WWD Magic Preview: Textiles Key to National Export Initiative

The Obama administration says it is on track to achieving its goal of doubling exports by 2015.

President Obama promoted the National Export Initiative during his State of the Union address in January.

WASHINGTON — The Obama administration says it is on track to achieving its goal of doubling exports by 2015 and that it has the evidence to back it up — a new report to Congress showing significant increases in U.S. exports and the programs promoting them.

This story first appeared in the August 9, 2011 issue of WWD.  Subscribe Today.

President Obama has said in two State of the Union speeches that he has a goal of doubling exports in the next five years, which would mean exports would need to grow to $3.14 trillion by 2015 from $1.57 trillion in 2009, when it was launched. It’s an ambitious plan, dubbed the National Export Initiative, particularly in an economic slowdown with companies cutting back on expansions, but the administration has developed a comprehensive, multiagency initiative it claims will accomplish the goal.

Part of the plan relies on opening new markets for U.S. exports and passing three pending trade agreements with Colombia, Panama and South Korea that have stalled in Congress. But the government is also counting on an array of industries to help fuel the export surge it hopes to arise as a result of its efforts, and textile and apparel exports will play a part.

The domestic textile industry has helped boost the overall goods and services export numbers and is a big focus of the Obama administration’s broader export goal. Textile exports increased 20 percent to $15.2 billion in 2010 compared with 2009.

Apparel production the U.S. has shrunk precipitously in the last quarter century, and apparel exports, which stood at $4.5 billion in 2010, consist of a combination of piece goods that are sent to different countries for assembly, as well as finished apparel, according to the Commerce Department’s Office of Textiles & Apparel.

Obama’s broader National Export Initiative dovetails with the Sourcing in the Americas Summit and pavilion at Sourcing at Magic this month, where the U.S. Department of Commerce and U.S. Trade Representative’s Office are working with American and international industry groups. They are staging a gathering that’s expected to draw hundreds of brands, retailers and domestic and foreign suppliers to discuss building supply chain partnerships and expanding production, imports and exports in the Western Hemisphere.

“If we can focus in on the textile industry, where 60 percent of all U.S. [production] is exported within the Western Hemisphere, with most of that going to NAFTA and CAFTA countries, our initiative is very important to us,” said Francisco Sánchez, undersecretary for international trade at the Commerce Department, who will give a keynote address and participate in a panel discussion at the summit.

Last year, the Obama administration created an Export Promotion Cabinet and the Trade Promotion Coordinating Committee that includes 20 federal agencies to develop recommendations and an action plan for meeting its goal. In September, the committee made 70 recommendations to the White House, outlining areas where it could bolster interagency coordination, streamline resources, lower trade barriers and find new markets for U.S. exports.

Administration officials, who unveiled the “National Export Strategy” report in late June, said in a press call that exports of all goods and services increased 17 percent to $1.84 trillion in 2010, while overall exports this year through April also increased nearly 17 percent.

“It was the largest year-to-year increase in 20 years,” said Courtney Gregoire, executive director of the National Export Initiative. “We surpassed the needed annual rate growth of 14.9 percent to achieve the National Export Initiative in that year.”

But federal officials are aware that a lot more needs to be done to prod and assist companies into exporting their products, which is why the Obama administration has made collaboration with states, metropolitan areas and border communities a priority area this year. Metropolitan areas produce 84 percent of the country’s exports and 100 of the largest metro areas account for more than 64 percent of overall exports. Gregoire said only 1 percent of U.S. companies currently export and of those 58 percent export to just one foreign market.

“We are looking at how to leverage our existing resources and better partner with states,” she said. “We want to make sure we are tapping every available resource.”

An intense focus last year by the interagency committee tasked with meeting the president’s national export goal paid off, according to the report. Nearly 5,000 U.S. companies exhibited in U.S. pavilions in 2010 sponsored by the Commerce and Agriculture Departments at 110 foreign trade shows, which resulted in an estimated $1 billion in sales, according to the report. For the first time, the Ex-Im Bank and Small Business Administration attended some overseas trade shows, where they presented financing options to U.S. exhibitors and potential foreign buyers.

The Commerce Department said it has seen a 30 percent increase in foreign attendees to U.S. trade shows due to additional resources for marketing its International Buyer Program to overseas buyers. The committee has also identified Colombia, Indonesia, Saudi Arabia, South Africa, Turkey and Vietnam as priority “next tier” markets, a group of countries “having high growth rates, favorable business climates and the opportunity for large incremental gains for U.S. exporters.”

The federal government sponsored five trade missions to these markets in 2010, including two to Saudi Arabia and one each to South Africa, Colombia and Indonesia. For 2011, ITA has six trade missions planned, including two energy missions to Turkey, an information and communication technology mission to Saudi Arabia and an education mission to Vietnam and Indonesia.