More Trade = New Customers

Wednesday, August 7th, 2013

Editor’s note: This post was authored by Tom Donohue, president and CEO of the U.S. Chamber of Commerce and was originally published on the official blog of the U.S. Chamber, FreeEnterprise.comYou can find the original post here. 

One of the fastest ways to create jobs and grow businesses in the United States is to reach new customers around the world. As U.S. companies scour the globe for consumers, the booming Asia-Pacific region stands out. Over the last two decades, the region’s middle class grew by 2 billion people—and its spending power is greater than ever. U.S. businesses need better access to those lucrative markets and their customers if they’re going to reap the economic benefits.

Although U.S. exports to the Asia-Pacific market increased from 2000 to 2010, America’s share of the region’s imports declined by about 43%—meaning that other countries are stepping up their game. In fact, the growth in U.S. exports to Asia lagged behind overall U.S. export growth in that period.

Why? Many Asia-Pacific countries maintain steep trade barriers against U.S. exports. Nontariff and regulatory obstructions block market access in many countries.

Trade agreements are crafted to overcome these barriers. But what happens if other countries make trade deals among themselves and leave the United States out? The number of trade accords between Asian countries surged from 3 in 2000 to more than 50 in 2011. Some 80 more are in the pipeline. Meanwhile, the United States has just 3 trade agreements in Asia.

The Trans-Pacific Partnership (TPP) is America’s best chance to catch up. Its objective is to achieve a comprehensive, high-standard, and commercially meaningful trade and investment agreement among 11 Asia-Pacific nations, including Japan, Canada, Mexico, Peru, and Chile.

After three years and 18 rounds of talks, negotiators are close to a final agreement. Completing the TPP would pay huge dividends for the United States. A study by the Peterson Institute for International Economics estimates that the trade agreement could boost U.S. exports by $124 billion by 2025, generating hundreds of thousands of American jobs.

The TPP must be comprehensive. In trade talks, whenever one party excludes a given commodity or sector from an agreement, others follow suit, limiting its reach. For the United States to achieve the goal of a true 21st century agreement—with state-of-the-art rules on intellectual property, digital trade, and other key areas—U.S. negotiators must hold fast to the goal of a comprehensive accord.

The TPP could strengthen America’s commercial, strategic, and geopolitical ties across one of the fastest growing and most influential parts of the world. It would be an economic shot in the arm for our nation. And it would send a message to the region and the world that the United States is not going to sit on the sidelines. We’re going to be in on the action.

Utah’s United Kingdom trade mission strengthens local economy

Thursday, July 18th, 2013

Editor’s Note: From the World Trade Center Utah. You can find the original article here

Governor Gary R. Herbert’s United Kingdom Trade Mission concluded July 10, strengthening relationships abroad with companies that grow jobs here at home. The Governor and Utah trade representatives met with leaders from Wells Fargo, Level39, Rio Tinto and other prominent corporations and capital investment groups.

“For Utah companies, larger markets abroad translate into more jobs at home. I’m proud of the work we’ve done these last few days in the United Kingdom” said the Governor. “With Utah’s strong U.K. ties, it is essential we not only maintain current relationships, but build new ones that open more doors in the substantial European market.”

The United Kingdom is the largest market in the world for Utah exports, totaling more than $6 billion in 2012. Zions Bank, Nu Skin, and Energy Solutions, in partnership with World Trade Center Utah and Office of Tourism, sponsored several of the business events in the U.K.

During the trade mission, the Governor met with London & Partners—The Official Promotional Organization for the city of London—where Olympic Officials reviewed the success of their recent games. During that meeting London’s Deputy Mayor, Sir Edward Lister, discussed “Vision 2020,” including future plans for London’s venues.

The Governor spoke at a luncheon of top-tier financial professionals in the United Kingdom’s Wells Fargo building. Governor Herbert’s message included a reflection on Utah’s productive workforce, AAA bond rating, low tax structure, stable regulatory environment and other business-friendly qualities.

Jim Johnston, Europe Middle East and Africa (EMEA) Regional President for Wells Fargo, commented that he not only enjoys conducting business in Utah; he loves Utah’s high quality of life, which includes skiing at Utah’s Alta ski resort.

