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Commerce Department Helps Connect Illinois Businesses to Africa

March 19, 2015

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

Guest blog post by David P. Storch is the Chairman & CEO of AAR Corp. He is also a member of the President’s Advisory Council on Doing Business in Africa.  

During the next decade, Africa’s GDP is projected to rise six percent each year. The Continent is being called the world’s next major economic success story, and this growing and untapped potential includes the aviation market where AAR is a U.S.-based global player.

On Tuesday, I joined U.S. Assistant Secretary of Commerce for Industry and Analysis Marcus Jadotte  to host a Doing Business in Africa (DBIA) roundtable in Chicago. This high-level gathering, with a select group of business leaders, was held to generate and share ideas on how the International Trade Administration (ITA) can help U.S. companies, primarily small- and medium-sized businesses, to better connect to, invest in, and export to Africa.

The roundtable brought together more than 30 leaders—from companies that focus on everything from investment capital to technology, and businesses ranging in size from start-ups to multimillion-dollar firms—to discuss the hurdles of conducting business in Africa and to learn how the U.S. government can help reduce those barriers.

According to my fellow business leaders who attended, particularly those from smaller companies, access to financing is a big obstacle to doing business in Africa. In fact, many say the only financing they can get is through the Export-Import Bank of the United States. Getting products across African borders is another challenge to selling products on the Continent. During his remarks, Assistant Secretary Jadotte advised companies interested in learning more about exporting to contact their local U.S. Export Assistance Centers, located in cities across the country.

For the last 30 years, AAR has traded aviation parts with customers in Africa. Recently, we started to focus on longer-term aviation service programs and relationships with businesses on the Continent. Our shift in focus is thanks to the increasing strength of African airlines and the help we received from the Doing Business in Africa (DBIA) campaign, led by the U.S. Department of Commerce.

During the roundtable, we also discussed another challenge to doing business in Africa: the lack of infrastructure. Using the aviation industry as an example, AAR can help African companies and workers gain aircraft maintenance knowledge and skills, but the countries also still need to build the related infrastructure needed for a more robust aviation industry, including runways, terminals, and hangars. Leaders at the roundtable suggested that the need for large capital investment in transportation, utilities, and communication is probably best served by African governments engaging in public-private partnerships.

We also talked about the desire of firms like AAR to partner with local African companies since they know the market better than we ever will. I think U.S. companies’ willingness to invest in Africa and its people also differentiates the United States. As U.S. Commerce Secretary Penny Pritzker said, “when U.S. companies succeed, the benefits are mutually shared in the form of new economic opportunity at home and abroad.”

The key takeaway from Tuesday’s roundtable is that small and mid-sized companies need a better understanding of the resources the U.S. government can provide to help them break into the African market, and how and where to access those resources and tools.

The Obama administration’s support and “tools” were key to enabling AAR to navigate the business landscape and land a five-year, multimillion-dollar contract in 2014 to support Kenya Airways fleet of 737NG aircraft. The advocacy and access AAR gained through the Commerce Department gave us an advantage in the face of stiff competition from European companies, who are typically well supported by their governments.

To continue the conversation, many of the ideas generated at this week’s Chicago roundtable will be included in the recommendations that the President’s Advisory Council on Doing Business in Africa will present to President Obama in a public forum on April 8 in Washington, D.C.

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SelectUSA Works for Puerto Rico

March 19, 2015

This post originally appeared on the Department of Commerce blog.

Guest blog post by Alejandro J. García-Padilla, Governor of the Commonwealth of Puerto Rico

Almost a year after we announced that Lufthansa Technik would establish an aircraft maintenance, repair and overhaul (MRO) facility in Puerto Rico, we are getting ready to celebrate the 2015 SelectUSA Investment Summit.

With an estimated economic impact of $2.2 billion over a 30-year period, Lufthansa Technik’s decision to establish an MRO site in Puerto Rico is a major strategic advancement for the Commonwealth’s economic development plan. The facility is well under construction and has secured JetBlue and Spirit Airlines as customers. The MRO is expected to begin servicing customers later this year.

Since I took office in January 2013, I have sought to diversify Puerto Rico’s economy by attracting foreign direct investment like Lufthansa Technik, a leading manufacturer and independent provider of technical services for the aviation industry.

