Chapter 4: Export Advice

In This Chapter

FACT: About 30 percent of non-exporters say they would export if they had information on how to get started, such as best markets, potential buyers, and export procedures.

INSIGHT: The U.S. government is the leading provider of this kind of essential market information. To figure out where to begin, visit www.export.gov or call an international trade specialist at (800) USA-TRADE (800-872-8723).

MAKING THE GOVERNMENT WORK FOR YOU

Now that you’ve had an opportunity to examine some of the factors involved in an exporting and marketing plan, let’s review some key sources of assistance. A lot of help is available to your company at little or no cost and makes the exporting process much easier. This chapter gives a brief overview of the assistance available through federal, state, and local government agencies, as well as in the private sector. Other chapters in this guide provide more information on the specialized services of these organizations and how to use them.

U.S. COMMERCIAL SERVICE EXPORT ASSISTANCE CENTERS

The U.S. Commercial Service of the U.S. Department of Commerce maintains a network of international trade specialists in the United States to help American companies export their products and conduct business abroad. International trade specialists are employed in offices known as Export Assistance Centers in more than 100 cities in the United States and Puerto Rico to assist U.S. exporters, particularly small and medium-sized companies. Export Assistance Centers are known as “one-stop shops” because they combine the trade and marketing expertise and resources of the Commercial Service along with the financial expertise and resources of the Small Business Administration and the Export-Import Bank.

Export Assistance Centers also maximize resources by working closely with state and local governments as well as private partners to offer companies a full range of expertise in international trade, marketing, and finance. International trade specialists will counsel your company on the steps involved in exporting, help you assess the export potential of your products, identify markets, and locate potential overseas partners. They work with their international colleagues in more than 80 countries to provide American companies with turnkey solutions in foreign markets.

Each Export Assistance Center can offer information about the following:

To find the Export Assistance Centers nearest you, visit www.export.gov/eac.

U.S. COMMERCIAL SERVICE OVERSEAS POSTS

Much of the information about trends and actual trade leads in foreign countries is gathered on site by the officers of the Commercial Service. Those officers have a personal understanding of local market conditions and business practices in the countries in which they work. The Commercial Service officers work in more than 150 offices located in more than 80 countries. They provide a range of services to help companies sell in foreign markets:

Some of the more important services are described in Chapter 6. You can access those services by contacting your nearest U.S. Export Assistance Center. The centers can also provide assistance with business travel before departure by arranging advance appointments with embassy personnel, market briefings, and other services in the cities you will be visiting.

TRADE INFORMATION CENTER, U.S. COMMERCIAL SERVICE

The Trade Information Center (TIC) is a comprehensive resource for information on all federal government export assistance programs and for information and assistance on exporting to most countries. TIC can be reached at (800) USA-TRADE (800-872-8723) or www.export.gov.

U.S. TRADE AND DEVELOPMENT AGENCY

Industry and international trade specialists in the U.S. Trade and Development Agency (TDA) work directly with individual firms and manufacturing and service associations to identify trade opportunities and obstacles by product or service, industry sector, and market. TDA analysts participate in trade policy development and negotiations, identify market barriers, and advocate on behalf of U.S. companies. TDA’s statistical data and analyses are useful in export development. The TDA staff also develops export marketing programs and obtains industry advice on trade matters. To assist U.S. businesses in their export efforts, TDA’s industry and international experts conduct executive trade missions, trade fairs, marketing seminars, and business counseling and provide product literature centers.

For further information, contact TDA at www.tda.gov.

FACT: Private consultants are expensive.

INSIGHT: It pays to take full advantage of publicly funded sources of assistance before hiring a consultant. When you do hire the consultant, you will receive greater value because your requirements will be more focused.

EXPORT-IMPORT BANK OF THE UNITED STATES

The Export-Import Bank is committed to supporting small business exporters. In fact, about

85 percent of its transactions support small businesses. The Ex-Im Bank’s products include specialized small business financing tools such as working capital guarantee and export credit insurance.