The Governor also met with Rio Tinto CEO Sam Walsh and discussed Foreign Direct Investment (FDI) in the State. Concluding the evening meeting, he went on to meet with over 200 key business people, educational leaders and friends of Utah during a reception hosted at Sir Paul Judge’s Private Residence. Sir Paul Judge founded the Judge Business School at University of Cambridge and is a good friend of Utah. Utah’s Office of Tourism was also recognized at the reception with approximately 80 guests in attendance.

The United Kingdom is the seventh largest economy in the world at $2.3 trillion, and is Utah’s largest market for exports. As business relationships are strengthened and cultivated through this trade mission, Utah exports to the United Kingdom are expected to rise.

World Trade & Small Business

Thursday, June 20th, 2013

Editor’s Note: This article originally appeared on Free Enterprise.

No priority facing our nation is more important than putting Americans back to work. Nearly 12 million American are unemployed. The United States will need to create 20 million jobs by the year 2020 to replace the jobs lost in the recession and to meet the needs of our growing workforce.

For policymakers in search of solutions, creating a business environment conducive to the success of entrepreneurs and small businesses should be job one. Small and medium-sized enterprises (SMEs) are the principal drivers of U.S. job growth, generating about two thirds of net new jobs, according to the U.S. Small Business Administration.

A focus on trade is a second obvious ingredient for job-creation success. The opportunity to tap dynamic foreign markets has magnetic appeal because foreign markets represent 80 percent of the world’s purchasing power, 92 percent of its economic growth, and 95 percent of its consumers.

In the United States, entrepreneurs and their firms have played a big role in the boom in trade over the past few years. According to the U.S. Department of Commerce, U.S. SMEs continued to expand their share of U.S. merchandise exports to 33 percent in 2011 (latest available data), up from 27 percent in 2002.

According to a May 2013 survey by the National Association of Small Businesses (NASB), more small businesses are exporting today than just three years ago. Furthermore, 63 percent of non-exporters said they would be interested in starting to export their goods and/or services, up from just 43 percent in 2010.

Despite this progress, just one in every 100 U.S. SMEs export. According to the NASB survey, non-exporters said their main barrier to selling internationally is a lack of information and an unclear understanding of where to start. And half of small business exporters report spending a minimum of a few months as well as an average of 8.4 percent of their annual operating revenue preparing to export.

These findings underscore the importance of small business tools and resources for exporting as well as robust Export-Import Bank financing.

Opening International Markets

Eliminating foreign barriers to U.S. exports should be another principal focus of the U.S. government’s efforts to harness trade for the creation of jobs — for both large firms and entrepreneurial startups.

While many believe free-trade agreements only benefit large multinationals, the truth could hardly be more different. Faced with steep tariffs or licensing requirements in a promising foreign market, a multinational corporation can often establish a local affiliate to get past trade barriers or hire lawyers to navigate regulatory red tape. Small businesses have no such luxury.

Consider how the kinds of barriers addressed by free-trade agreements impact entrepreneurs and smaller firms — and how these agreements can open the door to success:

  • Non-tariff barriers are especially harmful to smaller companies because they add to the fixed costs of doing business. A $10,000 permit is a nuisance for a big firm; it can be a show-stopper for a smaller one.
  • With the establishment of clear intellectual property rules, trade agreements protect the innovation and creative content captured in many exports; without them, entrepreneurs run the risk of seeing their innovations ripped off, with no redress available.
  • By opening government procurement markets and ensuring transparency in bidding, trade agreements give international entrepreneurs expanded access to lucrative opportunities. These contracts for roads, schools, and clinics are often too small for multinationals to perform profitably, but they are just the kinds of contracts that smaller construction companies, distance learning companies, and medical equipment companies can fulfill beautifully.

In sum, policymakers should think globally as they consider how to foster a business environment in which entrepreneurship and small business can flourish. Tearing down the barriers that shut out exports is vital for firms of all sizes.

[Video: These three small businesses are thriving because of exports]

April 2013 export numbers surprisingly positive

Wednesday, June 12th, 2013

In the April 2013 Export report from World Trade Center Utah, the Beehive State saw more positive numbers than originally expected.

Despite dropping $31 million in exports from March to April, Utah is still giving a strong export showing. Total exports from Utah in April 2013 totaled more than $1.5 billion, which is quite a bit higher than last April’s total of $1.2 billion. This is the first month this year that came out ahead of its counterpart in 2012.

WTC Utah report noted that the Foreign Trade Division of the U.S. Census Bureau released revised final figures for 2012 that indicated a rise in Utah’s total from $19.11 billion to $19.25 billion.

