Trade promotion activities of the International Trade Administration

Business America, May 26, 1986 by Bruce Smart

Trade Promotion Activities of the International Trade Administration

The increasing integration of the world's economies is reflected in the growing importance of U.S. exports to our nation's welfare. A strong and vital exporting sector is essential to improving the U.S. trade position and will be a major source of economic growth and employment in the United States. Five million American jobs, including one out of every six in manufacturing, depends on exports. Around 20 percent of our gross national product relates to world trade.

Today, we face substantial problems in remaining competitive internationally. Since 1960, the U.S. share of world trade has dropped from roughly 18 to 15 percent. Our massive trade deficit indicates the scope of the problem. This year, the U.S. merchandise trade deficit is expected to hover around 1985's $148.5 billion level. The continuing effects of the high dollar during much of this decade, a strong economy that has attracted imports, and the import constraining effects of large external debt for many lesser developed nations have all contributed to the problem.

Pressure is growing in the United States to enact protectionist restrictions as a solution to our trade deficit problem. This approach actually creates more problems than it solves. Tariff increases limit U.S. imports, appreciate the dollar, and cause considerable cost to consumers. Tariffs further invite foreign retaliation, moving the world trading system backward at a time when liberalization is desperately needed.

The Administration's objective is to avoid protectionism by creating an environment for improved U.S. competitiveness and accelerating efforts to "level the playing field,' as discussed in the article beginning on page 2. Last fall, President Reagan set in motion a series of initiatives to address trade barriers and foreign subsidies. Since September the Administration has initiated a number of investigations against unfair practices by our trading partners.

The Administration is also increasing efforts to protect U.S.-generated intellectual property and is vigorously supporting a new round of multilateral trade negotiations that will strengthen the rules governing trade.

While President Reagan has made clear his intentions to foster the climate for healthy trade, the key to our nation's trade success--and our competitiveness as a whole--lies with the private sector. Businesses must be productive, make the kinds of products that will sell in overseas markets, and stay ahead of foreign competition.

Today, only 1 percent of U.S. businesses account for 80 percent of U.S. exports. One of our major goals at the International Trade Administration is to involve more U.S. businesses in exporting through our various export promotion programs and services. ITA trade promotion activities fall within three operating units:

The U.S. and Foreign Commercial Service (US&FCS)--the framework within which ITA gathers accurate and timely commercial information, distributes it through a worldwide network of trade counselors, and provides in-depth counseling, assistance, and support to the business community;

Trade Development (TD)--the industryoriented unit responsible for formulating trade policy and promotion activities; and

International Economic Policy (IEP)--the office organized on a country and regional basis which gives market-specific counsel to American business.

All three units are interdependent and work closely for the success of the overall ITA trade promotion program.

U.S. and Foreign Commercial Service

The US&FCS offers the American business community coordinated trade assistance, both in the United States and abroad. We assist new exporters entering their first overseas market; we also help experienced exporters expand their share of a given market or penetrate additional or harder-to-enter markets.

Overseas, the US&FCS maintains offices in 127 major foreign cities in the 64 countries that are the United States' principal trading partners. More than 180 commercial officers and over 500 Foreign Service Nationals provide a full range of business, investment, and financial counseling services. These include credit risk analysis, advice on market entry strategy and source of financing, and major project identification, tracking and assistance. In addition, US&FCS overseas officers can introduce U.S. firms to local business and government leaders, assist in trade disputes, and provide liaison between American and foreign business communities.

Commercial officers and their staffs gather data on specific export opportunities, country trends affecting trade and investment, and prospects for specific industries. They identify and evaluate agents, distributors, and joint-venture partners for U.S. firms.

The domestic side of the US&FCS operates 48 district offices in industrial and commercial centers throughout the nation. Experienced trade specialists in the district offices tell current and prospective exporters about trade and investment opportunities abroad; foreign markets for U.S. products and services; financing aid; insurance from the Foreign Credit Insurance Association; tax advantages of exporting; international trade exhibitions; export documentation requirements; economic facts on foreign countries; and export licensing and import requirements.