Klobuchar renews call to increase U.S. exports abroad

WASHINGTON, D.C. – In a speech on the Senate floor [Mar. 15], U.S. Senator Amy Klobuchar called for the passage the Export Promotion Act of 2010 and the Travel Restriction Reform and Export Enhancement Act of 2010.  In her remarks, Klobuchar discussed how the legislation will connect businesses with export promotion resources to allow them to expand into new markets and increase their bottom lines.  Klobuchar cited that more than 95 percent of the world’s customers are located outside the United States, and recently, 30 percent of U.S. businesses indicated that they would be interested in exporting but did not know where to begin.

Senator Amy Klobuchar

Klobuchar is the Chairman of the Senate Commerce Subcommittee on Competitiveness, Innovation and Export Promotion.  Last October, she held a subcommittee hearing that examined the federal government’s efforts to promote U.S. products overseas.  Over the past six months, Klobuchar has held summits across Minnesota that examined how federal agencies can best help small and medium-sized businesses enter foreign markets.  In her speech, Klobuchar highlighted three Minnesota small businesses that have successfully expanded their businesses abroad, including Mattracks, Inc. in Karlstad, Akkerman, Inc. in Brownsdale, and Epicurean, Inc. in Duluth.

Full text of Senator Klobuchar’s speech as prepared for the floor:

Mr. President, I ask unanimous consent to speak for up to 10 minutes.  You know, we’ve been talking a lot about the economy lately.  Just this week we successfully passed a long-term extension of tax credits that will provide relief to small businesses, protect unemployed workers, and help create jobs.  

Today, I’d like to take a few minutes to discuss two bi-partisan bills I recently introduced that I hope will promote American innovation, encourage exports, and create jobs. The first one is called the Export Promotion Act of 2010, and the second is the Travel Restriction Reform and Export Enhancement Act of 2010.

Export promotion is topic is of special interest to me, because I serve on the Senate Commerce Committee – and I chair the Subcommittee on Competitiveness, Innovation and Export Promotion. The Export Promotion Act is cosponsored by my Ranking Member and good friend on that Subcommittee, Senator George LeMieux, and by Senators Shaheen and Wyden, who also take an active interest in export promotion.

We have an important national interest in promoting exports.  Access to new markets can make the difference between expansion and stagnation of a new and developing business. The President recognizes this, which is why he called for a doubling of American exports over the next five years.

One way to do this is to take the opportunity to open a new market to American products. A bi-partisan bill I introduced with Senator Enzi of Wyoming, would do just that. The bill makes it easier for American farmers to export agricultural products to Cuba (currently a closed market) by relaxing the restrictions on financial transactions between the two countries and by making it easier for American farmers to travel there to promote their products.

Another way to promote American products is to make sure that businesses know about all potential export opportunities available to them.

Currently, the United States derives the smallest percentage of our GDP from exports compared to other major countries.  America has always been “the world’s customer,” buying our way to huge trade deficits.

But it’s clear that exports will be increasingly important to our economy as people in China, India and other developing countries gain more purchasing power – and they become our potential customers.

Right now, more than 95 percent of the world’s customers are located outside the United States.  So, it only makes sense to reach out.  

More exports will mean more business … more jobs … and more growth for the American economy. 

Exports are also important for small businesses for several reasons.  First, and most obviously, exports allow a company to increase its sales and grow its business.

Second, a diversified base of customers helps a business weather the economic ups and downs. Also, according to research, businesses that export grow 1.3 percent faster – and they’re nearly 8.5 percent more likely to stay in business than companies that don’t export.

In addition, the annual job growth rate of exporting companies has traditionally been 2 to 4 percentage points higher than their non-exporting counterparts.
And these jobs pay 13 to 18 percent more, on average than non-export related employment.

So, there is a world of opportunity out there – and it’s worth it for our businesses to go out and seize the opportunities.

But fewer than one percent of all American businesses export overseas.  And of those that do, nearly 60 percent sell their products to only one foreign country, typically Canada or Mexico.

Of those firms that don’t export overseas, 30 percent have indicated that they would consider exporting if they had more information about how to do it.

For these American businesses, the world looks like one of those ancient maps that contains only the outlines of the continents and a few coastline features.  But the rest of it is a blank space of vast, unknown and unexplored territory.

They know something’s there.  They know that accessing those markets will help them expand their profits, open new facilities, and hire more people. But they don’t really know how to find out about opportunities. Fortunately, there is help available.

There are a number of federal programs – through the Small Business Administration, the Commerce Department, and the Export-Import Bank – that assist US companies in promoting their products abroad. They have expertise and experience to help small businesses navigate their way into these export markets, sometimes even matching up companies and markets like a trade-related Match.com.

Companies in my state have used these resources to great success.  Now, we all know about big companies like Cargill and 3M that do a lot of international business.  But there are plenty of small and mid-sized companies doing business overseas – and there are plenty more who could.

For the past few months I’ve traveled around the state to work with our innovative small businesses that are creating new jobs and holding their own in a tough economy.

In Duluth, there’s Epicurean, a company that makes commercial and home kitchen cutting surfaces.  With 40 employees, it has customers in 45 countries.

I invited Epicurean’s owner, Dave Benson, to join me for this year’s State of the Union address.

In the northwest Minnesota town of Karlstad (population 900 and the Moose Capital of Minnesota), there’s a company called Mattracks. 

It manufactures rubber track systems for converting tire-equipped vehicles into track-equipped all-terrain vehicles.  The business was inspired by the founder’s young son, who had drawn a picture of a truck with tank tracks instead of tires.

Mattracks now sells its products in more than 50 countries – and half of its business comes from international sales.  You could say that Mattracks does business everywhere from Karlstad to Kazakhstan. Meanwhile, the company has gone from 6 jobs to more than 40.

Another example is Akkerman in Austin, Minnesota.  They have a family business where they do trenchless digging.  They have machinery that pushes major steel pipes underground and can dig trenches without digging up the landscape.  Now they have expanded their business to India where this work is in demand.  By accessing these foreign markets, many businesses expand products, open new facilities and hire more people. The problem is that small businesses don't know how to find these opportunities.

Our bill focuses on expanding the Commerce Department programs that helped these companies get the word out. It does three major things. First, it expands the scope of existing Department of Commerce programs that help American small businesses commercialize and manufacture new technologies for export abroad.

Second, it increases the number of officials at the Department of Commerce responsible for identifying new export opportunities abroad and matching those markets with American companies with products to export.

For the past few years, the program that specializes in matching small businesses with potential export markets has not replaced retiring officials, losing roughly 200 officials since 2004 – even as demand for the assistance continues to increase. The bill will restore staffing levels in this program to their 2004 levels, making sure there are as many people as possible that can help get the word out about American innovations.

Finally, the legislation will expand the Commerce Department’s Rural Export Initiative (REI) to ensure that small and medium-sized businesses located in rural areas know about all available export promotion services. In 2006 alone, the REI helped rural American businesses generate over [US$]183 million in exports with an investment of [US$]860,000 – a return of approximately [US$]213 on each dollar.

The ability to envision creative new products, then develop them, commercialize them, and sell them, has been part of the American dream as long as there has been an American dream. That spirit of innovation has gotten us everything from the post-it note to the pacemaker.

As we continue to fight through the this economic crisis, it’s important to keep the end game in mind – an end game where the United States is again the world leader in job creation, by virtue of developing and selling the world’s most innovative products. This bill helps us get there.