Seizing the Export Opportunity

The greenback is ailing these days, trading at record lows against a wide range of foreign currencies. But believe it or not, there's one area of the economy that's benefiting in a big way from the declining U.S. dollar -- exports.

For most U.S. businesses, however, selling to overseas customers is a daunting challenge, reflected by the fact that only 4 percent of American businesses of all sizes export their products around the globe, according to Howard Vine, a partner at Dickstein & Shapiro law firm and moderator of a panel discussion on trade opportunities for small firms held Wednesday night in Washington.

Nationwide, about 230,000 small- and medium-sized businesses total sell to overseas customers, Pat Kirwan told attendees of the forum, which was sponsored by Zana Network, an organization created to provide advice and resources to small- and medium-sized companies.

"There's a perception [by small firms] that there's a huge risk" in doing business outside of the United States, said Kirwan, who works for the Trade Promotion Coordinating Committee.

A lot of small-to-medium enterprises are run by a single entrepreneur who invariably struggles to manage day-to-day operations, making it hard for find the time to research exporting opportunities, according to Clayton Yeutter, a former U.S. trade representative and currently a senior adviser at law firm Hogan & Hartson.

Small business owners are worried about whether they can speak the language in a particular country, afford to travel there or they may have concerns over protecting their intellectual property, Yeutter said.

"From a federal government perspective, the U.S. sees huge benefits by helping companies go international," said Kirwan. "Small businesses that export pay 15 percent higher in wages" than those that do not. Additionally, international trade businesses go bankrupt less frequently, he said.

Whitney Baird, a State Department deputy special representative focused on commercial and business affairs, said small firms might find opportunities by offering their specialized skills, services or goods to developing countries divesting themselves of former state-owned firms.

Just because consumer products haven't been introduced to a particular market doesn't mean a country doesn't want them, she added. Baird highlighted environmental technologies as a growth area.

Peggy Keshishian of the Department of Commerce's Commercial Service, noted that her organization has a presence in more than 75 countries and 108 offices nationwide that provide counseling and marketing information for businesses looking to sell their wares abroad. Her peer at the U.S. Export Assistance Center, Anne Grey, said the center offers a "gold key" service: For a fee, the organization will set up five pre-screened appointments for a business to meet with a potential partner in the country of their choice.

Skip Jones, deputy assistant secretary for trade agreements and compliance at the International Trade Administration, noted that it's important for small firms to know their rights in trading with foreign countries and how a trade agreement could benefit them.

James Min, DHL Express's vice president for international trade affairs and compliance, said only one-in-five firms uses the preferential treatment available through trade agreements. The shipping giant sees "a significant spike in shipping volume" to countries after a government trade agreement has been finalized there, he said.

Kirwan said the ITA has seen that bigger firms tend to have resources to help them remedy problems encountered with exporting products and that's why the U.S. government often finds itself aiding small businesses. While a small firm may feel that its world revolves around one issue in regards to encountering an export problem, he said, "we often see a systemic issue" experienced by many firms and by diagnosing that it is easier to fix.

For more information on export resources, see the "How Do I ... Export" post I wrote earlier this year. If you've got any export tips or resources you'd like to share, please post them in the comments section below.

By Sharon McLoone |  November 16, 2007; 3:27 PM ET Tools and Tips
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Please email us to report offensive comments.

Even among the companies that do export, many of them are completely unaware of the Government benefits that are in place to take advantage of tax benefits.

Some of the benefits include:

- Lower effective tax rate and permanent 20% tax savings on global sales;
- Reduced taxable base of the U.S. exporter in the U.S.;
- Elimination of double taxation for C Corporations;
- Increased cash flow for the company;

These companies need to be made aware of these benefits so that they remain competitive in the world marketplace, stay in business and increase employment here in the states.

And, acquiring these benefits is easy when you know who to talk to and what is required.

If you have any questions you can email

Posted by: Travis Waack | November 22, 2007 9:33 AM

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