Tradeology, the ITA Blog

This post originally appeared on the Department of Commerce blog.

Adam Schlosser, Senior Director and Policy Counsel, Center for Global Regulatory Cooperation, U.S. Chamber of Commerce

Guest blog post by Adam Schlosser, Senior Director and Policy Counsel, Center for Global Regulatory Cooperation, U.S. Chamber of Commerce

With the increasing interconnected nature of the global economy, never before has it been so easy, or routine, for a U.S. company to become a “multinational company.”  All it takes to reach the 95% of consumers living outside our borders is a great product and an Internet connection. In fact, digital trade generates over $8 trillion a year to the global economy and the ability to transfer data is directly responsible for $2.8 trillion.

And these benefits flow to companies of every size and sector. Three quarters of the value created by digital trade accrues to firms not usually viewed as “Internet companies,” such as manufacturers, retailers and banks. Today, every successful business operates digitally in some capacity, from managing customer relationships to operating a global supply chain.

Despite the important benefits of digital trade, U.S. companies are increasingly encountering barriers abroad, including misguided attempts to build domestic industry through localization requirements. Unfortunately, these efforts merely raise costs and cut off consumers from using the best available technology.

However, the U.S. government has consistently been a great partner in the fight to remove barriers and preserve the ability of companies to seamlessly operate globally. We’ve had great success teaming up to push back against localization and other potentially problematic rules many places around the world. If anything, the main question is how can we ensure that success stories become even more routine.

Therefore, the creation of a digital trade officer program is a welcome and important initiative. We are excited about the potential to capitalize on smart, hardworking foreign officers dedicated to digital issues at key posts. Providing continued on-the-ground expertise will proactively prevent detrimental policies from developing and ensure that the immense benefits of digital trade continue to grow. These new “digital attaches” will be working to support literally millions of jobs in both the U.S and in markets where they are posted.

The digital trade officer program brings cutting-edge commercial diplomacy tactics to the cutting-edge segment of the global economy. The Chamber, and the entire U.S. business community, looks forward to supporting these efforts towards continued and sustained success in the future.

The U.S. Chamber of Commerce is the world’s largest business organization representing the interests of over 3 million businesses of all sizes, sectors, and regions.  For over 100 years, we have been the voice for the U.S. private sector in Washington, DC and capitals around the world.  

NOTE: Application deadlines fast-approaching for MDCP grants and International Buyer Program. 

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Marcus D. Jadotte is ITA’s Assistant Secretary of Commerce for Industry and Analysis.

Earlier this month, I had the pleasure of personally congratulating the Recreation Vehicle Industry Association (RVIA) on its new Market Development Cooperator Program (MDCP) award at the 2015 National RV Trade Show. MDCP Export Awards provide financial and Commerce Department staff resources to trade associations and other nonprofits for projects that will generate exports. RVIA’s award will help the RV industry produce an estimated $336 million in U.S. exports to China, Japan and South Korea over the next three years. RVIA will match the MDCP award with a $1.3 million investment. During the award period, International Trade Administration (ITA) industry experts and Commercial Service staff will provide RVIA with dedicated trade professionals to help achieve the project’s objectives.

A/S Marcus Jadotte, Frank Hugelmeyer, President of RVIA, and Director, the Office of Consumer Goods Jim Rice touring a Thor Motor Coach, made in Elkhart, Indiana. Photo credit: Jillian Doody

During the Recreation Vehicle Industry Association’s first three-year MDCP award period, which ended earlier this year, RV exports to China, Japan and Korea exceeded $143 million. In addition to being a previous MDCP award recipient, RVIA provides trade policy advice to the government through participation on the Consumer Goods Industry Trade Advisory Committee, and is also an ITA strategic partner.

The National RV Trade Show was itself a platform for promoting U.S. exports as an International Buyer Program (IBP) Select event bringing international buyers from Korea, China, France, Peru, and New Zealand for business-to-business matchmaking. Buyer delegations also came from Japan and the Netherlands. One of the biggest successes from the show was an agreement by one Asia-ready U.S. travel trailer producer to partner with a Korean company to assemble and distribute trailers in Korea from kits manufactured in Indiana. Korea has a dynamic, outdoors-oriented culture where activities like camping and hiking are very popular.

Industry exhibitors indicated that the IBP program helped to strengthen commercial relationships and led to a significant number of product sales. “You know, I thought there was a lot of energy and a lot of positive vibe going on – more so than I’ve seen at some previous shows,” said Airxcel President Jeff Rutherford, who greeted a number of potential international customers. “We had a good show,” reported Kip Ellis, vice president of aftermarket sales and marketing for Dometic Americas. “And there continues to be an influx of foreign—Asian in particular—interest in our market. So we see that traffic increasing as well.”

