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San-Diego/Tijuana Mega-Region Drives and Expands Bilateral Trade

April 20, 2015

This post contains external links. Please review our external linking policy.

John Andersen is the International Trade Administration’s Deputy Assistant Secretary for the Western Hemisphere.

Last week, I traveled to San Diego and Tijuana to meet with companies on both sides of the border and learn about the dynamic coproduction in the U.S.-Mexico border region. More than $1.5 billion in trade crosses the U.S.-Mexico border every day and much of that value is generated in the largest metropolis between San Diego and Tijuana.

While in Tijuana I toured the Welch Allyn plant, a medical device manufacturing facility that sources more than 85 percent of its inputs from the United States. The company, which is headquartered in upstate New York, selected its Baja California location to be close to its largest consumer market, North America.

While in Mexico, I also met with the dynamic binational Smart Border Coalition, a group that works diligently to improve efficiencies along the various border crossings between California and Baja California. In our discussion, we talked about how we could work together better to hasten the development of important cross-border land ports of entry, including the Xpress Airport facility that will provide U.S. citizens with direct access to the Tijuana International Airport; the proposed Otay Mesa East crossing, which will double commercial vehicle crossing capacity in San Diego County; and reactivation of the desert railroad line that will allow regional manufacturers to export their heavy manufactured goods at a lower cost. The U.S. Department of Commerce will help facilitate these projects within the U.S. government border management process, and binationally with Mexico, to increase border capacity at new and existing ports of entry.

After returning to San Diego via the San Ysidro port of entry, the busiest land border of entry in the world, I met with several U.S. companies based in San Diego County to understand and address their export concerns. One of the companies I spoke with at length, Taylor Guitars,   successfully exports their products to several markets overseas.

Taylor Guitars shared that they have recently been battling counterfeit products imported from China. I explained that one of the Obama administration’s top priorities is to expand free trade agreements, which will establish common standards and protections for U.S. companies. Free trade agreements, not only reduce trade barriers, allowing U.S. products to enter foreign markets at lower prices, but they also ensure that U.S. companies have recourse to combat corrupt practices of competitors and provide protections for intellectual property rights for U.S. companies.

The administration is currently negotiating the Trans-Pacific Partnership (TPP) agreement, which will link the United States with growing markets in Latin America and Asia. It is estimated that in the next two decades, nearly 50 percent of the world’s economic growth will come from the Asia-Pacific region, yielding almost one billion new middle-class consumers.

The businesses I spoke with in San Diego were supportive of the administration’s goal to expand U.S. free trade agreements and understood the importance of Trade Promotion Authority which will allow the executive branch to secure the best trade deals possible for U.S. companies. The companies expressed their hope that TPP would enable them to expand their exports into the rapidly growing Asia-Pacific region and help them to better protect their intellectual property.

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U.S. and Canada Sign Historic Preclearance Agreement

April 16, 2015

Andres Leon is an intern in the International Trade Administration’s Office of North America.

Update: April 20, 2015: This post was updated to provide additional information about “preclearance.”

The United States and Canada have a $1.3 trillion trade and investment relationship. The broad scope of U.S.-Canadian bilateral relations includes extensive economic, cultural, and educational ties with nearly $2 billion in two-way trade in goods and services, and more than 300,000 border crossings each day.

As a result, the United States and Canada signed a historic cross-border agreement on March 16, 2015 that will further benefit travelers and enhance trade in North America. The Agreement on Land, Rail, Marine, and Air Transport Preclearance Between the Government of the United States and the Government of Canada, also known as “Preclearance,” creates the opportunity for requests for new preclearance locations and enables exploration of co-location at small and remote ports of entry. It also enables Canada to request the conversion of immigration pre-inspection sites at cruise, rail, and ferry terminals in British Columbia to full preclearance.

Preclearance customs inspection points have reduced waiting times and congestion at designated points of entry, while also strengthening security along the U.S.-Canada border. The Preclearance agreement also provides a framework to expand Preclearance sites, which will further facilitate trade and tourism in one of the most active economic regions in the world.

The Preclearance signing is yet another milestone for the Beyond the Border initiative that was announced by President Obama and Prime Minister Harper in 2011 in an effort to provide a shared approach to perimeter security and economic competitiveness. To learn more about Preclearance benefits and locations, visit U.S. Customs and Border Protection.