“I wish it had stayed lower, because it’s going to take a lot of miracles to beat that this year,” said Lew Cramer, president and CEO of WTC Utah. “However, Utah does specialize in exporting miracles.”

Based on data from the U.S. Census Bureau, 60 percent of Utah’s exports were of primary metals in April, or approx. $922 million. There was some uncertainty surrounding primary metal export numbers because of the recent landslide at Kennecott, so the strong number was good news. It nearly matched the March 2013 figures for the industry, just shy of a $7 million difference.

What Utah saw a jump in exporting is transportation equipment (increase of 28 percent since April 2012) and computers and electronics (increase of 20.87 since April 2012). In April, the top five industries exporting from Utah include primary metals, computers and electronics, and chemicals.

Utah’s exports mostly head to Hong Kong, United Kingdom, China, Canada and Thailand. From April 2012 to April 2013, China saw the greatest jump in Utah exports from $174 million to $608 million (increase of 248 percent).

The number of positive revelations that came from the April 2013 Exports report are solid indicators that 2013 will continue Utah’s trend of being a strong and growing export state.

Shutting Ourselves Off From the Global Economy Won’t Protect American Jobs

Friday, May 31st, 2013

Editor’s Note: This article was originally published on Free Enterprise

Those who think we can protect U.S. jobs by turning inward have got it exactly backwards. In fact, we must look beyond U.S. shores and pursue lucrative opportunities in world markets if we’re going to drive stronger growth at home, create more jobs for U.S. workers, and compete in a global economy.

Expanding our reach in the world will allow American businesses to grow. Five percent of global consumers live inside of the United States—the remaining 95% are spread out across the world. Foreign consumers represent 80% of the world’s buying power and 92% of economic growth. We need to go where the customers are.

Existing U.S. jobs and key industries depend on trade. Altogether, trade supports 38 million American jobs—more than one in five. One in three manufacturing jobs depends on exports, and for every three acres of American farmland, one is used to grow food that is exported to a growing, hungry global population.

U.S. small businesses are some of the strongest drivers of trade. More than 97% of the 293,000 U.S. companies that export their products are small and midsize outfits. While large companies account for a majority of exports, small and midsize businesses account for more than one-third of all U.S. merchandise exports.

Trade is also a two-way street. If we say ‘no thanks’ to global partners who wish to import goods and services to our markets, U.S. businesses and consumers will suffer. Imports mean lower prices and more choices for American families as they try to stretch their budgets and for companies seeking raw materials and other inputs. Access to imports boosts the purchasing power of the average American household by about $10,000 annually.

It’s true that the playing field for trade isn’t always level. Many countries slap tariffs on U.S. exports that are ten or twenty times higher than our own, and a web of other barriers often shut out U.S. goods and services. That’s why we must negotiate trade agreements to remove those obstacles. U.S. exports to new free trade agreement (FTA) partners have grown four times faster than U.S. exports globally in the years after they are implemented. The expansion in trade spurred by U.S. FTAs supports more than five million American jobs. And while they represent just 10% of global GDP, America’s 20 FTA partners buy nearly half of U.S. exports.

If we don’t engage in the world, we’ll get left in the dust while our global competitors do more business with each other. The world’s strongest and most dynamic economies are aggressively pursuing their own preferential trade deals. Nearly 100 free trade agreements are under negotiation worldwide. The United States has to be in the game so American workers, farmers, and companies can compete and win in the worldwide economy.

Finally, we must think globally in order to tackle our domestic unemployment crisis. Nearly 12 million Americans are unemployed. We estimate the United States will need to create 20 million jobs by the year 2020 to replace the jobs lost in the recession and to meet the needs of our growing workforce. Trade is one of the fastest, surest ways to meet that challenge.

The business community can play a role in expanding U.S. commerce around the world by pushing a number of trade priorities. We must throw our support behind new trade deals, including the Trans-Pacific Partnership agreement in the booming Asia-Pacific region, the Transatlantic Trade and Investment Pact with Europe, and a Trade in Services Agreement with nearly 50 countries. These and other opportunities would drive growth and job creation here at home. Global trade is not the problem, it’s the solution.

Utah export growth doubles the nation’s

Wednesday, August 15th, 2012

It’s no secret exports have been a bright spot in the Utah economy over the past several years. Exports grew from $13.8 billion in 2010 to nearly $19 billion in 2011, and new numbers show the momentum continues to build.