The working capital guarantee and insurance products enable small businesses to increase sales by entering new markets, to expand their borrowing base, and to offer buyers financing while carrying less risk. The Ex-Im Bank’s working capital guarantee assumes up to 90 percent of the lender’s risk so exporters can access the necessary funds to purchase or produce U.S.-made goods and services for export.

For more information, contact the Ex-Im Bank at www.exim.gov.

ADVOCACY CENTER, U.S. COMMERCIAL SERVICE

For a U.S. company bidding on a foreign government procurement contract, exporting today can mean more than just selling a good product at a competitive price. It can also mean dealing with foreign governments and complex rules. If you feel that the bidding process is not open and transparent or that it may be tilted in favor of your foreign competition, then you need to contact the Advocacy Center. This center coordinates the actions of 19 U.S. government agencies involved in international trade. Advocacy assistance may involve a visit to a key foreign official by a high-ranking U.S. government official, direct support from U.S. officials stationed overseas, letters to foreign decision-makers, and coordinated action by U.S. government agencies and businesses of all types and sizes. For more information, call (202) 482-3896 or visit www.export.gov/advocacy.

TRADE COMPLIANCE CENTER, U.S. DEPARTMENT OF COMMERCE

The U.S. Department of Commerce’s Trade Compliance Center (TCC) is an integral part of efforts by the U.S. government to ensure foreign compliance with trade agreements. Located within the Market Access and Compliance (MAC) unit of the International Trade Administration, TCC systematically monitors, investigates, and evaluates foreign compliance with multilateral, bilateral, and other international trade agreements and standards of conduct to ensure that U.S. firms and workers receive all the benefits that market-opening initiatives provide.

The TCC Web site provides a one-stop shop for American exporters facing market access and agreements compliance problems. The fully searchable database contains the texts of approximately 270 bilateral, regional, and multilateral trade and trade-related agreements, along with detailed market access information for more than 90 major U.S. markets. The online service enables U.S. exporters to file complaints about market access and agreements.

TCC can be reached by phone at (202) 482-1191 or by mail at the U.S. Department of Commerce, Room 3415, 14th St. and Constitution Ave., N.W., Washington, DC 20230.

BUREAU OF INDUSTRY AND SECURITY, U.S. DEPARTMENT OF COMMERCE

The Bureau of Industry and Security (BIS) is responsible for control of exports for reasons of national security, foreign policy, and short supply such as “dual use” items with both military and commercial applications. Assistance with compliance with export controls can be obtained directly from your local BIS district office or from the Outreach and Educational Services Division within the BIS’s Office of Exporter Services in Washington, D.C., which you may reach at (202) 482-4811. BIS also has two field offices that specialize in counseling on export controls and regulations; call the Western Regional Office at (949) 660-0144 or the San Jose Office at (408) 291-4212. For more information, visit the BIS Web page at www.bis.doc.gov.

MINORITY BUSINESS DEVELOPMENT AGENCY, U.S. DEPARTMENT OF COMMERCE

The Minority Business Development Agency (MBDA) identifies opportunities for U.S. minority business enterprises by promoting their ability to grow and compete in the global economy in selected industries. Through an agreement with the International Trade Administration, MBDA provides information on market and product needs worldwide and identifies ways to access education, finance, and technology to help minority businesses succeed. For example, MBDA and the International Trade Administration coordinate minority business participation in trade events. And the Minority Business Development Center network helps minority businesses to prepare international marketing plans and promotional materials and to identify financial resources.

For general export information, the field organizations of both MBDA and the International Trade Administration provide information kits and details about local seminars. Contact MBDA by phone at (888) 324-1551 or online at www.mbda.gov/.

WHERE ELSE TO LOOK FOR ASSISTANCE

Small Business Administration

The U.S. Small Business Administration (SBA) and its nationwide network of resource partners can assist you with export counseling, training, and financing. SBA has trade promotion and finance managers located in the U.S. Export Assistance Centers. In addition, you can find out more about exporting through the following:

For information on any of the programs funded by SBA, contact your nearest SBA field office by calling (800) 8-ASK-SBA (800-827-5722) or access the SBA home page at http://www.sba.gov/.

