U.S. Secretary of Commerce Penny Pritzker Announces Next Phase of the National Export Initiative -- NEI/NEXT


Tuesday, May 13, 2014

Thank you, Emily.  It is wonderful to be introduced by such a dynamic business leader in Washington’s media industry. Thank you to everyone at The Atlantic, AtlanticLIVE, and Atlantic Media for hosting us.  It is great to be with all of you.

This month is World Trade Month, and this week is National Small Business Week.  Let me start with a story at the intersection of trade and business.

Twenty two years ago in North Carolina, a young man named Shane Cooper was racing bikes on the amateur circuit.  His father was working in the sock-making industry. Shane had an idea to help pay for his racing hobby: make and sell socks that are customized for biking.  He started selling socks in 1992.  Of course, running a business is not easy. Shane’s team had some tough years – particularly when their factory burned down in 2001.  But since 2008, their workforce has grown by 25 percent – driven in part by the fact that they have nearly tripled their number of international markets from 12 to 35.  For the first quarter of this year, their international revenues are up about 50 percent compared to last year.

I am pleased to say that the Commerce Department staff in Charlotte was a partner to Shane – answering his questions about how to access new markets and take advantage of trade agreements. Today, several Tour de France teams now wear Made-in-America socks from DeFeet International.  As a triathlete, I just placed an order. Shane and his son are here today.  Let’s give them a round of applause. 

The fact is, we have heard many export success stories in recent years. In 2010, President Obama’s vision was that American businesses could drive economic growth and create good jobs by increasing their exports. That led to the launch of the National Export Initiative – the first-ever government-wide, comprehensive plan of its kind.

The National Export Initiative – the NEI – has been a remarkable success: the United States has had four straight record-breaking years of exports.  We hit an all-time high of $2.3 trillion dollars last year – up $700 billion from 2009. Nearly one-third of our economic growth since mid-2009 has been driven by exports. Nearly 30,000 businesses have started exporting for the first time.

And most importantly – just four years after NEI was launched –1.6 million more Americans have export-supported jobs, bringing the total to 11.3 million – the highest in 20 years.

In addition, exports have been the driving force behind growth in communities across the country.  In fact, exports account for nearly all of the post-recession growth in cities like Albuquerque, Youngstown, Detroit, and Kansas City. Kansas City Mayor Sly James told the Commerce Department the following: “Businesses here have awakened to the fact that their next order could come from anywhere.  Exporting is a major reason why Kansas City companies – from transportation equipment to chemicals – are creating jobs once again.”

Clearly, foreign demand for U.S. goods and services is helping American families gain economic security – buying more homes and cars, saving for college and retirement, or simply heading out for a night on Main Street.  Each day, more Americans appreciate the fact that 95 percent of the world’s customers are outside our borders.  The middle class is growing quickly in regions like Southeast Asia, Sub-Saharan Africa, and South America. These trade partners want what our businesses have to offer – from consumer goods to infrastructure products – and everything in between.

We cannot control the ups and downs of the global economy. But we can and must remain vigilant to maximize the potential of our free trade agreements and of every American company that wants to grow, hire, and compete through exporting.

Yet still, too many American firms remain focused on domestic markets.  Less than five percent of our companies export, and more than half of those sell to only one market.  Clearly, for all the progress we have made, we have more work to do.

Last year, the NEI team of 20 federal agencies stepped back to take a fresh look at the NEI. We began assessing the NEI’s impact so far. We held focus groups in 11 cities and conducted surveys – getting valuable feedback from 6,000 customers and partners. We evaluated the impact of our trade missions, trade shows, and popular services, like Gold Key. And we began exploring what major opportunities lay ahead, particularly in America’s most competitive sectors.

Today, I am pleased to announce NEI NEXT – a data-based, customer service-driven initiative to ensure that more American businesses can fully capitalize on markets that are opening up around the world.

NEI NEXT is focused on five strategies:

1.  We will help businesses find their NEXT customer abroad.

2.  We will increase the efficiency of a company’s first and NEXT shipment.

3.  We will help firms finance their NEXT order.

4.  We will help communities integrate trade and investment into their NEXT growth plans.

5.  And we will open up the NEXT big markets around the world for our companies while ensuring a level playing field.

A number of efforts in each of these five areas will be announced in the months ahead, but let me highlight three ways we are already putting these strategies into action.

First, we are customizing our export promotion efforts.  We want to help more businesses of all sizes find the best markets for their American-made products.

For example, more than half of our free trade agreements are in Latin America, where economies are diversifying and the middle class is quickly growing.  That is why we recently launched the Look South initiative.

Already, our Look South team has created more than 100 tailored guides that show where American products are in highest demand across the region – from auto parts in Honduras to medical devices in Colombia. In addition, we are helping our trade partners adopt best practices to facilitate more commerce.  For example, we are holding workshops for customs officials in Guatemala, Peru, and the Dominican Republic. And we are partnering with mayors and governors to market Look South to their respective business communities.  For example, our staff in Sacramento and in Mexico are supporting California Governor Jerry Brown’s just-announced trade mission in July.

Under NEI NEXT, expect more of these targeted export-promotion efforts, including initiatives to help more women and minority-owned firms that want to sell goods abroad, as well as sector-specific efforts to increase exporting in high-tech and emerging industries.

Second, under NEI NEXT, the Department of Homeland Security is spearheading a goal to implement the “single window” by the end of 2016.  This is huge.  “Single window” means that businesses will be able to use just one electronic platform to complete the forms needed by dozens of federal agencies. 