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Dow Chemical Invests in Employees and the U.S.

April 15, 2015

This post contains external links. Please review our external linking policy.

This is a guest blog post by Deborah Borg, president of Dow USA.

Deborah Borg (center), president of Dow USA, with Assistant Secretary of Commerce for Industry and Analysis Marcus Jadotte (left) and  Dow's St. Charles Operations site director Johnny Chavez at the Dow Louisiana St. Charles Operation site.

Deborah Borg (center), president of Dow USA, with Assistant Secretary of Commerce for Industry and Analysis Marcus Jadotte (left) and Dow’s St. Charles Operations site director Johnny Chavez at the Dow Louisiana St. Charles Operation site.

In 1897, when The Dow Chemical Company first opened its doors in Michigan, our founder most likely wouldn’t have known that more than a century later, Dow would be one of the world’s largest chemical manufacturers. Today, we employ more than 24,000 employees at 73 sites across the United States. These employees manufacture approximately 14,000 unique products that are exported to more than 120 countries across the globe.

On Thursday, I joined U.S. Assistant Secretary of Commerce for Industry and Analysis Marcus Jadotte at our Dow Louisiana St. Charles Operations site, located on the Mississippi, just up the river from New Orleans. The Assistant Secretary along with Johnny Chavez, the St. Charles Operations site director, and I met with Dow employees to discuss the role trade has played in helping Dow grow, innovate, and support our U.S. workforce. We also talked about global competitiveness and the need for a level playing field around the world—now and in the future.

In my role as president of Dow USA, our growth strategy is my number one priority. When I think about how Dow can continue to build on its previous success, I think about two things: our investments and the need to grow and cultivate our customer base. The United States is home to 56 percent of Dow’s global manufacturing operations. We have a very strong domestic customer base, but much of our future customer base lies outside U.S. borders. In fact, 95 percent of the world’s population and 80 percent of its purchasing power are outside of the United States. Having access to customers in these markets is key for our continued business growth.

When it comes to resources, Dow is aggressively investing right here in the United States. The most recent example is our $6 billion investment in the Gulf Coast, which will yield new production facilities and new jobs in Louisiana and Texas. It also means stronger economies for those states and the United States as a whole.

Although we can control where and how much to invest, Dow has less control over increasing our access to global consumers through new trade agreements. That responsibility falls to Congress and the president. President Obama has been working hard to negotiate new trade agreements with the Asia-Pacific region and Europe that would lower or eliminate barriers to export for Dow products and the products of thousands of other U.S. businesses both large and small.

We’re encouraged by the efforts of the president and the support of the Commerce Department in highlighting the benefits of trade. Global customers are critical to Dow’s continued growth, and new trade agreements hold the promise for Dow to succeed for another century. At Dow, we have been working to generate support in Congress for Trade Promotion Authority (TPA) legislation. With TPA, the United States has a stronger hand at the negotiating table to bring home trade deals that will benefit American companies and workers.

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The United States and Canada Improve Cross-Border Trade and Transportation Through Innovative Partnership

April 14, 2015

Andres Leon is an intern in the International Trade Administration’s Office of North America.

In 2011, President Obama and Canada’s Prime Minster Harper announced the Beyond the Border initiative to enhance security and accelerate the flow of people, goods, and services between the United States and Canadian border. On February 18, 2015, Beyond the Border reached a new milestone: the United States, Canada, and the state of Michigan signed an agreement to finance the proposed New International Trade Crossing (NITC) that will link Detroit and Windsor, Ontario. The Detroit-Windsor corridor is one of the most important crossings for U.S.-Canadian commerce. The new agreement includes funding for a U.S. customs plaza that will be procured as part of the NITC public-private partnership to finance, design, construct, operate, and maintain the project. The costs of the project will be paid from future toll revenues.

The public-private partnership is a true sign of progress for the border initiative and will provide the United States and Michigan with jobs, modern infrastructure, and improved security. The United States and Canada are strong economic partners, with Canada being the largest trading partner for the United States and the state of Michigan. Many jobs in the United States, and particularly in Michigan, depend on U.S.-Canada trade. In fact, last year, annual trade in goods and services between the two countries was roughly $658 billion, a quarter of which was facilitated in the Detroit-Windsor corridor.

