Created on June 24, 2015
Free trade agreements make it easier and cheaper for U.S. companies to export their products and services to trading partner markets. By reducing trade barriers and creating a more stable and transparent trading and investment environment, it is easier and cheaper for U.S. companies to export their products and services to trading partner markets. Currently, the U.S. has free trade agreements with 20 countries. Last year 44 percent of U.S. goods exports went to FTA partner countries and supported 3.2 million jobs.1
Why is this important? The U.S. has only five percent of the world’s consumers. With the remaining 95 percent living outside of the U.S., exports are vital to our economic stability and employment. The U.S. is currently negotiating a free trade agreement, the Trans-Pacific Partnership, with Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Jobs supported by exports to these countries increased by over 500,000 since 2009.
Minority business owners possess unique advantages in the global marketplace: superior cultural knowledge and language skills; existing family relationships that allow access to critical market intelligence; intimate knowledge of local commercial/business culture, and general comfort with operating in a global environment. As the U.S. seeks to remain globally competitive, engaging minority-owned businesses is no longer a moral or civic imperative—it is an economic necessity.2
The Minority Business Development Agency supports the growth of minority business enterprises (MBEs) by providing and identifying export assistance and opportunities, and working with federal partners such as the International Trade Administration’s U.S. Export Assistance Councils, the Export- Import Bank, and others. In fiscal year 2014, MBDA client exports neared $710 million in contracts (a 1,635 percent increase from fiscal year 2013) and $74 million in export financing. Client exports also supported the creation and retention of 1,087 jobs.
Let’s put those figures into perspective. In fiscal year 2014, MBDA client transactions (contracts and capital) totaled over $6.9 billion—a $2.1 billion increase (45 percent) over the prior year. Nearly 40 percent of that increase is from export transactions. These results can be attributed to three things:
- The Obama Administration’s focus on international markets as strategy for business growth and job creation and subsequently, MBDA’s long-term strategy for MBE growth;
- Export training for MBDA Business Center staff; and
- MBDA’s partnership with the Ex-Im Bank, which enabled nine MBDA Business Centers staff members to become authorized agents for Ex-Im’s Global Express and able to approve loans of up to $500,000.
Manufacturing was the top industry sector for client exports at $626 million; followed by Services at $47 million.
By exporting goods and services, MBEs of every size are growing in size, scale, and impact — that means hiring more employees, paying higher wages, and sustaining growth within communities at home and abroad.
Consider exports as part of your company’s growth strategy. It may not be as difficult as you think. Contact an MBDA Business Center today.
1 U.S. Department of Commerce, International Trade Administration, Office of Trade and Economic Analysis. Jobs Supported by Export Destination 2014. Retrieved from: http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_005478.pdf on June 23, 2015.
Posted at 10:29 AM