This year’s annual show had nearly 7,500 attendees, including RV dealers, manufacturers and suppliers. Accompanied by Frank Hugelmeyer, RVIA president, and Craig Kirby, vice president of International Business and General Counsel at RVIA, I toured many exhibits, including Jayco, KZ, and Airstream.

U.S. companies are the largest manufacturers of RVs globally, producing more than twice as many RVs each year compared to the rest of the world combined. In fact, the RV industry, a significant sector within the recreational transportation industry, was profiled in ITA’s 2015 Top Markets report.

The application periods for 2017 IBP trade events and MDCP funding and are open now! The IBP is a joint government-industry effort that brings thousands of international buyers to the United States for business-to-business matchmaking with U.S. firms exhibiting at major industry trade shows. Every year, the IBP results in millions of dollars in new business for U.S. companies, and increased international attendance for participating U.S. trade show organizers. The IBP trade event application deadline is January 8, 2016.

MDCP offers awards of up to $300,000 for industry groups to pursue foreign market development projects. Applications are due in late February 2016.

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

Having traveled to Mexico twice in the last two months and four times in the past year, one overarching theme has become clear: the U.S. and Mexico are firmly on a path to becoming a model of a modern commercial partnership. My recent trip to Mexico served to reinforce this message in three important ways

First, during a roundtable with the Council of the Americas, we discussed the upcoming annual meeting taking place within the framework of the U.S.-Mexico High Level Economic Dialogue (HLED). Since its launch in 2013, the HLED has been the central bilateral forum for the U.S. and Mexico to advance our commercial partnership, our strategic interests, and our leadership on the regional and global stage. During the roundtable, I presented several examples of HLED successes. We have completed or nearly completed several border infrastructure projects that will enhance both our flows of commerce and our collective security interests. We have engaged in education cooperation and workforce development through our Bilateral Forum for Higher Education, Innovation, and Research. Through this forum, we secured 23 bilateral agreements that will facilitate information sharing and foster understanding through student exchanges between U.S. and Mexican education institutions. In 2014 alone, 27,000 Mexican students and teachers participated in exchanges under the program. Finally, in the area of energy, we are working with our Mexican counterparts to advance the country’s historic opening of its oil and gas sector to private investment. Part of this effort includes the creation of a U.S.-Mexico Energy Business Council, which will be a platform for business leaders to provide perspective and insight to government officials.

Second, during this year’s U.S.-Mexico CEO Dialogue, I participated on a panel on cross-border digital integration. Today, our two countries are deepening, enhancing, and maximizing our shared resources through technologies like the Internet of Things and Smart Cities capabilities. The impact of these gains extends far beyond the digital space and includes enhancing two-way trade, environmental sustainability, and cross-border security. At the same time, we are seeing U.S. and Mexican cities, as well as cross-border innovation clusters, emerge as hubs of innovation that will produce wide-ranging impacts at the national and international levels.

Finally, as with every trip, I am reminded of how the U.S.-Mexico commercial relationship will be significantly advanced once the Trans-Pacific Partnership (TPP) is ratified. In particular, TPP will have an enormous multiplier effect on existing efforts to integrate our two markets. On the front-end, because of the increased goods, services, investment, and data flows that will result from TPP, stakeholders in both countries will be incentivized to engage in greater and deeper collaboration on manufacturing, innovation, human capital development, border infrastructure and beyond. On the backend, TPP will create an unprecedented platform where we will maximize the gains of that deeper integration through increased access to 40% of global GDP, to 300 million new consumers, and to the fastest growing region in the world in the Asia-Pacific.

Enhancing and advancing the U.S. – Mexico relationship, as well as other global partnerships, is the critical role of the International Trade Administration. ITA is central to our commercial diplomacy efforts and in supporting U.S. businesses through international trade promotion, attracting foreign direct investment, and helping to ensure a level playing field for American businesses and workers through the work of our trade specialists in Washington, DC, our export assistance centers in 100 U.S cities., and our Foreign Commercial Service in more than 75 global markets.

