Three Steps to Bigger and Better Exports!

There was outright euphoria last week as new data emerged showing that household incomes increased at the fastest rate on record. As Congress stares down the end of session, there are a series of things they can do to make this type of income growth the norm instead of the exception. One major piece to that? Boost exports. Even while lawmakers wait for debate on the Trans-Pacific Partnership to take place in November, there are a series of other actions that can be taken now to increase the sale of American products across the globe.

Before anything, however, let’s all admit we have a problem. We don’t export enough. As we have previously written, of the 40 largest economies, the United States ranks 39th in the share of GDP that comes from exports. Even after eliminating oil exports, which can skew the data for energy-rich countries, the United States only ranks 35th. It’s not for lack of trying; American products face some of the steepest barriers to export in the world in the form of tariffs, quotas, and other obstacles. But the end result is the same—not enough people outside of the United States are buying things made here. This is especially troubling because less exports mean less dollars in workers’ wallets. Exports contribute 18% more to manufacturing workers' wages, so we need to get more Made in the USA products on foreign shelves.

So what do we do?

First, we have to stop hamstringing the Export-Import Bank. This independent agency provides loans, loan guarantees, and insurance to help boost the export of U.S. goods and services. Ex-Im helps businesses finance their exports, but only when private lenders are unable or unwilling to help. And its track record over its eighty-year history is phenomenal. While it supports all businesses, nearly 90% of Ex-Im’s transactions support small businesses. Ex-Im has financed the sale of nearly $300 billion in U.S. exports over the past 7 years, supporting over 1.4 million jobs. Meanwhile, through its operations, Ex-Im has generated nearly $7 billion in net profit, which has been used to reduce American debt.

However, in order to finance transactions of over $10 million, Ex-Im’s Board of Directors needs a quorum of at least three members. There are only two board members now, and two more are awaiting confirmation—one of whom has been held up within the Republican-controlled Senate for months.

According to Ex-Im, there are more than 30 transactions that are in limbo because of this issue. These potential exports are valued at more than $20 billion, and they impact thousands of American jobs and companies. To fix this, the Senate needs to take action on the nomination of Mark McWatters (who is a Republican) to round out Ex-Im’s Board quorum. If that is simply too much to ask for, lawmakers should then change the Bank’s requirements to allow for a smaller quorum—as numerous groups and policymakers on the left and right have called for.

Next, we have to help small and medium-sized businesses who don’t know how to export. The National Small Business Association found that 63% of non-exporting small businesses would be interested in exporting. Why don’t they? The #1 cited reason was they “don’t know much about it and not sure where to start.” The good news is that the U.S. Commercial Service (which is part of the International Trade Administration) is charged with helping small and medium-sized businesses learn how to export and connect them with customers and other business partners overseas. Yet, it is not specifically tasked with finding companies that are not exporting, but might be interested in it, and educating them on the services that they provide. Because of that, only 5% of successful cases for the Commercial Service were with firms that were new to exporting.

To address this, Rep. Cheri Bustos (D-IL) introduced the Boosting America’s Exports Act. This bill, which we highly support, will direct the U.S. Commercial Service to specifically identify and assist non-exporting businesses, provide additional resources to help small and medium-sized businesses access foreign markets, and direct the Undersecretary of International Trade to optimize the locations of domestic offices to improve outreach to businesses. It’s a no-brainer, and Congress should pass it immediately.

Finally, let’s modernize government bureaucracy to make it easier for companies to export. As we have written, there are 20 federal agencies involved in export promotion to some extent, with the vast majority of federal activities spread across nine agencies. The result? A complex and redundant bureaucracy that is tough for a small business owner to navigate.

Rep. Ann McLane Kuster has taken on this problem with the Single Export Agency Act—a commonsense bill that directs the next president to consolidate the largest export promotion programs into a single agency. This streamlined agency will be directed to identify market opportunities abroad for American companies, assist these companies in exporting, and ensure that federal resources are used in an efficient manner. Congress would be smart to move on this quickly.

Eyes are on the future of the Trans-Pacific Partnership for good reason—it’s the most ambitious trade deal the U.S. has ever brokered. But boosting our exports doesn’t start or stop there. While we wait for the TPP, Congress can take these three easy steps and watch exports start to soar, taking household incomes with it.