U.S. Department of Agriculture

The U.S. Department of Agriculture offers exporting assistance through the Office of Outreach and Exporter Assistance (OOEA). A part of the Foreign Agricultural Service (FAS), OOEA serves as the first point of contact for exporters of U.S. food, farm, and forest products. It provides them guidance, referrals, and access to foreign market information and assistance in getting information about export-related programs managed by the U.S. Department of Agriculture and other federal agencies. It also serves as a contact point for minority-owned and small businesses seeking assistance in these areas. OOEA will provide basic export counseling and connect you to the appropriate export program, such as the Market Access Program. Questions regarding any of the programs offered by the Department of Agriculture should be directed to OOEA at (202) 720-7420. The Web site is www.fas.usda.gov/.

National Center for Standards and Certification Information

The National Center for Standards and Certification Information (NCSCI) provides information about foreign standards and certification systems and requirements. In addition to providing comprehensive information on existing standards and certification requirements, NCSCI began a new service in 2005 known as Notify U.S. This free, Web-based e-mail subscription service offers U.S. citizens, industries, and organizations an opportunity to review and comment on proposed foreign technical regulations that can affect their businesses and their access to international markets. By subscribing to the Notify U.S. service, U.S. entities receive, by e-mail, notifications of drafts or changes to domestic and foreign technical regulations for manufactured products. To register, visit the Notify U.S. Web site at http://tsapps.nist.gov/notifyus/data/index.

District Export Councils

Besides the immediate services of its Export Assistance Centers, the U.S. Commercial Service has direct contact with seasoned exporters in all aspects of export trade. The U.S. Export Assistance Centers work closely with 58 District Export Councils (including those in Puerto Rico and the U.S. Virgin Islands) made up of nearly 1,500 business and trade experts who volunteer to help U.S. firms develop solid export strategies.

District Export Councils assist in many of the workshops and seminars on exporting that are arranged by the Export Assistance Centers, and they also sponsor their own. District Export Council members may also provide direct, personal counseling to less experienced exporters by suggesting marketing strategies, trade contacts, and ways to maximize success in overseas markets. You can obtain assistance from District Export Councils through the Export Assistance Centers that they are affiliated with.

State and Local Governments

State, county, and city economic development agencies; departments of commerce or development; and other government entities often provide valuable assistance to exporters. The assistance offered by these groups typically includes the following:

Financial Institutions

Many U.S. banks have international departments with specialists who are familiar with specific foreign countries and various types of commodities and transactions. Large banks located in major U.S. cities maintain correspondent relationships with smaller banks throughout the country. And with banks in many foreign countries, they may operate their own overseas branches, providing a direct channel to foreign customers.

International banking specialists are generally well informed about export matters, even in areas that fall outside the usual limits of international banking. Banks frequently provide consultation and guidance free of charge to their clients because they derive income from loans to the exporter and from fees for special services. Many banks also have publications available to help exporters. These materials are often devoted to particular countries and their business practices, and they may be a valuable tool for familiarization with a foreign industry. Finally, large banks frequently conduct seminars and workshops on letters of credit, documentary collections, and other banking subjects of concern to exporters.

Among the many services a commercial bank may perform for its clients are the following:

Export Intermediaries

Export intermediaries range from giant international companies to highly specialized small operations. For a fee, they provide a multitude of services, including performing market research, appointing and managing overseas distributors or commission representatives, exhibiting a client’s products at international trade shows, advertising, and shipping and preparing documentation. In short, the intermediary can often take full responsibility for the export end of business, relieving the exporter of all details except filling orders.

Intermediaries may work simultaneously for a number of exporters for a commission, salary, or retainer plus commission. Some intermediaries take title to the goods they handle, buying and selling in their own name. The products of a trading company’s various clients are often related, although the items usually are not competitive. One advantage to using an intermediary is that it can immediately make available marketing resources that exporters might take years to develop on their own. Many export intermediaries also finance sales and extend credit, facilitating prompt payment to the exporter. For more information on using export intermediaries, see Chapter 5.