According to a report by the International Trade Administration, Utah’s exports in the first half of 2012 are up 14 percent from the same period in 2011. From $8.5 billion, this year Utah exported $9.7 billion between January and June. Over the past five years alone, there’s been an overall 142.3 percent growth in Utah merchandise exports. This growth is better than President Barack Obama’s National Export initiative to double exports by 2015 in an effort to create two million jobs nationwide.

Not bad for a landlocked state without a seaport.

Nationally, exports have grown by seven percent in the first half of the year. International exports support high paying jobs and that means the economy is heading in the right direction. What these new statistics also show is that Utah is two-times ahead of the game.

Utah exports metal manufactures, computer and electronic products, chemicals, food, and transportation equipment. Any business, large or small, that produces goods can export them. The Salt Lake Chamber’s strategic partner, the World Trade Center Utah specializes in helping Utah businesses enter profitable global markets.

Not only do international exports bring revenue to Utah businesses–they also create and support more Utah jobs. By getting involved in exports, your business is helping to create jobs. Don’t wait to start exporting!

In January of 2011, the Salt Lake Chamber outlined a 10-point plan called the Utah Jobs Agenda to create 100,000 jobs in 1,000 days. This plan emphasizes the importance of exports and education (among other things) in the creation and support of Utah jobs.

New international partnerships for the Chamber

Thursday, July 12th, 2012

The Salt Lake Chamber has formalized new alliances with the Ural Chamber of Commerce & Industry of Russia and the Sana’a Chamber of Commerce & Industry of the Republic of Yemen. The chambers will actively promote business exchange and cooperation.

Through collaborative efforts, the chambers will strive to promote a global outlook and international understanding to improve relationships, and boost international exchange and business activities that are mutually beneficial.

The Salt Lake Chamber encourages Utah businesses to participate in the global marketplace. Over the past five years, Utah was the only state to double international merchandise exports. In the first quarter of 2012 alone, exports increased 22 percent from the year before, totaling $5.17 billion.

With the help of  World Trade Center Utah and the Chamber, businesses can learn how to engage in international exports. Utah exports mean more high paying Utah jobs.

Russian Business Mission
The World Trade Center Utah will help Utah businesses build relationships with businesses in Russia. WTCU is leading a business mission from Sept. 22 – 27 to uncover business opportunities for Utah-based companies. Businesses that take advantage of this opportunity will build relationships with key business and government figures in Russia, expand their business network and gain a better understanding of business practices in Russia.

The deadline to register for this mission is Aug. 3. For more information, see this flyer or contact Richard at richard@wtcut.com or 801.532.8080.

On July 19, WTCU will also be hosting a “Doing Business in Russia” seminar. It will take place in the World Trade Center building (60 East South Temple, 3rd floor) starting at 8 a.m.

Photo from maistora on Flickr.

How strong would Utah’s economy be if Congress got out of the way?

Friday, June 8th, 2012

Editor’s note: This post was originally published on ksl.com June 6, 2012.

Just two centuries ago, almost anything a person purchased was very likely produced within a modest geographic reach. If you were in business during the early 19th century, everything you made had to be sold close by. There were exceptions, of course, but the world was a relatively large place and reaching much of it was difficult, if not impossible.

That’s not the case anymore. It’s not a paradigm breaking thought to say the world is more interconnected than ever before. That has its upside: you can eat California strawberries in Utah in January, for example. But it also means events across the globe resonate in the economy, right here in Utah.

And if you think that is only a theory, you need to think again.

“There’s a lot of uncertainty on an international level,” says Darin Mellott, sr. analyst at CBRE. “But the story in Utah is quite a contrast to that.”

The Salt Lake Chamber, Utah’s largest and longest-standing business association and CBRE, the world’s largest commercial real estate services firm, released their semi- annual economic outlook for Salt Lake County last week. The outlook shows Utah is outperforming the nation and resilient in the face of international challenges, but both are keeping us from firing on all cylinders.

We live in a highly connected world–economically speaking–and that means issues like the European debt crisis and instability in the Middle East have an impact on the progress of our economy, right here along the Wasatch Front.

There’s not much Utah businesses can do to influence world events, but U.S. politics have done little to address critical issues. Mellott points out politicians continue to kick the can down the road with important issues and consequently, “the risks pile up.”