And make no mistake, investing in Puerto Rico is investing in the United States. That is why, with the help of the Commerce Department’s Select USA program, we sought out Lufthansa Technik to create jobs that capitalize on the highly skilled workforce that our Island’s university system trains.

The MRO facility is helping to grow Puerto Rico’s aerospace and aviation industry, create high-skilled jobs, and stimulate science, technology, engineering and math (STEM) education. By 2016, up to 400 highly skilled workers will be employed there. Puerto Rico now has the infrastructure to train new aircraft mechanics, with the brand new Aerospace and Aviation Institute of Puerto Rico under development.

This deal was just the beginning of an exciting partnership between Puerto Rico and SelectUSA.  The Lufthansa Technik site is causing a positive ripple effect in the economy, spurring the growth of MRO suppliers.

I also recently announced that business technology consulting firm Infosys BPO will open a new center in Puerto Rico to serve the Island’s growing aviation sector. This investment is another example of foreign direct investment brought on by the ripple effects of the Lufthansa MRO. Infosys will utilize this new center to deliver complex order-to-cash business processes for clients in the aviation industry and create over 200 jobs. The company is looking to further expand its footprint in the region to service clients in the federal government sector and the healthcare industry.

I commend the work of President Obama’s Administration, which was instrumental in bringing Lufthansa Technik to the United States and creating hundreds of well paid jobs in Puerto Rico. I also express my deep gratitude to Vice President Biden, Secretary Pritzker and the SelectUSA Program for making these investments a reality.

The investment from Lufthansa Technik and its impact in the economy are proof that SelectUSA works. We look forward to a long partnership with SelectUSA.

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Making U.S. Manufacturing Stronger

March 18, 2015

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

This post originally appeared on the Department of Commerce blog.

Guest blog post by Phillip Singerman, Associate Director for Innovation and Industry Services at the National Institute of Standards and Technology (NIST).

During his visit to Cleveland, Ohio, today, President Obama highlighted increased investment in a unique program that makes sure small and medium-size U.S. manufactures have the support they need to innovate, grow and succeed.

The president visited the Manufacturing Advocacy and Growth Network (MAGNET), one of 60 centers across the country in the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP).  MAGNET is one of the Ohio MEP affiliates located at Cleveland State University. These centers have helped manufacturers such as Ohio-based Wright Materials Research and Heather Moore Jewelry make improvements that led to the hiring of new staff, sped delivery of their products and generated new sales.

As a new report released by the White House (which was supported by our colleagues at the Economics and Statistics Administration) finds that small and medium-size companies like these form the backbone of America’s manufacturing supply chains and employ nearly half of all U.S. manufacturing workers.

There are many success stories in MEP’s 26-year history that demonstrate the benefits of investing in these manufacturers. And we plan to support many more. MEP has issued a Federal Funding Opportunity for non-profit organizations to operate centers in Alaska, Idaho, Illinois, Minnesota, New Jersey, New York, Ohio, Oklahoma, Utah, Washington, West Virginia and Wisconsin. This is the second round of competitions in a multiyear effort to update MEP’s funding structure and will strengthen the network. We announced the first competition awardees in February 2015.

The awardees in this new competition will receive a total of nearly $32 million annually for five years from MEP, and all of that funding will be matched at a minimum dollar-for-dollar by non-federal sources. Over the course of the five-year awards, more than $320 million total federal and non-federal investment will be provided to support the small and medium-size manufactures in these states.

That investment will go a long way. For every dollar of federal funding, MEP clients generate nearly $19 in new sales, which translates into $2.5 billion annually. And for every $2,001 of federal investment, MEP creates or retains one U.S. manufacturing job. Since 1988, MEP has worked with nearly 80,000 manufacturers, leading to $88 billion in sales and $14 billion in cost savings, and it has helped create more than 729,000 jobs.

Revitalized centers will benefit each of these states, but I’m especially glad to see that Alaska is included in this competition because it is the only state that does not currently have an MEP center. However, based on a recent study funded by MEP, the state does have a small and vibrant manufacturing community that could truly benefit from the collaborative, public-private nature of an MEP center.

