What is export promotion and development? This article defines what it means and how it affects a government’s export strategy, such as the National Export Initiative (NEI) in the United States.
Due to the lack of knowledge about how to effectively market abroad, many newly emerging developing countries have been unable to increase their export volume on their own. Even with advanced technology and the widespread use of digital mobile devices, marketing outside of one’s borders is a daunting challenge for most small businesses in any country. This involves looking for new markets that are easy to do business in and identifying customers in those markets.
To encourage exports, governments step in and assist small businesses in a variety of ways. One being helping increase the sales of products that are currently available for export. This is called export promotion or export development and is typically carried out by a Trade Promotion Organization (TPO). Not all countries have this service due to internal limitations.
To find out if your country has a program available, conduct an Internet search with the key words, “trade promotion organizations” ___________________ and insert your country name after it. For example, trade promotion organizations Ireland or trade promotion organizations Turkey. You could also try, “export promotion agencies” _____________ to see what other available resources come up.
Established by a government, the purpose of a TPO is to encourage, promote and develop trade with other countries. A TPO can also conduct trade missions and bring foreign buyers to a local-based trade show.
In short, a TPO serves as an adviser of sorts to the government on international trade and related matters.
Why the Need For Export Promotion or Export Development?
Most governments make export promotion and development a priority because it helps them achieve certain economic development goals. For the United States, those goals might be to offset market fluctuations, to use it as a tool for economic growth, to create jobs and, at the same time, to support national exports.
Although the Internet makes it easier to connect with individuals and businesses worldwide, it is still difficult for small businesses to let potential customers know they exist online. Hence, the government can assist small businesses to find solutions to the challenges they face, to enhance their global competitiveness, to explore business opportunities and to aid in most financial issues that might arise as a result.
Here are a couple of federal agencies and organizations that help promote exports and offer trade assistance. Beware, some agencies charge fees for their services.
1. The U.S. Commercial Service, the trade promotion arm of the U.S. Department of Commerce’s ITA
The purpose of the trade promotion arm is to help create economic opportunity for American workers and businesses. By promoting trade and investment, the ITA feels it is promoting prosperity and a better world.
2. Commercial News USA – The U.S. Export Promotion Magazine
Commercial News USA, the official export promotion magazine of the U.S. Department of Commerce, is a catalog-style magazine designed to help American companies promote products and services to buyers in more than 178 countries.
Advertising in Commercial News USA provides American companies with an opportunity to market products and services around the world. Advertisers in Commercial News USA have the potential to increase export sales with minimal investment.
3. Market Development Programs (USDA Foreign Agriculture Services)
The Foreign Market Development (FMD) Program aids in the creation, expansion and maintenance of long-term export markets for U.S. agricultural products. There are several programs in place, from Market Access Program (MAP) and Emerging Markets Program (EMP) to the Quality Samples Program (QSP), each with the goal of promoting U.S. commodities overseas.
4. State Trade and Export Promotion (Step) – SBA
The State Trade and Export Promotion Program (STEP) is a three-year pilot trade and export initiative authorized by the Small Business Jobs Act of 2010. Funded by federal grants with matching funds from individual states, the STEP Program is designed to help increase the number of small businesses that are exporting and to raise the value of exports for those small businesses that are currently exporting.
5. Trade Promotion Coordinating Committee (TPCC)
The Trade Promotion Coordinating Committee (TPCC) is an interagency task force that ensures the coordination and development of a governmentwide export promotion plan. The TPCC was established to coordinate governmental efforts to increase U.S. exports. It also actively participates in the drafting of the TPCC annual National Export Strategy report delivered to Congress, which serves as an effort to guide federal export promotion policy, goals and activity.
6. Export-Import Bank of the United States (Ex-Im Bank)
The Ex-Im Bank has provided financing that has led to about $41 billion in U.S. exports. For example, the Export-Import Bank supported about $3.6 billion of U.S. exports to India last year.
For small business help, visit: http://www.exim.gov/smallbusiness/.
7. Small Business Center, Overseas Private Investment Corporation (OPIC)
OPIC is the U.S. government’s development finance institution. It mobilizes private capital to help solve critical development challenges and, in doing so, helps U.S. businesses, including small businesses, gain footholds in emerging markets and catalyze revenues, jobs and growth opportunities both at home and abroad.
8. U.S. Trade and Development Agency (USTDA)
USTDA's programs are responsible for generating more than $17.6 billion in U.S. exports to emerging markets, supporting an estimated 110,000 U.S. jobs during the last 10 years.
For small businesses, visit: http://www.ustda.gov/businessopps/smbusinesses.asp.
9. Office of the United States Trade Representative (USTR)
The Office of the U.S. Trade Representative (USTR) is responsible for developing and coordinating U.S. international trade, commodity and direct investment policy, as well as overseeing negotiations with other countries.
For small business help, visit: http://www.ustr.gov/trade-topics/small-business.
10. Department of the Treasury
The Treasury Department works with other federal agencies, foreign governments and international financial institutions to encourage global economic growth, to raise standards of living, and, to the extent possible, predict and prevent economic and financial crises.
For small business help, visit: http://www.treasury.gov/resource-center/sb-programs/Pages/default.aspx.
For more information on U.S. government agencies involved in export promotion, visit: U.S. Government Agencies Involved in Export Promotion: Overview and Issues for Congress. The United States has free trade agreements (FTAs) in place with more than 18 countries. Just like export promotion agencies, FTAs improve foreign market access for exporters, promote economic growth and create jobs.
For a listing of FTAs, visit: http://www.ustr.gov/trade-agreements/free-trade-agreements.