“The most serious impediment to Utah’s economy is a national economy that can’t seem to find its way,” says Natalie Gochnour, the Salt Lake Chamber’s chief economist. “The greatest challenge the U.S. economy faces is not market dynamics, but policy dynamics.”

Specifically, Mellott and Gochnour list the Bush Tax Cuts, the payroll tax holiday, the emergency unemployment insurance tax cuts and the alternative minimum tax “patch”–all set to expire Dec. 31. They say the economy is not growing at a fast enough rate to absorb the shock of these increases hitting all at once. This adjustment is commonly referred to as the “fiscal cliff.”

“If you look at the tax cuts that expire at the end of the year and spending cuts mandated by last year’s budget compromise it is equivalent to $500 billion annually, that’s about 3.5 percent GDP,” says Mellott. “A slow growing economy can’t handle that kind of sudden impact.”

Closer to home, economists and analysts say the picture in Utah is better. The economy is adding jobs, there’s more optimism among job seekers, sales tax revenue has been positive for the past five quarters, and commercial real estate developers are building–a sign they are optimistic that businesses will be ready, willing and able to occupy the new space when it comes on line.

“The local outlook is considerably brighter,” said Gochnour. “We’ve had stellar economic leadership. We are more fiscally responsible in Utah than any other state. It is no accident Utah’s economy is growing faster than almost other state economy.”

But a state can only hold out for so long. The federal government must address the annual budget deficits and the mounting national debt. As importantly, we must find a way to do it while investing in the areas that will propel the American economy for decades to come.

 

WTC at City Creek gives Utah a global identity

Wednesday, May 30th, 2012

One of the Chamber’s strategic partners now has a new home.

The World Trade Center Utah (WTCU), which had offices in the Chamber for several years, officially has a place of its own, the Eagle Gate Tower which was re-named World Trade Center at City Creek. The new offices will be the home of WTCU, the Governor’s Office of Economic Development (GOED), Utah Science Technology and Research initiative (USTAR) and the Office of Energy Development (OED).

“This new marquee name and the ‘Team Utah’ tenants in this building add global business identity and expertise to our urban community,” said Mark Gibbons, president of City Creek Reserve, Inc.

WTCU President and CEO Lew Cramer says locating all tour entities in the same building will improve collaboration and enable them to better serve Utah’s businesses who are seeking to grow their international presence.

“Our co-location with USTAR, WTC Utah and OED is an opportunity that demonstrates Governor Herbert and the State legislature’s commitment to a forward-looking economic development plan,” said Spencer Eccles, executive director of GOED. “Thanks to that commitment, and some truly inspired collaboration, the private-public partnership of ‘Team Utah’ in the newly renamed World Trade Center at City Creek will continue to support the private sector that is the engine powering Utah’s globally renowned and business friendly environment.”

Thanks to this kind of pro-business environment, Utah consistently ranks high in national and international ratings when it comes to the economy, business and management with awards like Forbes’ “Best State for Business and Careers” and “Most Fiscally Fit State.”

 

Utah’s rising exports and the need for more FTAs

Tuesday, May 15th, 2012

The constant bright spot in a tough economy, Utah exports continued to grow through the first part of 2012.

Utah’s first quarter exports (Jan-March 2012) totaled $5.17 billion—a 22 percent increase from the first quarter of 2011, which saw $4.25 billion in exports.

World Trade Center Utah President and CEO Lew Cramer says this growth is heading forward at a “blistering pace,” setting Utah up to have over $20 billion in total exports for the whole year.

International exports are a big component in the Utah Jobs Agenda, a 10-point plan to create 150,000 jobs in five years. And those billions of dollars in exports translate into more support for both new and existing Utah jobs.

Another bit of good news today is that a Free Trade Agreement between the U.S. and Colombia has now come to fruition. This agreement is expected to increase U.S. GDP by nearly $2.5 billion and U.S. merchandise exports by $1.1 billion.

Free Enterprise from the U.S. Chamber of Commerce notes that “more than 95 percent of the world’s consumers live outside our borders and their demand for American goods and services is growing every day.”

This is why it’s important for all businesses to look into exports and how they can optimize their efforts outside the boundaries of the U.S. You may not think your business has anything worth exporting, but odds are, it does.

The issue that remains is that exports need a monumental kick in order for the U.S. to really see growth and more jobs from it. It’s not just large businesses that can export—any business can become involved, even small firms. If your business needs help entering profitable global markets, contact the World Trade Center Utah.