U.S. commercial officials in Cyprus are exploiting all means available to promote exports: other people's money, new electronic media, jawboning, and old-fashioned service

Business America, April, 1997

The combination of limited resources and strong competition from other countries has meant that officials at the U.S. Embassy in Nicosia, Cyprus, have had to be very creative in developing a commercial program to ensure U.S. exporters get their fair share of growing Cypriot imports. They have been successful by exploiting all means available to promote exports: other people's money, new electronic media, jawboning, and good old-fashioned service. Their success at the "macro" level is clear: in 1996, for the second year in a row, the United States was the number one exporter to Cyprus. Our trade surplus with Cyprus is large and growing (US$600 million in 1996).

They have also had some failures. Embassy officials have asked Business America to publish their experiences, to help inform other U.S. overseas commercial posts, as well as to show American business people how their commercial representatives are working to help them compete.

Cyprus has a small but very dynamic economy, which has experienced positive economic growth for two decades. Growth rates averaged 4 percent a year for the last ten years, though the economy slowed considerably (to 1.5 percent) in 1996. The driving force in the economy is tourism and, lately, other services. Two decades of positive growth have resulted in per capita incomes in Cyprus of over US$14,000/year.

Progressively higher levels of income have meant Cypriots can afford to indulge their taste for high-quality goods and services. Despite our competitors' advantages of historical ties (the United Kingdom is the former colonial power and remains Cyprus' main trading partner, with two-way trade in 1995 of US$597 million, vs. $495 million for U.S.-Cyprus trade), proximity and formal trade agreements (Cyprus has been phasing in a Customs Union agreement with the European Union since 1986), U.S. exporters' share of Cypriot imports has doubled since 1990. (Cyprus' exports to the United States have stagnated over the period at $15 million per year.)

Other People's Money

One of the disadvantages of a small market is that there are few American companies located here. Most products and services are represented by agents and distributors, who often represent competing European or Japanese products as well. We have sought to create a loyalty to the U.S., and to our products, in a number of ways -- at no cost to the U.S. Government.

* Commercial Excellence awards Each year companies compete for four awards that recognize their contribution to U.S.-Cyprus commerce (the categories are: "Business of the Year," "New Business," "Offshore Achievement," and "Commercial Diplomacy"). This event, begun in 1992, has developed into a major social and business occasion, with several firms competing in each category. The awards are given out at a gala dinner (completely financed by sales of tickets to guests) at the capital's best hotel, attended by Ministers and other high-level government and private sector officials. The Ambassador then visits the winners at their offices/plants to see their operations and meet their staff, usually with press coverage.

* The International State Fair. The biggest event on the Cyprus commercial scene is the annual "International State Fair." It attracts some 150,000 visitors (from a population of 620,000), and provides one of the best vehicles available for advertising U.S. products and services. The commercial section organizes the U.S. exhibition at the fair, recruiting exhibitors and managing the design and operation of the pavilion. To accommodate the growing number of representatives of U.S. firms, this year we will move to a substantially larger pavilion (up from 1,000 square meters in 1996 to 1,500 square meters -- an increase of 50 percent). To publicize the U.S. pavilion, we hold a press conference at the opening, and a large (1,000 invitees) reception. One innovation this year is a planned Worldnet on trade to be broadcast from the fair grounds at the press conference. We expect to attract a high-level audience from the public and private sectors. Our participation, including the reception, is financed completely through fees paid by the exhibitors.

* Fees for Services. Last year we started charging for some of our commercial services. Now, we can use funds generated from advertising at the International Fair and subscriptions to the "Commercial News USA" for other export promotion activities.

New Electronic Media

In 1996, we added new electronic media (a Bulletin Board system, an Internet "Newsgroup" and an Internet Homepage with commercial news) to our trade promotion activities.

* "U.S. Trade Information Bulletin Board System (BBS)." With a grant from the Department's Business Facilitation fund in 1995, we developed a Bulletin Board System that links the computer in the Commercial Section to computers in the libraries of the Chamber of Commerce in two cities, the American Center, and the U.S. Information Service office on the Turkish Cypriot side. Customers dial in to access the Thomas Register, the National Trade Data Bank, and a business telephone number database. We use the e-mail capability of the system to send out announcements of trade fairs, and other items of commercial interest. Through the system, each of these sites has, for the first time, immediate access to up-to-date information on doing business with the United States. We hope to expand the system to another Chamber library this year.