This is smart regulatory reform that will streamline, simplify, and automate processes – saving government and businesses precious time and money. Every minute that American-made goods wait at borders and entry points means higher costs, lower customer satisfaction, and reduced competitiveness.  In a fiercely competitive global economy, there is no room for unnecessary delays. 

Third, under NEI NEXT, the Small Business Administration and the Export-Import Bank will equip more community banks to offer federal export-financing tools. The fact is, traditional credit is still hard-to-find for too many potential exporters – even for creditworthy firms with eager customers waiting abroad. Through NEI NEXT, we will increase the number of partners in the financial industry who offer federally-backed working-capital loans, loan guarantees, and insurance. For example, the Ex-Im Bank has formed a cross-marketing partnership with the Finance, Credit, and International Business Association – a group that will help us reach more than 1,000 loan officers and their customers.

We want to see more successes like Illinois-based ProStuff, owned by Pierce Barker and Roger Johns.  They make the starting gates that drop down when a bike race starts.

When Pierce started with just three employees in 2002, he quickly realized that the domestic market for his products was too small to sustain his business.  He saw potential overseas and secured financing with help from a trade specialist at our Export Assistance Center in Rockford, Illinois. Today, ProStuff has grown to nine employees who ship to customers in 45 countries.  In addition, they support a network of suppliers and distributors.  Their export revenues have grown by one-third since 2010 – now accounting for roughly 70 percent of their sales.  In fact, their products were used in the London Olympics in 2012. 

Pierce said, “The world has become a very transparent, flat place for us.”  Ultimately, NEI NEXT will create the environment in which more business owners – and their workers – can say those exact same words.  

As we empower more companies like ProStuff to compete globally, how will we measure the success of NEI NEXT? Not only will we continue to track the overall dollar value of U.S. exports, but we will also dig deeper to collect additional data to inform our efforts, such as: the number of exporters in each region of the United States, the number of markets our exporters are reaching, the extent to which free trade agreements are helping our companies grow.

This data will reveal which markets show greatest demand for U.S. products and services. This data will allow us to learn why and how certain American industries are succeeding.  And this data will help us identify and replicate best practices in exporting.

Finally, the Administration will continue to advocate for an overall environment in which American exporters and their workers can thrive.  Two pressing priorities come to mind – both of which require action from Congress.

First, as a nation, we must invest more in our infrastructure.  Congress needs to provide funding to fix and modernize the roads, bridges, ports, and airports that help commerce flow smoothly. The fact is, the United States has deferred trillion of dollars in infrastructure investment – earning a D+ grade from the American Society of Civil Engineers. 

As part of NEI NEXT, the Department of Transportation is developing a national freight plan to prioritize where to invest our dollars. With interest rates still low, now is the time to put construction crews back to work, and to implement a 21st-century transportation system that will efficiently move our goods, boost our exports, and increase our competitiveness.

Second, the United States must lead the way with trade agreements that reflect our values. I have talked to more than 1,000 American CEOs of companies of all sizes.  Trade agreements are one of their top priorities. And for good reason: America’s 20 trade agreement partners buy nearly half of our exports. 

Imagine our potential when the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership link us with 33 more countries that are hungry for Made-in-America products.

Companies like Giant Loop in central Oregon support free trade agreements.  Giant Loop makes high-end saddlebags that wrap around your motorcycle. I have a bag like that for my bike.

In 2008 – at the height of the recession – Harold Cecil started Giant Loop with just a few thousand dollars.  As an entrepreneur myself, I know that takes chutzpah. 

With the Commerce Department’s help, Harold was able to sell his bags at foreign trade shows.  To date, he has sold his products in 21 countries.  Exports now account for roughly 25 percent of his revenues.

To keep up with demand, Harold hired four people.  He said, “I feel really good about creating jobs [because] this part of Oregon was hard hit by the recession.” Harold specifically said that low duty rates from free trade agreements help shave off costs and make his products more attractive in foreign markets.  

One such agreement – the Trans Pacific Partnership – presents an opportunity that we cannot afford to ignore.  The benefits are clear.  Some economists say TPP could boost U.S. exports by $120 billion per year.  In addition, TPP will provide greater regulatory coherence and stronger IP protections, as well as commitments in areas like e-commerce, the environment, and state-owned enterprises. 

After four years of negotiations, we are at the endgame.  We want to resolve the outstanding issues with the deal as soon as possible to conclude an ambitious agreement that reflects the President’s vision of how we make trade work better for Americans.  Inaction will have real consequences.  We must work closely with Congress to pass Trade Promotion Authority and get this deal done.

Let me close with some advice from Pierce Barker, the dynamic Illinois business owner who makes bike gates.  He said: “I’m continuing to operate on the basis of some cherished principles: Keep your word to your customers; they are your best salesmen.  Respect their culture and speak their language, be it Spanish or Chinese, even if it’s just a few words.  Treat everyone fairly. Constantly improve your technology. Skate to where the puck is going to be. Build the best stuff. Never stop being the best in class, in competition, and in business, and ultimately you will win.” Wise words to live by.

Clearly, Pierce embodies the spirit that flourished under the NEI, which has resulted in 1.6 million more export-supported jobs. My commitment is that this Administration will continue to foster that spirit, as we roll out NEI/NEXT, as our exporters create even more good jobs, and as we continue to send the clear message that America is Open for Business.

Let’s get to work.  Thank you.

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