Obama wants to double exports, and Minnesota offers some lessons

WASHINGTON, D.C. — There are no roads at the South Pole, a foreboding landscape of snow and ice where normal off-road tires just don’t work. Instead, Antarctic researchers use Mattracks, a conversion system that replaces tires with all-terrain rubber tracks that increase traction and spread out the weight of the trucks they propel and allow them to run on snow, sand or in marshlands.

Mattracks are made by a firm of the same name in Karlstad, a small town in northwest Minnesota near the Canadian and North Dakota borders, and then shipped to more than 50 countries and all seven continents. In 2000, exports accounted for 15 percent of sales, now exports make up a majority of their business.

It’s success stories like Mattracks that the Obama administration hopes to replicate nationwide, as the White House aims to double the number of U.S. exports in the next five years. To do that, the administration will begin a cabinet-level task force that aims to facilitate inter-agency work to facilitate the promotion of U.S. exports.

“This is the first time in history that we’re having a government-wide export promotion strategy directed by the president and run at a cabinet level,” Commerce Secretary Gary Locke said, adding that the task force would meet for the first time within the “next few weeks.”

“It’s very doable actually,” said Dean Gorder, general manager of Mattracks, Inc. “If part of that deal is to get trade barriers reduced, that would be a great help.”

Innovative style in Minnesota
Achieving that goal will require Minnesota to double its exporting efforts — which are already on an upward trend. Minnesota exports grew by 50 percent over the past five years.

Source: DoC. Figures from 2008

Minnesota’s export growth is a testament to “the innovative style of Minnesota companies like 3M, like Cargill,” said Doug Loon, vice president of regional affairs for the U.S. Chamber of Commerce based at their Midwest office in Eden Prairie.

“From what we see talking to businesses around the state, and our understanding of economic recovery, we think increasing exports is really critical,” Bill Blazar, senior vice president of the Minnesota Chamber of Commerce.

Blazar said the two biggest keys to increasing exports are to continue innovating, and lowering the cost of doing business in the United States.

Gorder pointed out an additional impediment — trade barriers to market entry in foreign countries. Thanks to distribution costs and 35 percent tariffs, a Mattracks conversion system for a Ford F-250 that retails for $35,000 in Minnesota could cost up to $70,000 in Brazil, a cost increase that Gorder said makes international growth more difficult.

“To double exports in five years, they’re going to have to stop using trade as a bargaining chip in other fights,” Gorder said.

Locke said the administration would look to renegotiate trade agreements, and is pushing Congress to approve trade agreements with South Korea, Colombia and Panama.

Source: Department of Commerce. Figures from 2008

Sen. Amy Klobuchar will have a large role to play in shaping the future of exports, as she chairs the Senate Commerce Subcommittee on Competitiveness, Innovation and Export Promotion. In October, she held a subcommittee meeting at which Mattracks was held up as an example of a successful American small business in the global marketplace.

“Exporting is literally a world of opportunity,” Klobuchar said then. “Over 95 percent of the world’s customers are located outside the United States. Increasing our exports will mean more business, more jobs and more growth for the American economy.”

Derek Wallbank is MinnPost’s Washington, D.C., correspondent and can be reached at wallbank[at]minnpost[dot]com.

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Comments (2)

  1. Submitted by David Broden on 02/08/2010 - 11:22 am.

    Minnesota and exports is almost a automatic growth capability. As I have read and listened to the various articles and comments the past few days I am however very amazed that the largest of Mn business for export–agri products is hardly mentioned–why is this not a focus–there are many export grow opportunities in the agri world. Perhaps some of those commenting seem to have forgotten that Mn has a agri business component. With that said lets look across the state. If we have grown as the article in Mn Post suggest 50% in the past 5 years we are leaders. Why does it take another federal government program to make the basic business economy work. Give the econmic engines some credit and move away from some of the protectionism words we keep hearing and let the international trade agreements and barriers keep growing our opportunities. We do not need more programs to do that which will work.

    Dave Broden

  2. Submitted by Bernice Vetsch on 02/08/2010 - 12:26 pm.

    We should NOT forget, however, that high tariffs may be the only way smaller countries can protect themselves against our exporters – especially agribusiness giants.

    Many of the trade agreements foisted upon … oh pardon me … negotiated by the Bush and Clinton adminstrations after CAFTA required poor countries to open their markets to US exports, with awful results for them.

    Among Mexico’s basic diet components are beans and corn. As soon as it signed on to CAFTA, our agribusiness companies flooded its market with underpriced corn and beans. Mexican citizens bought at the low prices until 15 million of its farmers were forced out of business. After which prices rose until Mexicans rioted in the streets of Mexico City AND hundreds of thousands of the bankrupted farmers began to cross over our border seeking work.

    Other agreements tied IMF or World Bank aid to privatization of previously public industries like communications and manufacture of essential goods. Presidents of countries that didn’t want to privatize (Aristide of Haiti and Zelaya of Honduras for example) were sometimes abducted and carried off by the US.

    And there are the corporations that relocated in Latin American countries without laws against pollution and polluted their hearts out.

    We have yet to begin to clean up our act but should be forced to do it before we think about “opening” yet more markets. We have yet to begin to support truly democratic movements in such countries instead of the wealthy elites who have ruled them for decades or centuries.

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