This post originally appeared on the Department of Commerce blog. Post by Vinai Thummalapally 

There are few things more exciting than the moment when a multi-year project truly becomes a reality.  I had the honor of witnessing that this weekend, when I joined Puerto Rico Governor Alejandro García Padilla; Dr. Johannes Bussmann, Chairman of the Executive Board of Lufthansa Technik; Simone Menne, member of the Executive Board of Deutsche Lufthansa AG; German Ambassador Dr. Peter Wittig; and hundreds of new Lufthansa employees to celebrate the completion of the Lufthansa Technik Puerto Rico (LTPR) maintenance, repair and overhaul (MRO) facility.

Dignitaries celebrate the completion of the Lufthansa Technik Puerto Rico (LTPR) maintenance, repair and overhaul (MRO) facility.

Congratulations and thank you to the teams from Puerto Rico and Lufthansa Technik.  Back in April 2014, I also had the pleasure of joining them when the deal was first announced.

The work undertaken by these teams, which began well before 2014, is impressive:  Puerto Rico competed effectively to win the deal and bring these jobs to the United States.  Lufthansa Technik has invested significantly in this project, which it completed on time.  Local contractors have been building the facility itself.  Companies like Spirit and JetBlue made commitments to use the facility for heavy maintenance support.  And of course, newly minted LTPR employees have been working hard and preparing to grow the business – and their careers – here.  Many even spent six months training in different Lufthansa Technik locations in Europe.

The results:  A gleaming new 215,000 square foot hangar that is serving short and medium haul aircraft, with more than 200 people employed on site.  Lufthansa has also built the foundation for a long-term workforce development partnership with the University of Puerto Rico and the Commonwealth’s Department of Education. Lufthansa anticipates offering high-skilled jobs for 400 local employees by early 2017, with an estimated economic impact of $2.2 billion during the next 30 years. This investment is creating new jobs with valuable training and opportunities for growth, and that means a lot to the families here.

That’s why SelectUSA was created.  Our job is to help U.S. locations compete for investment globally, and to serve as a single point of contact for investors, like Lufthansa, at the federal level.  We help investors find the information they need to make decisions; connect to the right people at the local level; navigate the federal regulatory system; and find solutions to issues related to the federal government.  We aim to make it easier for companies to set up operations in the United States and create high-quality jobs.

To facilitate this investment, SelectUSA coordinated an effort across the federal government, including Vice President Joe Biden, Secretary of Commerce Penny Pritzker, the President’s Taskforce on Puerto Rico, and many others, to present Lufthansa with the case for locating their investment in the United States.

We have continued to work with Lufthansa and Puerto Rico.  During the past two years, we have sincerely appreciated their spirit of cooperation and their willingness to share their experience and best practices with other investors and U.S. economic developers.

This spirit was evidenced throughout this weekend’s event, including one particularly unique element.  The company brought the Lufthansa Orchestra, composed entirely of Lufthansa employees, to provide music for the event.  This underscores the investment they are making in their people, and that now includes the people of Puerto Rico.

Julius Svoboda is in the Office of Energy and Environmental Industries at the International Trade Administration

After a four hour bus ride through China’s Chongqing countryside, I came to China’s first and only commercially producing shale gas well at Fuling–not something a lot of foreigners get to see. The hillside roads were tight and windy. Our medium-sized tour bus had to stop a number of times and back up to let other cars or trucks squeeze by. When we reached the shale site, it was not only a marvel of technological development (China’s shale sits about three miles down while shale in the United States is a mile or less), but it was also a feat of logistics. How in the world the frack trucks, millions of gallons of water, hundreds of tons of sand were able to traverse the steep terrain, narrow roads, and hairpin turns in such a remote part of the country is a mystery! It’s certainly not the flat, straight, and vast countryside most Americans think of around Texas’ Eagleford or North Dakota’s Bakken shale formations.China holds the most shale gas of any country in the world, and the Chinese government wants to “usher in a golden age of shale gas.” After the bus ride, I was left wondering: how they were going to get it from such a remote part of China and delivered to market?

The site visit was part of the U.S.-China Oil and Gas Industry Forum (OGIF)  — the most prominent and long-standing forum for the United States and China to talk about oil and gas regulatory and environmental issues. It’s a chance to talk with the Chinese government about what’s going well in their oil and gas sector and what might go better. Discussions focused on innovation, sustainability, and efficiency for shale development, but that’s only part of the story. The presentations also demonstrated some very cool technology coming out of the United States and how it can reduce costs and improve the economics of shale gas, even in challenging topographic and geologic areas like we saw around Fuling.

