Exports: Center Stage in U.S. Manufacturing Revival

June 22, 2012
ITA's Perez says Commerce Department working to help ensure manufacturers benefit fully from recent free trade agreements.

When Peter Perez began his career in manufacturing four decades ago, companies had competitors across town or in their own state, but typically not outside the United States.

Now, says Perez, deputy assistant secretary for manufacturing in the Department of Commerce's International Trade Administration, the competition is overseas. As a result, exports are "increasingly important to our economic health and to our growth."

In 2011, U.S. exports totaled a record $2.1 billion and represented more than 50% of the economic growth of the United States, Perez told manufacturers at the "Fast Forward: Strategies for Solving Manufacturers' Most Challenging Problems" conference in Plymouth, Mich. The conference was sponsored by IndustryWeek and the Italian Trade Commission. He said exports supported 10 million jobs in the United States.

In Michigan, for example, exports last year were $51 billion and 93% were manufactured products.

"There were $4,500 of exports for every man, woman and child in this state," Perez noted.

But the United States still lags other countries in terms of how its exports relate to national GDP. While exports represented 13.8% of U.S. GDP in 2011, Perez said, Canada's exports were 30% of its GDP and Germany's exports were 50% of GDP.

"Imagine what our economy and our employment figures would look like if exports were 15% or 20% of our GDP," Perez said.

Promoting Exports

The Obama Administration in 2010 launched the National Export Initiative, which aims to double U.S. exports in five years. Manufacturing accounts for 60% of U.S. exports of goods and services, Perez pointed out. American-made products are "synonomous with quality and value" all over the world, he said.

The foundation of the Commerce Department's trade promotion efforts are its sector market strategies, Perez told manufacturers at the Fast Forward conference. The department has developed strategies for 12 countries, including Brazil, China, India and Mexico, and for 32 sectors, including automobiles, aerospace, chemicals. medical devices and semiconductors.

Perez said the Obama Administration was working to ensure that U.S. companies would be able to take full advantage of recent free trade agreements. He noted that agreements had been reached with Korea in March, Columbia on May 15 and that an agrement with Panama was expected to be finalized before the end of 2012.

For Columbia, the third-largest economy in South America, 80% of consumer industrial products exported there will be duty-free as a result of the free trade agreement, Perez said.

The United States had a $50 billion trade surplus in manufactured goods in 2011 with the 17 countries with which it has free trade agreements, Perez said. That represented a 120% increased from 2010, he noted.

"Free trade agreements are good for America and they are good for manufacturing," he said.

Perez said the administration has launched a New Market Exporter Initiative to encourage U.S. companies to increase the number of countries to which they export. He said 58% of U.S. exporters export to just one country - predominantly Canada or Mexico.

"If we can get these companies to expand their operations and activities and sales to other markets, it will make a huge difference for their bottom line, for their growth, for their employees and their community," Perez said.

Perez said the Commerce Department was working with partners such as the National Associaton of Manufacturers, Federal Express, UPS and DHL to assist their customers with increased exports. The department's Commercial Service, with offices in 70 countries, offers a variety of services to manufacturers to help deal with new markets such as identifying reliable distributors.

"Building it here and selling it everywhere is the formula that will help ensure the United States remains the great economic power in the 21st century," Perez told the audience.

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