The Foreign Service Journal, May 2009

26 F O R E I G N S E R V I C E J O U R N A L / M A Y 2 0 0 9 Yet the turbulent economic times present a paradox for U.S. exporters. Although some American firms are exploring export opportunities in new markets more seriously due to the dearth of opportunities in the do- mestic market, many companies struggle with justifying travel costs in the current climate. In fact, many are now opting to do business by e- mail and phone to avoid traveling. Although akin to buying a swimsuit over the Internet, this approach can occasionally reap success: International Trade Specialist Lesa Forbes of theMiami USEACworked with commercial specialist Chamberlain Eke in Lagos to help ER Trucks identify a list of potential distributors in Nigeria. As a result, the company exported more than $150,000 worth of its equipment, clearing its excess inven- tory for these sales. In many countries, however, particularly those with de- veloping economies, face-to-face interaction remains criti- cal to clinch deals. The success rate typically decreases when U.S. company representatives do not meet with po- tential partners. “Especially in the current difficult eco- nomic situation, special efforts are needed to convince companies to test the waters,” Senior Commercial Officer Carmine D’Aloisio explains, referring to his efforts to facil- itate exports to the still-growing Indian market. “We reach U.S. firms through various direct marketing techniques and pinpoint export opportunities, potential partners and, often as importantly, what we can do to help overcome specific market access barriers.” Until the fall of 2008, FCS India was overloaded with requests and demands from American companies, D’Aloisio says. “But nowwe’re strategically targeting com- panies who we feel could compete in the market. For ex- ample, we successfully recruited a 14-company trade mission in the solar sector by focusing on key companies that have niche products that could work in India.” He adds that finding Indian partners is only part of the solution. For the U.S. firms to succeed, FCS also needs to influence the policy and regulatory environment that will allow both Indian and foreign firms to take off. Winning on an Uneven Playing Field Another obstacle for U.S. firms overseas, and a focus for FCS assistance, is competition from local and third-coun- try companies. Local companies al- most always have the home-court advantage. But in addition, some European and Asian countries sub- sidize their companies to undertake trade missions or pursue large infra- structure projects abroad. And alarmingly, many countries do not even come close to adhering to the principles of the U.S. Foreign Cor- rupt Practices Act, which prohibits American firms from giving bribes to win business in for- eign markets. In fact, until a few years ago some European countries allowed their firms to list bribes and other “busi- ness development expenses” as tax deductions. Though U.S. firms decry the uneven playing field these situations present, many have learned to be more innova- tive and cost-effective and to offer the best value for money. Because U.S. government programs — such as guarantees and loans from the U.S. Export-Import Bank or the Over- seas Private Investment Corporation, and training grants from the U.S. Trade and Development Agency — pale in comparison to what other governments offer their firms, FCS assistance is essential to help American companies win contracts in foreign markets. In one case, the Sunnen Products Company headquar- tered in St. Louis utilized counseling and advocacy from FCS offices in St. Louis, Brazil and Italy to compete against its most formidable competitor, a German com- pany, in Brazil. Despite contending with additional tariffs and a local presence (the German company had a plant in Brazil), Sunnen Products was ultimately successful in sell- ing its high-precision honing equipment to an Italian firm in Brazil. Sunnen attests that its exports account for 30 new jobs created in the last five years, in addition to 20 jobs that would have been lost due to a relatively flat U.S. market. In this global business environment, U.S. companies need to undertake a long-term commitment — with lots of patience — for their export strategy. FCS will con- tinue to lead embassy advocacy efforts, finding innova- tive ways to respond to the needs of American companies and enhance exports. Business continues even amid global doom and gloom, and the U.S. & Foreign Com- mercial Service will continue to ensure that U.S. export orders are placed, shipments are sent and American com- panies are paid. ■ F O C U S FCS serves the critical needs of U.S. companies lacking the in-house expertise to begin doing business in foreign markets.