In addition to regulatory and environmental issues, OGIF is also a chance for the U.S. government to hear from U.S. companies working in China’s oil and gas sector. We heard that things, while improving in some ways, are still quite challenging. Companies have started to step away from developing shale in China because the regulations on foreign investment and operatorship are overly restrictive. Geological data below 1000 feet is a state secret. Companies are only able to buy spare capacity in natural gas transmission pipelines and foreign intellectual property is too often “localized” for the benefit of Chinese companies. From my standpoint working for the International Trade Administration, I thought it was ironic that the Chinese government is placing a priority on greater foreign investment in its shale sector while maintaining such heavy restrictions on foreign companies.
As the shale gas revolution on the other side of the Pacific begins to take off, and I’m certain it will, the speed to which it will be developed is uncertain. In the United States, we went from almost no shale gas production in 2007 to 50 percent of U.S. natural gas production coming from shale today. By contrast, China’s shale gas exploration started in 2010, and five years later, production levels are only equivalent to what the United States was producing in the late 1990s–which is to say, not much.

For China to succeed in “ushering in the golden age of shale”, the Chinese government will need to rethink its foreign investment policies. Because as it stands now, U.S. companies will be more inclined to keep their distance, and all that really cool technology that we saw at OGIF may be nothing more than presentation slides.

Antwaun Griffin is the International Trade Administration’s Deputy Assistant Secretary for U.S. Operations.

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Deputy Assistant Secretary for U.S. Operations delivers keynote at MMBA Power Luncheon.

Last week, I, Mississippi Governor Phil Bryant and my esteemed colleague Joann J. Hill, Chief, Office of Business Development for the Department of Commerce’s Minority Business Development Agency, participated in the Mississippi Minority Business Alliance Power Luncheon in Jackson, Mississippi. I was honored to deliver keynote remarks at the luncheon hosted by the Mississippi Minority Business Alliance, Inc. (MMBA) to promote international trade and economic development in Mississippi by providing information on business opportunities for individuals and businesses, including minority and women-owned companies, major corporations and institutions.

In Washington, DC, relatively far from Jackson, I lead the International Trade Administration’s (ITA) U.S. Commercial Service domestic network of more than 100 U.S. Export Assistance Centers (USEACs). I frequently visit our offices and the organizations our USEACs partner with to help U.S. businesses begin exporting or export to more markets overseas. My part of the economic development pie is only exports; however, the Department of Commerce as a whole touches numerous aspects of economic development. Among many other resources — like the National Weather Service, which is always an interesting thing to point out — Department of Commerce bureaus offer trade counseling, technical programs, regional planning, and a variety of other resources that benefit U.S. businesses.

Within Commerce, my peers like Joann Hill collaborate across the country with other federal, state, local and private organizations similar to MMBA. These are critical relationships because the more robust, collaborative, and widespread they are – as in Jackson – the more of a synergy they create.

Across the country, organizations like MMBA that work to create or expand mutually beneficial relationships between women- and minority-owned businesses, suppliers and service organizations, are critical to minority businesses’ success. The reality is that minority businesses are more likely to export than other businesses. It is also true that we have seen a spike in minority women entrepreneurship.

There are numerous reasons why minority businesses should export more. Minority-owned exporting firms are typically larger than their non-exporting minority-owned counterparts. In fact, average annual receipts for minority exporting firms were $7.4 million as compared to $141,776 for minority-owned non-exporting firms in the most recent data available.

For all U.S. companies, the news on exporting is good. In July, the Department of Commerce highlighted data about the export totals achieved in U.S. metropolitan areas in 2014, which helped our country reach a national record of $2.34 trillion in exports for the year. In 2013, companies that exported to one market averaged just over $400,000 each in export sales, while companies that exported to 2-4 markets that year averaged more than triple that value.

Presently, exports support an estimated 11.7 million U.S. jobs, up 1.6 million since 2009. On average, export-related jobs pay up to 18 percent more than non-export related positions.

So, beyond the terrific group of small, medium, and large businesses; service providers; trade organizations; and fellow government organizations I spoke to last week, I will continue my trek around the country, touting the immense benefits of exporting. But I leave minority businesses with this one piece of advice: if you run a small shop, you know that keeping it going takes two things: time and money.

If you are going to be serious about pursuing global markets, you have to invest the time and be prepared to invest capital as well. You can’t do this all alone, which is why we are here to help. Be sure to take advantage of the numerous resources available from the Department of Commerce, your state and local economic development organizations (including places like MMBA), and forge ahead with confidence!

Note: Following the luncheon, DAS Griffin spoke with Mississippi Public Broadcasting. To listen to the interview, visit www.mpbonline.org.