration and Commerce Department’s U.S. & Foreign Commercial Service Division to explain how the federal agencies can help with financing, research, trade assistance and promotion.
While 30 percent of small businesses say they want to export, many of them lack the expertise, financing and resources to develop export markets, Klobuchar said.
Reminding the audience that such major Minnesota exporters as 3M and Medtronic began as small businesses, she urged the audience to use the federal agencies to explore markets beyond the United States.
Klobuchar pointed to two recent Minnesota successes in which small businesses worked with federal agencies on export efforts: Karlstad-based Matttracks, which manufactures conversion kits for 4×4 vehicles) and Brownsdale -based Akkerman Co., which handles construction tunneling equipment. “And these are guys that don’t like the federal government that much,” she noted.
Small business represents about 1 percent of U.S. exports, according to Hochberg, and 58 percent of all U.S. exports go to Canada and Mexico, so the growth opportunity lies in getting more small businesses targeting markets outside of North America. Hochberg noted that U.S. exports as a percentage of the total economy fell to 11 percent in 2009, from 13 percent in 2008, about the level of a decade ago.
China recently pulled ahead of Germany as the largest export economy in the world. With the United States still the largest economy overall, Hochberg said “there is no reason” the nation cannot increase its level of exports. He asserted that foreign U.S. companies are viewed favorably, compared with China, particularly where U.S. companies compete on quality, not cost.
The Export-Import Bank is the lender of last resort to assist in financing the export of U.S. goods and services to international markets by providing working capital guarantees, credit insurance, loan guarantees and direct loans. In the past five years, the Export-Import Bank has financed more than $675 million in exports from Minnesota, supporting 110 companies across the state.
With the recent credit squeeze among commercial banks, the Ex-Im Bank has become a lender to companies that have seen their commercial lines of credit dry up, according to Jan Blaho, business development officer with the Export-Import Bank.
Earlier this month, Commerce Secretary Gary Locke announced a National Export Initiative with the goal of doubling U.S. exports over the next five years. Such an increase, officials say, will support 2 million U.S. jobs. The initiative will strengthen the Export-Import Bank’s support for small and mid-sized businesses, increasing available credit by 50 percent, from $4 billion to $6 billion, in the next year.
Klobuchar also said she will co-sponsor legislation next week to restore staffing at the U.S. & Foreign Commercial Service to its 2004 level and expand the Commerce Department’s Rural Export Initiative (created in 2006 as a pilot project) to make sure rural businesses have access to the government’s export services.
The Minnesota District Export Council will bring in 20 U.S. trade representatives from around the world to meet with local businesses May 11 and 12. For more information on that conference, go here.