Exporting RoundupOctober 6, 2011
The world of exporting continues to move forward despite various economic challenges. According to recent data from the Bureau of Economic Analysis (BEA), exports were up slightly in July from the previous month. The Senate, in addition to work on the Free Trade Agreements, is also entertaining a new proposal to address the effects of Chinese currency manipulation. Meanwhile, the President’s Export Council Subcommittee on Export Administration (PECSEA) continues to work on export control reform and the U.S. Small Business Administration (SBA) recently announced $30 million in grant awards to be made through the State Trade and Export Promotion Program (STEP).
U.S. Exports in July 2011
The U.S. Department of Commerce’s Census Bureau, along with BEA, announced in early-September that total exports for the month of July increased to $178 billion, up from the revised June number of $171.8 billion. This represents an increase of $6.2 billion in export growth. Although the growth in exports is positive, the U.S. still has a net trade deficit of $44.8 billion, down from the revised June deficit of $51.6 billion. This is due to the import of $222.8 billion in goods and services in July.
Compared with July 2010, this most recent data shows the overall trade deficit up $3.2 billion. Despite this gap, U.S. exports increased 15.1 percent over the last year. Unfortunately, imports also grew by 13.6 percent, resulting in a net trade deficit up $3.2 billion from June 2010.
Please click here for more details from BEA.
Chinese Currency Manipulation
On Sept. 22, Sen. Sherrod Brown (D-Pa.) introduced a bill, the Currency Exchange Rate Oversight Reform Act of 2011 (S. 1619), targeting the effect of Chinese currency manipulation on the U.S. economy. Senate Majority Leader Harry Reid (D-Nev.) informed reporters that next week the chamber will “start our work on trade matters,” including the legislation on China’s currency, though it was unclear when the bill would come to a final vote—most likely before the end of the year.
The bill would require the U.S. Commerce Department to investigate if a country is undervaluing its currency, which would be regarded as a government subsidy under U.S. law. Affected U.S. companies would then be allowed to seek retaliatory tariffs on goods imported from the country.
So far, the White House has refused to lend its support for any legislation imposing punitive sanctions on China and instead is relying on diplomacy, urging China to ensure its currency is on a level playing field. Many in the business community also oppose the Senate bill, saying it would not give China any incentive to change its policies but instead could cause it to retaliate against U.S. goods.
Please click here for more details.
Export Controls Reform Update
Dr. Leslie “Les” Bowen, NSBA board member and appointee to the President’s Export Council Subcommittee on Export Administration provides the below update to the status on export control reform.
Earlier this year, I was appointed by U.S. Commerce Secretary Gary Locke to serve on the President’s Export Council Subcommittee on Export Administration (PECSEA). PECSEA is a subcommittee of the President’s Export Council tasked with providing industry input on export control reform (ECR), a priority for the Obama Administration in their goal of enhancing U.S. export competitiveness. Small business has strong representation on the PECSEA – my guess is that about a third of its thirty-odd members are from small businesses.
After several meetings of the PECSEA this year, I am pleased to report that export control reform continues apace, despite the loss of two of its principal champions, Defense Secretary Gates and Commerce Secretary Locke. Undersecretary Eric Hirschhorn, head of the Bureau of Industry and Security, continues to champion the effort – you can read more about the goals and approach to ECR here.
There are four pillars underpinning the export control reform effort: development of a single control list, establishing a single licensing agency, creating a single IT system for license processing, and better coordinated export control enforcement. Of these, one of the most significant is the establishment of a single control list, which involves transfer of items from the U.S. Munitions List (USML) to the Commerce Control List (CCL) as well as creating tiers for export items based on their military significance. Several categories in the USML already are moving through the review process in preparation for Congressional review.
It is important that you read up on export control reform and learn more because your voice in support of ECR needs to be heard as the revised regulations are forwarded to Congress for review over the coming year. As more and more small businesses enter the exporting arena, this is going to become a more significant small-business issue.
Please click here for more on the President’s Export Council and the PECSEA.
SBA Awards $30 Million in State Export Grants
The U.S. Small Business Administration (SBA) recently announced $30 million in grant awards to be made through the State Trade and Export Promotion Program (STEP). The awardees for this first round of grant fund competition were 47 states, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, and the Virgin Islands. STEP is a three-year pilot program authorized by the Small Business Jobs Act of 2010, with the goal of increasing the number of small businesses that are exporting and to increase the value of exports for those small businesses already exporting.
The grant funding will support foreign trade missions, foreign market sales trips, subscriptions to services provided by the Department of Commerce, website translations fees, design of international marketing media, trade show exhibitions, participation in training workshops, and other critical export initiatives.
Small businesses that want to receive assistance under the STEP program should contact the organizations serving the states in which they are located.
Please click here for a list of state organizations and more information about the STEP program.