Exporting Round-UpMarch 29, 2011
Exporting continues to be a key interest of small businesses. In recent weeks, NSBA board member Les Bowen was appointed to the President’s Export Council Subcommittee on Export Administration (PECSEA) while the Export Import Bank of the U.S. (Ex-Im Bank) approved record highs in export financing and prepares for their upcoming annual conference. Meanwhile new U.S. Small Business Administration (SBA) exporting programs are just getting underway while the House Committee on Small Business has proposed drastic cuts for many of SBA’s export-specific programs.
Les Bowen Appointed to Presidential Council
U.S. Department of Commerce Secretary Gary Locke recently announced the appointment of NSBA board member Dr. Leslie “Les” Bowen to President’s Export Council Subcommittee on Export Administration (PECSEA). This committee will advise the Commerce Department on the administration’s export control reform initiative.
“The PECSEA will provide invaluable advice as we continue to enhance our national security through the President’s reform efforts,” Locke said. “Export Control Reform requires a public-private partnership, and the business community’s insight on how that effort impacts the industrial base is vital.”
Les Bowen has been active on export issues with NSBA and the Smaller Business Association of New England for many years, and currently serves as the Chair for the NSBA Economic Development Committee. On March 10, the PECSEA held their first meeting in Washington, D.C. where the committee discussed export control reform efforts and heard from Secretary Locke.
Please click here for more information on the administration’s export control reform initiative.
Ex-Im Bank Financing
During the first quarter of FY2011, Ex-Im Bank approved $8.25 billion in total financing authorizations, supporting nearly $10.3 billion in export sales. The sales in the first quarter (Oct. 2010 through Jan. 2011) supported approximately 75,000 American jobs in communities across the country. The Bank’s support for U.S. small-business exports also rose during this same time by more than 22 percent, and new customer volume rose 55 percent.
Much of the first quarter success came from an all-time high in January with exports of U.S. goods and services reaching $167.7 billion—the largest monthly total ever recorded, surpassing the previous record of $165.7 billion, which occurred in July 2008, according to data released by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department.
BEA reported that for the 12-month period ending Jan. 31, 2011, exports of goods and services totaled $1.86 trillion, putting U.S. exports 18.2 percent above the level of exports in 2009. During the same period, exports have been growing at an annualized rate of 16.7 percent when compared to 2009, a pace greater than the 15 percent required to double exports by the end of 2014.
In FY2010 overall, Ex-Im Bank authorized a then record high of approximately $24.5 billion in loans, guarantees and insurance, supporting about 230,000 American jobs. With the continual growth authorization at the Bank, the U.S. appears to be on track for meeting President Obama’s goal of doubling exports and supporting two million American jobs by the end of 2014.
Amid the rise in export financing, Ex-Im Bank will hold its annual conference March 31-April 1 in Washington, D.C., providing a venue for discussing U.S. trade policy and developing strategies to expand the role exports play in the U.S. economy.
The conference attracts over 1,000 U.S. exporters, foreign buyers and lenders to hear presentations on the U.S. and world economies, learn about global export opportunities, network and discuss potential sales and export financing prospects. This year, five ambassadors, current and senior Obama Administration advisors and CEOs of leading U.S. and international companies are among the distinguished speakers.
Please click here for more information about Ex-Im Bank.
SBA Export Program Launched
As passed under last year’s Small Business Jobs Act, the State Trade and Export Promotion (STEP) pilot program kicked off March 1. The STEP program is a $90 million over three years initiative designed to help the SBA enhance export assistance to small business and thereby increase U.S. small-business exports.
The STEP program aims to address two specific goals: 1) increase the number of small businesses that export, and 2) increase the value of exports for those small businesses already exporting. The program is aimed at growing export opportunities in states that may not have as high a concentration of exporters, and requires that no more than 40 percent of the federal funds shall be given to the 10 states with the highest number of exporters.
Each year, $30 million will be made available to states who apply for grants. The application period for states for 2011 is between March 1 and April 26 with awards being issued no later than Sept. 20, 2011. States will compete based on their proposal to address the two primary goals, and federal funds will be used to fund between 65 and 75 percent of the state program.
Please click here for more on the STEP program.
SBA Export Budget Proposal
The House Small Business Committee recently marked up the FY2012 budget proposal for the SBA. While the administration requested $985 million—down slightly from the SBA’s allocation of $993 million in FY 2011 and $824 million in 2010—the committee approved a funding level that cut nearly $100 million from the administration’s proposal, more than a third of which would come from exporting programs.
The committee targeted cuts for several export-specific programs, citing duplication with other government programs. The committee endorsed eliminating the Office of International Trade, cutting the enhanced exporting provisions approved under the Small Business Jobs and Credit Act last year, including: the $30 million State Export Promotion (STEP) pilot program (see above); additional SBA personnel at Department of Commerce’s U.S. Export Assistance Centers (USEACs); and placing export staff in regional SBA offices.
The committee estimated that the elimination of the Office of International Trade and all programs within that office would save $38 million–$30 million for the STEP program and $8 million for the operation of the office.
Please click here for more on the Committee’s mark-up of the SBA budget.