Running an MEP center is not an easy task, but the benefits to the country and local communities is tremendous. We’ll be hosting an informational webinar regarding the latest MEP competition on March 30, 2015 at 2:00 p.m. Eastern time (register by sending an email to mepffo@nist.gov), and applications are due June 1, 2015. I encourage all eligible non-profits to consider applying for this opportunity to help ensure a strong future for U.S. manufacturing.

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North Carolina Attracts FDI in Manufacturing and Textiles

March 13, 2015

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

Stefan M. Selig is the Under Secretary of Commerce for International Trade

Under Secretary Stefan Selig (seond from left) participates in a ribbon cutting ceremony with North Carolina Governor Pat McCrory (left) PEDS Legwear President and CEO Michael Penner and Walmart Vice President of U.S. Manufacturing Cindi Marsiglio.

Under Secretary Stefan Selig (seond from left) participates in a ribbon cutting ceremony with North Carolina Governor Pat McCrory (left) PEDS Legwear President and CEO Michael Penner and Walmart Vice President of U.S. Manufacturing Cindi Marsiglio.

On Wednesday afternoon, I delivered remarks in Hilderbran, North Carolina at a ribbon-cutting ceremony where we officially opened the new Canadian-based Peds® Legwear (PEDS) production facility. PEDS’ recent $16 million investment in the plant and new machinery has allowed the company to hire North Carolina factory workers who were previously laid off. By 2018, this new facility will bring more than 200 jobs to Hildebran, providing a lift to the local economy.

SelectUSA, our program to attract foreign direct investment (FDI), along with our Commercial Service Canada team, helped facilitate this deal. SelectUSA provided counseling to PEDS on how to navigate the federal regulatory process and also helped identify sources of federal funding. In addition to PEDS’ investment in the Hildebran facility, the company plans an additional $8 million venture, bringing their total investment in the United States to $24 million. In less than two weeks, similar FDI deals will be highlighted at this year’s SelectUSA Investment Summit, which will take place March 23-24.

In addition to ITA’s support, PEDS’ new investment is made possible because of a multi-year purchase order contract from Wal-Mart as part of the retailer’s commitment to buy domestically produced goods.

As I noted in my remarks—before an audience that included Michael Penner, president and CEO of Peds® Legwear; Cindi Marsiglio, Wal-Mart’s vice president of U.S. manufacturing; and North Carolina Governor Pat McCrory—PEDS’ investment in the facility shows our nation’s prowess to attract FDI.

Because the United States offers a transparent, fair, and stable business climate, as well as our second-to-none workforce, many global companies like PEDS are beginning to establish or expand operations here. In fact, in 2013, U.S. FDI inflows totaled $231 billion, of which $51 million was invested in U.S. textile and apparel manufacturing. In 2012, majority-owned U.S. affiliates of foreign firms accounted for $48 billion in R&D expenditures, exported $334 billion worth of U.S. goods exports, and employed nearly 6 million workers.

To keep the momentum, ITA will continue to develop opportunities for U.S. workers and businesses by promoting international trade, encouraging FDI, and working to foster a level playing field for American products and services.

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Increased Exports and the Jobs Supported by Exports Are Keys to Heightened Economic Confidence

March 12, 2015

This post originally appeared on the Department of Commerce blog.

Guest blog post by Stefan M. Selig, Under Secretary of Commerce for International Trade

Under Secretary of Commerce for International Trade Stefan M. Selig

Under Secretary of Commerce for International Trade Stefan M. Selig

When we look back at 2014, it will be seen as the year our country regained its economic confidence, symbolized by the nearly 3 million jobs our economy created in 2014.

While this feat extended the longest streak of job growth in American history, we should not overlook the role our exports and our exporters played in regaining that economic confidence.

U.S. exports of goods and services tallied a record $2.35 trillion in 2014. That was the fifth consecutive year we achieved record exports. This is a clear validation of the Administration’s commitment to a robust trade and investment agenda.

In fact, there are three ways that our exports played an important role in the breakthrough year our economy produced.

First, at the same time that we were experiencing the longest streak of job growth, we also experienced a record year when it came to export-supported jobs: more than 11.7 million. This number includes the 2.8 million jobs supported by the exports to our North American Free Trade Agreement partners Canada and Mexico. And we know those export supported jobs pay 13 to 18% higher wages than non-export supported jobs.