The new agreement is a result of several years of discussions and cooperation among the U.S. Department of State, U.S. Customs and Border Protection, the U.S. General Services Administration, the state of Michigan, the Windsor-Detroit Bridge Authority, and Transport Canada. Above all, the agreement reflects the ongoing commitment of U.S. and Canadian officials to promote long-term economic growth in the region.

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President’s Advisory Council on Doing Business in Africa is Writing a New Chapter in U.S.-Africa Relations

April 9, 2015

This post originally appeared on the Department of Commerce blog.

Post by Penny Pritzker

The President's Advisory Council on Doing Business in Africa Cover ImageToday, I led the first meeting of the President’s Advisory Council on Doing Business in Africa. This Council is part of the Administration’s effort to write the next paragraphs in what President Obama called a “new chapter in U.S.-Africa relations.”

Today’s gathering was intended to build on what was started at the historic U.S.-Africa Business Forum last August, when U.S. firms announced more than 14 billion worth of investments in African markets.

We want to see that kind of economic engagement continue, which is why I was honored that the President asked me to establish this Council – to ensure that the private sector’s perspective is factored into our policy making.

The Council’s job is to advise the Department of Commerce and the Obama Administration on how to expand trade and investment opportunities for U.S. firms in Africa and create opportunities for African companies that want to do business in America.

To meet this charge, the Council has focused on three key areas.

First is mobilizing capital, because robust capital markets are essential for any nation to attract long-term investment. The Commerce Department will soon launch an investor road show to provide U.S. financial firms and exporters with the opportunity to hear directly from African governments about their investment climates and specific infrastructure projects and to assess and address real market risks.

Second is improving supply chain efficiency. Ensuring quick and easy movement of imports and exports can help reduce cost, increase efficiency of trade, and boost government revenues.

Third is infrastructure. American companies have experience and expertise in developing infrastructure, but at the Commerce Department, we have heard repeatedly from U.S. companies about the challenge of competing on a level playing field with foreign firms to win major infrastructure projects. The Council has recommended the creation of a U.S.-Africa Infrastructure Center to identify, vet, and prioritize African infrastructure projects – which is a great start and will help change the dynamic.

The Department of Commerce has solutions. We have data. We have market expertise. And we have great people. Our Foreign Commercial Service has a full range of tools and services at your disposal, including staff on the ground to help U.S. companies succeed in Africa. We would like your ideas on how to get the word out.

We had robust discussions about all of these issues during today’s meeting, and I am confident that we can make great progress in the coming months and years. I look forward to continuing to work with the Council to make doing business in Africa easier for U.S. companies – and to keep America and Africa open for business together.

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Profile of U.S. Exporters Highlights Contributions of Small- and Medium-Sized Businesses

April 8, 2015

Lauren Scott is an international economist in the Office of Trade and Economic Analysis at the International Trade Administration.

Infographic thumbnailYesterday the Census Bureau released its annual Profile of U.S. Importing and Exporting Companies, which details the characteristics of U.S. merchandise trading companies in 2013. The report, a joint project between Census and the International Trade Administration (ITA), includes information on company size, industry sector, geographic location, and export markets. More than 304,000 U.S. companies exported goods in 2013, which is a 10 percent increase from 2009, when the National Export Initiative (NEI) was first announced by President Obama.

The Profile especially highlights the role of small businesses in export industries. Small- and medium-sized enterprises, or SMEs, which are firms with fewer than 500 employees, accounted for 98 percent of the number of U.S. exporters in 2013 and $471 billion in known value of goods exports*. The majority of SME exporters ship goods to at least one of our NAFTA partner countries, Canada or Mexico, with the U.K., China, and Germany, also serving as top markets for SME exports. In fact, the known value of SME exports to Mexico increased by nearly 19 percent between 2012 and 2013. Similarly, SME exports, by value, grew by 5 percent to Colombia during its second year as a U.S. free trade agreement partner. Nearly 21,000 SMEs exported goods to South Korea and more than 14,000 exported to Colombia in 2013, both of which became U.S. free trade partners in 2012.

