The latest U.S. Export Promotion Program features benefits for small businesses. However, recent news shows the program will also take strides to help bigger companies. The program will enter its next phase this year as the latter half of the mission that began in 2010.
Read on for more on the next stage of the U.S. Export Promotion Program and how it will affect trade operations in America, as well as overseas.
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A Summary of U.S. Export Promotion Programs
Export promotion plans have existed in many forms in recent decades. The latest program on the table is known as the National Export Initiative (NEI). According to Forbes, “The NEI/NEXT [phase of the program] intends to help American businesses reach out to customers outside of the U.S. and take advantage of opportunities in the global markets.”
The program, set in place by President Obama, outlines the need to back American exporters that sell goods to consumers outside of the U.S. market. These buyers account for 95 percent of the trade market. The deal aims to provide, among many incentives, improved export financing, as well as education on and enforcement of U.S. trade rights.
The NEI also promises to boost the U.S manufacturing and transportation sectors through increased production and transport of goods. In turn, officials hope to boost the economy through job growth.
The Impact on Exports
The NEI influences both U.S and global trade trends. Here’s a look at how the program benefits world-wide exports:
U.S. Export Benefits
The U.S. trade benefits from the NEI are vast. However, the main influence of the program is economic growth. Increased exports relate to business development and increased manufacturing numbers, which support the need for additional jobs. Additionally, increased exports sustain the U.S. as a global trade power and strengthen its role in the global market.
Global Export Benefits
In turn, through incentives that push U.S. goods overseas, U.S. companies enhance their partnerships with foreign investors. Furthermore, imports to the U.S. are slated for a reactionary increase, as well.
A White House brief from September 2010 notes, “Accordingly, exports can be expected to rise rapidly as the world recovers from the economic crisis. In support of this, the [International Monetary Fund] IMF forecasts imports of advanced countries to grow by 7.2 percent in 2010, while emerging and developing country imports are forecast to grow by 12.5 percent.”
Indeed, imports have continued to grow – a sign that global partners continue to benefit from the 2010 program.
Small Businesses Trade Competitiveness
Supplemental state-level programs promise to give small businesses a competitive edge in the global market. The State Trade and Export Promotion (STEP) in particular addresses the one percent of U.S. small businesses that export overseas and aims to streamline their trade processes through incentives and additional tools.
Specifically, the government will award grants to small businesses intended to give them an edge up in the market. According to U.S. Small Business Administration, “The first round of competitive grants was awarded in September 2011, for performance during the period October 2011 – September 2012. In the first round, SBA awarded 51 grants totaling $29 million. The average value of awards was $568,000.” Awards will be disbursed throughout 2014 as well.
Officials believe the next phase of the NEI will continue to boost U.S. exports; however, the growth is likely dependent on the companies that participate in the program by accepting grants and financing.
Will the U.S. Export Promotion Program affect your business? Is the impact positive or negative? Share your thoughts in the comments below. [/show_to]