World Trade Centers, International Trade Clubs, and Local Chambers of Commerce

Local or regional World Trade Centers and international trade clubs are composed of area businesspeople who represent firms engaged in international trade and shipping, banks, forwarders, customs brokers, government agencies, and other service organizations involved in world trade. Such organizations conduct educational programs on international business and organize promotional events to stimulate interest in world trade. There are nearly 300 World Trade Centers or affiliated associations in major trading cities in almost 100 countries. By participating in a local association, a company can receive valuable and timely advice on world markets and opportunities from businesspeople who are already knowledgeable in virtually every facet of international business. Among the advantages of membership are the services, discounts, and contacts from affiliated clubs in foreign countries. For more detailed information, visit http://world.wtca.org/portal/site/wtcaonline.

Many local chambers of commerce in the United States provide sophisticated and extensive services for members interested in exporting. Among these services are the following:

Industry and Trade Associations

In addition, some industry and trade associations can supply detailed information on market demand for products in selected countries, or they can refer members to export management companies. Industry trade associations typically collect and maintain files on international trade news and trends affecting their industry or line of business. They often publish articles and newsletters that include government research. National and International trade associations often organize large regional, national, and international trade shows themselves. To find a chamber in your area, visit www.uschamber.com.

FACT:

Fifty-eight percent of small business owners belong to one business organization (e.g., an association), and 42 percent belong to more than one.

INSIGHT:

Business and trade associations have these benefits:

American Chambers of Commerce Abroad

A valuable and reliable source of market information in any foreign country is the local chapter of the American Chamber of Commerce (AMCHAM). These local chapters are knowledgeable about local trade opportunities, actual and potential competition, periods of maximum trade activity, and similar considerations.

AMCHAMs usually handle inquiries from any U.S. business. Detailed services are ordinarily provided free of charge for members of affiliated organizations. Some AMCHAM have a set schedule of charges for services rendered to non-members. For contact information on AMCHAMs in major foreign markets, call (800) USA-TRADE (800-872-8723).

International Trade Consultants and Other Advisers

International trade consultants can advise and assist a manufacturer on all aspects of foreign marketing. Trade consultants do not normally deal specifically with one product, although they may advise on product adaptation to a foreign market. They research domestic and foreign regulations and also assess commercial and political risk. They conduct foreign market research and establish contacts with foreign government agencies and other necessary resources, such as advertising companies, product service facilities, and local attorneys.

Consultants in international trade can locate and qualify foreign joint venture partners and can conduct feasibility studies for the sale of manufacturing rights, the location and construction of manufacturing facilities, and the establishment of foreign branches. After sales agreements are completed, trade consultants can also ensure that implementation is smooth and that any problems that arise are dealt with effectively.

Trade consultants usually specialize by subject matter and by global area or country. These consultants can advise on which agents or distributors are likely to be successful, what kinds of promotion are needed, who the competitors are, and how to conduct business with the agents and distributors. They are also knowledgeable about foreign government regulations, contract laws, and taxation. Some firms may be more specialized than others. For example, some may be thoroughly knowledgeable about legal issues and taxation and less knowledgeable about marketing strategies.

Many large accounting firms, law firms, and specialized marketing firms provide international trade consulting services. When selecting a consulting firm, you should pay particular attention to the experience and knowledge of the consultant who is in charge of the project. To find an appropriate firm, seek advice from other exporters and from the other resources listed in this chapter, such as the Export Assistance Centers and local chambers of commerce.

Consultants are of greatest value to a firm that has specific requirements. For that reason, and because private consultants are expensive, it pays to take full advantage of publicly funded sources of assistance before hiring a consultant.

Export Seminars

Besides individual counseling sessions, an effective method of informing local business communities of the various aspects of international trade is through conferences, seminars, and workshops. Each year, Export Assistance Centers participate in approximately 5,000 programs on topics such as export documentation and licensing procedures, country-specific market opportunities, export trading companies, and U.S. trade promotion and trade policy initiatives. The seminars are usually held in conjunction with District Export Councils, local chambers of commerce, state agencies, and other trade organizations. Small Business Administration field offices also co-sponsor export training programs with the Department of Commerce, other federal agencies, and various private-sector international trade organizations. For information on scheduled seminars, contact your nearest Export Assistance Center by calling (800) USA-TRADE (800-872-8723) or by going online to www.export.gov/eac.