The majority of U.S. exporters are non-manufacturing firms, and SMEs account for the majority of these non-manufacturing companies. Wholesale trade companies and other non-manufacturing firms made up 76 percent of SME exporters. These SMEs contributed 55 percent of the non-manufacturing sector’s $562 billion in exports. Manufacturing firms account for less than a quarter of U.S. exporters; however, this sector accounted for 60 percent of total known export value in 2013, much of which was generated by large firms.

SMEs can also be a critical driver for economic growth through exports at the state level. In fact, SMEs were responsible for more than half of known goods exports in Montana, Rhode Island, Florida, Wyoming, New York, Hawaii, and Maine. Texas added nearly 700 SME exporters in 2013, which represented the largest increase in total exporters by state across the U.S. that year.

Small- and medium-sized firms stand to gain by expanding their reach in the global marketplace. The majority of SMEs (59 percent) exported to a single foreign market in 2013, while the majority of large companies (55 percent) exported to five or more countries. SMEs often face additional trade barriers overseas compared to large companies that use offshore business affiliates to more easily facilitate exports to a target market. Despite these obstacles, almost 93,000 SMEs exported goods to the European Union in 2013, and exports from all companies to the Pacific Rim region increased by $8 billion between 2012 and 2013. Both markets represent opportunities for continued and increasing growth.

Current and future U.S. free trade agreements, including those under negotiation with the EU and through the TPP, will be beneficial for all U.S. companies, especially SMEs, to gain market access to half of the global economy and continue growing America’s export footprint overseas.

For more information, read the full Census report or review ITA’s summary of the report highlights. Also, be sure to check out our infographic .

* “Known value” refers to export transactions that can be linked to a specific company, so in many cases these figures may be underestimated.

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Why U.S. Companies Should ‘Think Global’ from Day One

April 7, 2015

Ashley Zuelke is the Senior Advisor for Export Policy, Promotion and Strategy at the International Trade Administration.

Julia McNerney is the Special Assistant to the Under Secretary at the International Trade Administration.

Last week, the International Trade Administration (ITA) held the first event in the Startup Global Pilot program at 1776, a local business incubator in Washington, D.C. Startup Global, which Secretary of Commerce Penny Pritzker launched in February, was designed to help more startup firms think global from the earliest stages of a company’s growth. One of four in a series of pilot program educational events, the  1776 event welcomed 25 startups and experienced startup exporters. The participants all agreed that the theme of Thursday’s event is clear: start planning for international success on day one. The theme is important because:

  • The world wants U.S. goods and services.
  • Advances in technology and communications, as well as new assurances of e-commerce platforms that build trust between buyer and seller, mean that it is easier than ever for the 95 percent of consumers outside the United States to purchase from U.S. companies.
  • Many technology-enabled businesses are in a reactive position when international sales opportunities or challenges arise, and don’t know where to start or who to go to for help.

At the cutting edge of commercial innovation, startups are the next generation of U.S. exporters. As a result, ITA is piloting Startup Global, an outreach and partnership development program launched under NEI/NEXT, the successor to the President’s National Export Initiative (NEI). The NEI/NEXT strategy coordinates federal programs and policies to help more U.S. companies begin exporting and expand to new markets by making it easier to get involved.

Startup Global is designed to provide focused assistance and information to early-stage companies by building partnerships with the United States’ unparalleled incubators and accelerators, which are key centers of gravity and trusted advisers in the startup ecosystem. Startup Global will produce half day educational seminars in partnership with local incubators and accelerators to cover the most-pressing issues startups face in the global business environment. At last week’s event at 1776, those topics included the path to going global, the availability of key federal and local government resources, and best practices in intellectual property protection and licensing.

Another theme realized at Thursday’s Startup Global pilot:  assistance is available. Participants were enthusiastic to learn about federal government resources in their own backyard. They include:

In addition, courtesy of the Global Innovation Forum at the National Foreign Trade Council, participants heard about other available resources from leading private sector experts about doing business internationally.

In the upcoming months, the Department of Commerce will host pilot seminars in Arlington, Texas; Cincinnati, Ohio; and Nashville, Tennessee. These events will not only provide direct assistance and access to expertise, but also measure demand to inform the creation of a national initiative.

The pilot event at 1776 set a high bar and registered tremendous demand. ITA looks forward to additional insightful feedback from future seminars, and to supporting the next generation of globally fluent U.S. businesses.

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