Time is right for export opportunities in West Michigan

January 17, 2012
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For companies that are at least three years old and showing a strong balance sheet, but have yet to test the international waters, here’s a message: Get in the game.

Over the past decade, Michigan’s export sales have been in the top 10 states of the nation, according to U.S. Census Bureau data. Now more than ever, it is easier to reach customers around the world. There are approximately 16,000 small and medium-size enterprises in Michigan currently diversifying their customer base by growing sales outside U.S. borders, where 95 percent of the world’s customers reside. In 2008, U.S. exports represented approximately 13 percent of the nation’s gross domestic product and supported more than 10 million U.S. jobs. If your business has been established for the last three years and is showing a strong balance sheet, then you may be at a point to consider sales to foreign markets.

According to the International Trade Administration, in 2010, nearly 41 percent of U.S. exports of goods went to countries where free trade agreements were in place. So, a good starting point may be as close as Michigan’s northern border, Canada, where approximately 50 percent of the state’s current exports are going and the NAFTA agreement is in place. Often, Foreign Trade Agreements reduce the cost of entry and allow exporters to even the playing field or gain a competitive edge.

The U.S. has 12 current FTAs established with 17 countries. The most recent FTAs were passed in October 2011 — with South Korea, Panama and Colombia — and are currently undergoing the process of implementation. The U.S. also is negotiating a new regional FTA, called The Trans-Pacific Partnership, with Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

In addition to FTAs, the exchange rate of the U.S. dollar may be another factor for opportunities for foreign sales growth for Michigan businesses. Many consumers around the world now are able to afford and secure financing to purchase U.S.-made goods and services. Machinery and capital equipment used throughout the world are in high demand, as well as advanced technology and services.

Resources at the federal and state levels recently have been deployed to directly support the National Export Initiative announced in January 2010, with the goal of doubling U.S. exports in five years and adding 2 million jobs to the U.S. economy. To reach this ambitious goal, U.S. exports must expand from $1.57 trillion in 2009 to $3.14 trillion by 2015. There are five areas focused on through the NEI:

**Educating U.S. businesses about sales opportunities outside U.S. borders and assisting businesses to connect with foreign customers;

**Improving access to credit, particularly for those small and medium-size businesses (having 500 or fewer global employees) that are looking to start and/or grow export sales;

**Improving enforcement of international trade laws that prevent U.S. companies from gaining free and fair access to markets outside the U.S.;

**Improving advocacy and trade promotion efforts on behalf of U.S. exporters; and

**Pursuing policies at a global level to promote strong, sustainable and balanced growth.

In 2011, the U.S. Small Business Administration announced a national pilot program to support the NEI called State Trade and Export Promotion, which provides $30 million annually for up to three years, targeting export growth for small and medium-size enterprises. Michigan received $1.5 million in SBA funding through the STEP pilot program, which will be administered statewide by the Michigan Economic Development Corp. Businesses that qualify for assistance and have fewer than 500 employees may receive export assistance to develop and increase export-related activities in line with the NEI goals. Michigan is ready to foster job creation by increasing the state’s export sales, increasing the number of businesses that export, and introducing existing exporters to new foreign markets and buyers.

Grand Valley State University’s Van Andel Global Trade Center, with its 12 years of helping Michigan businesses grow internationally, was selected by MEDC to host the West Michigan Region Export Network for the state’s STEP program, overseeing a 20-county region. Growing exports to international markets and helping businesses create jobs and diversify risk is something the center understands and has been involved with daily.

The STEP funds will cover 50 percent of out-of-pocket costs incurred by eligible businesses for export marketing activities, to a maximum of $25,000. Examples of activities that would qualify for STEP reimbursement include overseas trade missions, overseas trade show participation and language translation for marketing materials.

Each business qualifying for STEP reimbursement will receive an “export readiness” assessment, a customized export road map, and will be tracked to evaluate progress under the STEP program.

For more information on STEP, visit www.michiganadvantage.org/STEP or contact GVSU’s Van Andel Global Trade Center at (616) 331-6811.

Sonja Johnson is the executive director of the Van Andel Global Trade Center, Seidman College of Business, Grand Valley State University.

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