Second, U.S. exporters reaped the benefits of a record year of exports with our 20 free trade partners – with a total of $765 billion in goods sent to these markets. That record included increases in exports to Colombia (up 10.5%), South Korea (up 6.8%) and the Central America Free Trade Agreement-Dominican Republic partners (up 5.7%). Overall, these 20 countries purchase nearly half of all U.S. exports today – 47% to be exact.

Third, a major driver of our export growth came from our Latin American free trade partners, such as Chile, Colombia, Mexico, Panama, and Peru. Exports to these 11 countries alone represented more than a third of our entire year-over-year increase in exports. The region is a major destination for U.S. petroleum and coal, computers and electronics, chemicals, and transportation equipment.

So 2014 was clearly a breakthrough year for our exports and for our economy in general. Now, we need the tools that will allow us to carry that momentum into 2015 and beyond.

That is why passing trade promotion legislation is even more crucial, particularly as we work to finalize the historic Trans-Pacific Partnership agreement (TPP).

TPP will give U.S. exporters better access to the Asia-Pacific, which will carry the majority of global middle class by 2030. TPP means taking the very success we have seen in Latin America – U.S. goods exports to Look South markets increased 5.4 percent in 2014 from the previous year, more than double the increase of goods exports to the rest of the world — and replicating it in the Asia-Pacific.

To help our negotiators reach the best deal possible, the President needs Congress to pass trade promotion legislation. This would signal to our negotiating partners that a successfully negotiated TPP will not be held up by amendments when it goes to Congress for a final vote. This would give those trading partners the confidence to put their final offers on the table.

And because trade promotion legislation empowers Congress to determine the priorities and objectives our negotiators must pursue, it will ensure TPP embodies the values of 21st century global commerce: environmental protection, workplace regulations, and fair wages.

If we want a future that will include connecting U.S. exporters to 60% of global GDP, accessing the majority of global middle class consumers, supporting more American jobs through expanded exports, and locking 21st century values into the global trading system, then trade promotion legislation will be an essential element.

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Exporting: Mission Possible – Two Companies’ Stories

March 3, 2015

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

Laura Ebert is a Trade Specialist at the International Trade Administration.

First Choice Marine Supply CEO Craig Ruda and interpreter Gabriela Schulten meet with potential distributor Maress Supply in Santiago, Chile

First Choice Marine Supply CEO Craig Ruda and interpreter Gabriela Schulten meet with potential distributor Maress Supply in Santiago, Chile

At the end of last year, 14 companies from the Tampa Bay area in Florida traveled to Santiago, Chile on a trade mission. Led by the Tampa Hillsborough Economic Development Corporation, the companies came armed with market assessments and meeting agendas prepared by the U.S. Commercial Service in Chile. Their mission: to find new export opportunities in Chile.

Joining a trade mission is a great way to learn firsthand about new export markets and meet face-to-face with potential partners and clients. Increasingly, city, state, and regional organizations are teaming up with the U.S. Commercial Service to offer tailored missions for local companies. What is it like to participate in a trade mission? To find out, we recently spoke with two companies that participated in the mission to Chile.

Hydro-Dyne Engineering is a manufacturer of screening and grit removal equipment for water and waste water treatment plants. The company began exporting to help diversify its sales base. Initially, joining the mission was a hard sell to President Jay Conroy. “I was afraid that going down with a government contingency could slow us down and thought we could do it on our own,” said Conroy. “The biggest surprise was how well the mission was organized. Even putting a lot of resources behind it, we wouldn’t have done as good a job on our own.”

Conroy joined the mission with the goal of interviewing and selecting a representative in Chile. For Hydro-Dyne, this kind of long-term commitment is necessary to market its products, provide design and installation support, and build momentum in a market. Conroy was impressed with the quality of the meetings that were scheduled for him. “We went on the mission to find a representative and I am confident we will have one now because of the trip,” Conroy stated. “The icing on the cake was getting to meet with customers who have already asked for proposals on equipment for specific projects.”

His biggest surprise about Chile? How modern it is. “Most water services are privately operated and run like a business looking for a return,” Conroy added.

