National Export Initiative Provides Help for American Businesses
Q: What is the National Export Initiative?
A: The National Export Initiative (NEI), a federal program launched by President Obama in 2010, aimed to double the amount of American goods, services and agricultural products sold outside of the United States within five years. With a "whole government" approach, the NEI set out to:
• improve advocacy for US exporters
• remove trade barriers
• enforce trade rules
• promote sound economic policies, and
• increase access to trade financing.
The NEI has also emphasized helping smaller U.S. companies enter export markets.
Q: How has the NEI helped American companies sell overseas?
A: To help American companies, the NEI has coordinated U. S. government economic and diplomatic activities, and provides services to U.S. companies selling overseas. This has included working with Canada and Mexico, Ohio's two largest export markets, to implement the Trans-Pacific Partnership, which seeks to liberalize trade throughout the Asia-Pacific region. The NEI has also worked with the Asia-Pacific Cooperation Forum to reduce tariffs on environmental goods, a $27 billion export industry in 2011. The U.S. government also conducted 88 investigations of trade agreement violations at the request of small businesses.
Q: What resources are available to help me find overseas opportunities for my small business?
A: You should be aware of two important services: The U.S. Commercial Service (USCS) and the Export-Import Bank of the United States (EX-IM Bank).
The USCS is a division of the Department of Commerce (DOC) and is essentially the U.S. diplomatic corps for business. Its purpose is to help U.S. businesses find opportunities overseas. The USCS has offices in many cities within the U.S. and employs trade specialists in more than 80 nations. The USCS provides American businesses with comprehensive research on overseas markets, assistance in locating foreign partners, and hosts buying conferences for overseas buyers to visit the United States. For agricultural products, the U.S. Department of Agriculture provides similar services to help U.S. farmers, food and agricultural companies make connections in foreign countries and grow sales overseas. The DOC also organizes trade missions, in which government officials lead a delegation of U.S. companies to foreign countries to meet buyers and make contacts.
The EX-IM Bank is a congressionally chartered credit agency whose mission is to assist in financing the export of American goods and services to international markets. The EX-IM Bank offers an array of financial services to exporters, including working capital loans, loan guarantees, and insurance to help protect against credit risks in international transactions. The EX-IM Bank reported, through fiscal year 2012, $6.1 billion in direct support to small businesses, which comprised 17 percent of all EX-IM Bank authorizations. This included services to 650 new small businesses.
Q: Why might I need a lawyer to assist my small business with international transactions?
A: Exporting creates a different set of concerns than does a purely domestic transaction. As is the case with all business transactions, there is always some risk involved. An attorney can help to identify those risks unique to international trade and devise strategies to avoid them.
For example, if you do not receive payment for your goods, your legal remedies will be vastly different if the buyer is in Brazil rather than in Ohio. Also, standard shipping terms dictate which party pays for transportation, and who is responsible if the goods are damaged before your customer receives them.
There are also other concerns, such as risk of loss of intellectual property, and post-9/11 security regulations, that may discourage companies from pursuing export opportunities. Proper advice can help you manage these concerns, and diversify your sales base to the 95 percent of the world's consumers who are outside of the United States.
This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Columbus attorney Gabriel McCoard.