Trade finance: five DECs collaborate for exporters in four states

Business America, Feb, 1995 by John McCartney

What do the Southern Ohio, Northern Ohio, West Virginia, Western Pennsylvania, and Upstate New York District Export Councils (DEC) have in common? Answer: Until recently, just cold winters!

Regional network. With the introduction of U.S. Export Assistance Centers (USEAC) by the Trade Promotion Coordinating Committee (TPCC), the Southern Ohio, Northern Ohio, West Virginia, Western Pennsylvania, and Upstate New York DECS have discovered a unique synergy resulting from joint activity. Last fall, Secretary of Commerce Ronald H. Brown announced that Cleveland would be one of 15 USEACs across the country. The USEAC would have resident trade finance resources that would be delivered to District USEACs in Ohio, West Virginia, Western Pennsylvania, and Upstate New York. Consequently, the corresponding DECs have a common interest and a new opportunity to make a difference.

Integrating Trade Finance and Marketing. The five-DEC initiative was based on the TPCC's recognition that smaller exporters, who represent the greatest potential for increasing the volume of U.S. exports, are the same segment that most need financing. The 19 federal agencies that comprise the TPCC had introduced the USEAC concept for improving the interaction among federal agencies and their field offices for improved program delivery to clients. A primary focus of this collaboration is the linkage of trade finance from Ex-Im Bank and the Small Business Administration with Department of Commerce international marketing resources. In this way, companies who are investigating new markets can access international marketing and trade finance expertise by calling one office.

Five-DEC-sponsored Seminar. Commerce Department offices in Cincinnati, Buffalo, Pittsburgh, and Charleston, W.V. will become "spokes" of a hub-and-spoke USEAC network centered around the Cleveland USEAC. This new regional linkage gave the DECs associated with these offices a network they could add value to by bringing private sector expertise into the new USEAC equation. To this end, the five DECs designed a full-day conference on trade finance held on December 7, 1994 in Erie, Pa. The five DECs invited representatives from the USEAC agencies, bankers, and the exporters from the four states to be served by the USEAC network to participate.

And participate they did! Over 100 exporters and eight banks from Ohio, Pennsylvania, New York, and West Virginia traveled to a conference entitled "Winning Formulas for Financing and Facilitating Trade Transactions." Conference participants learned what is available and how exporters can use public and private sector resources to structure deals, arrange financing, and successfully manage transactions. As Leon Kulasa, a conference presenter and General Manager at Bricmont Enterprises, described his own experience in arranging financing on overseas sales, "When you look at the range of trade finance agencies and programs at first, it can appear too overwhelming - but once you understand the system and know the people, it pays a dividend." The comments from those present suggests that there will be many dividends indeed.

More Than a Seminar. The five DECs met the evening before the conference to exchange ideas on how they might collaborate in the future to support the objectives of the USEAC initiative. George Fechter, Vice Chair of the Western Pennsylvania DEC, proposed to the members present that they "take the pledge" to work together in support of the USEAC network and to advance the volume of exports in their new region. All who were present repeated the pledge aloud, heralding a new era for the USEAC region.

THE SECRETARY OF COMMERCE Washington, D.C. 20230

Dear Conference Sponsors:

As Chair of the Trade Promotion Coordinating Committee, I would like to recognize the ambitious event scheduled for December 7, 1994, in Erie, Pennsylvania. "Winning Formulas for Financing and Facilitating Trade Transactions" is a bold initiative designed to help U.S. exporters gain insights into trade finance opportunities. Trade finance is a critical element in helping U.S. exporters to remain competitive in the global marketplace. The "National Export Strategy" recommends increasing the availability of resources and improving coordination among Federal government financing agencies.

In a true partnership this conference is being orchestrated by five district export councils (DEC), and is sponsored by the U.S. Department of Commerce, the, Export-Import Bank (Eximbank) and the Small Business Administration (SBA). International marketing and trade finance experts will be on hand to discuss the mechanisms used by exporters, banks and international trade intermediaries in structuring these transactions. The event will provide the exporting firms' marketing representatives and the commercial lenders' financial officers with ideas for solving trade finance challenges faced by Ohio, West Virginia, Upstate New York and Western Pennsylvania exporters.

The National Export Strategy recommends formal integration of the international marketing expertise offered by the Department of Commerce with the trade finance expertise offered by SBA and Eximbank. This integration will become reality through the creation of a regional export assistance center (REAC) in Cleveland, Ohio. The Cleveland REAC represents a resource for exporters that will promote new trade finance programs and draw on the collective expertise of the local DECs.