First Choice Marine Supply designs, manufactures, and distributes solar lighting for the commercial and industrial marine industry, among others. CEO Craig Ruda came across the mission while doing research on expanding to Brazil. He decided to turn his attention to Chile when he learned of the relative ease of doing business there—especially with the Free Trade Agreement (FTA) between the United States and Chile in place. “Given the FTA, Chile’s growing economy, and their interest in new, energy efficient technologies, it just made sense,” said Ruda.

Ruda went to Chile looking to gather market intelligence and to meet a diverse client base. For him, nothing beats face-to-face interactions for getting an assessment of the true capabilities of a potential agent and for establishing trust with clients. He was impressed by how comfortable Chilean companies were with importing and surprised by the strength of the infrastructure there. Does he consider the mission a success? “Yes, we met all our objectives,” Ruda said enthusiastically.

After all the time and effort put into exploring markets halfway around the world, has exporting been good for business? “Absolutely. Exporting has increased our sales and allowed us to hire,” says Conroy. Hydro-Dyne has doubled its staff over the last two years as exporting has become a larger part of the company’s sales. Exports have driven growth at First Choice Marine as well. “About 50 percent of our market is served through exports. Every one of our people has relationships in other countries on a daily basis,” Ruda added.

If you would like to explore export opportunities for your company and learn more about upcoming trade missions led by the International Trade Administration (ITA), visit our trade mission page. For trade missions to Latin American FTA markets led by ITA and state and local partners, visit our Look South events page.

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President Obama Renews Charge to Help Rural Companies and Communities Compete Globally

February 27, 2015

This post originally appeared on the Department of Commerce blog.

Spiral candles proudly made in North Dakota.Yesterday, President Obama announced new commitments in the “Made in Rural America” export and investment initiative, which is charged with bringing together federal trade-related resources for rural communities and businesses. This announcement reflects the Administration’s strategy for ensuring workers and businesses of all sizes, from communities large and small, benefit from the nation’s economic resurgence.

The Department of Commerce also released data yesterday that show 26 states set new export records in 2014, and many of those states are in the nation’s heartland.

The Administration’s next steps in the “Made in Rural America” initiative build on input received from rural businesses and communities throughout the past year.  Following the President’s announcement of the initiative in February 2014, agencies led several regional forums across the country, a Rural Opportunity Investment conference last summer, and new partnerships to help more rural businesses – making everything from amphibious vehicles to aquaculture products – plug in to export assistance.

Last year, we confirmed that rural businesses have the products and services in demand worldwide, and the drive to export – just like urban businesses. The challenge is improving their access to information and export services, including financing and logistics. U.S. Commercial Service – North Dakota Director Heather Ranck and rural companies spoke about that in this “Export Experts” video released last October.

Highlights from yesterday’s announcement include the following:

  • The International Trade Administration has established a new National Rural Export Innovation Team to help more rural businesses access export-related assistance, information and events. The team already has 74 members nationwide.
  • Through the support of the Appalachian Regional Commission, Delta Regional Authority and others, we will double the number of rural businesses served by these partners that international trade shows and missions.
  • The Economic Development Administration (EDA) will launch a new i6 Rural Challenge, based on the previously successful i6 challenges, which will focus on providing funding to rural communities to build capacity for commercializing technology.
  • EDA will establish a mentor-protégé program for rural communities that will help all communities involved learn how to leverage their own assets, build their resources, and foster a culture that drives innovation and entrepreneurial thinking.
  • Agencies will work with state and local partners to raise awareness of federal resources with rural businesses and community lending institutions.  This includes commitments from the Ex-Im Bank, SBA and the Delta Regional authority as well as the U.S. Postal Service’s commitment to host internationally-focused “Grow Your Business” day-long events across the country.
  • The Department of Agriculture and its partners will lead reverse trade missions and ITA will conduct outreach events for rural businesses to meet foreign buyers and commercial experts.

Many at the county, state, and national level responded to the President’s “Made in Rural America” charge, as we saw first-hand in Canonsburg, PA; Memphis, TN; Cortland, NY; Tuscaloosa, AL; Cedar Rapids; Gila County, AZ and Clackamas County, OR. In addition, the Administration has made efforts like Made in Rural America a key priority in our national export strategy, NEI/NEXT.

For more information, visit businessusa.gov/rural-exporting.

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