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Q&A With Israel Hernandez

U.S. Commercial Service Helps Exporters Find Markets

U.S. plastics manufacturers looking to export can tap the services of the Department of Commerce''s U.S. Commercial Service, located within the Commerce Department''s International Trade Administration (ITA). Israel Hernandez, assistant secretary for trade promotion and director general of the U.S. Commercial Service, recently discussed these export services.

Q: Could you outline the mission of the Commercial Service?

A: The U.S. Commercial Service helps U.S. companies export and protects American business interests abroad. We have offices in 108 U.S. cities and nearly 150 posts at U.S. embassies and consulates in 80 countries, so we are well-connected and have key industry contacts. We assist a variety of plastics technologies companies, and the Commercial Service also anchors several different ITA industry teams of importance to the plastics industry-including automotive, aerospace, manufacturing, information and communications technologies, energy, and others.

Q: What kind of services and expertise does the Commercial Service offer U.S. Plastics Technologies Firms?

A: We provide an array of services, including export counseling, market entry strategies, market research, international partner searches, pre-arranged business appointments, trade events, advocacy, and more. The Commercial Service also has a presence at the multi-lateral development banks in Washington and overseas. In addition, our colleagues in Commerce''s Washington-based staff in ITA''s Office of Manufacturing and Services are an excellent resource for market information and industry analysis, and have key plastics-related contacts within the various trade agencies. They also represent the interests of the U.S. plastics industry in trade policy development and manage Department of Commerce programs aimed at enhancing the U.S. industry''s competitiveness overseas.

Smaller companies find these services cost-effective, which is very important because their resources are often limited. Altogether, Commerce has an excellent understanding of the top markets, import requirements and regulations, and has key contacts in the industry. We also assist companies with financing questions in engaging the Small Business Administration and the Export-Import Bank of the United States.

Q: Why the focus on small-and medium-sized companies?

A: They have tremendous export potential. Ninety-seven percent of all U.S. exporters are small and medium-sized firms, but this group only accounts for a small share of total U.S. goods'' exports. Of companies that do export, two-thirds of them only sell to one market.

Many smaller companies don''t have the internal resources to "go-it-alone" when it comes to exporting, and are often not aware of U.S. Government services available to help them do so. In other cases, business owners may think exporting is too much of a burden, or are just too busy to look into exporting. The Commercial Service can help a company become a successful exporter and tap these immense sales opportunities by introducing them to key overseas buyers and helping navigate the exporting process. About 90% of Commercial Service clients are small-and medium-sized firms, and the vast majority of these have less than 100 employees. We''re seeing growth in the minority-owned businesses sector as well, with highly educated entrepreneurs who are bringing a global perspective to their business. When it comes to exporting, the key to success is having the long-term commitment by the company''s top management.

Q: Why should plastics technologies companies consider exporting if they aren''t already?

A: Ninety-five percent of the world''s consumers are outside of the United States, and that means a lot of purchasing power in many key markets worldwide. Small and medium-sized U.S. plastics technologies firms especially should consider exporting. In today''s global economy, if your company is not exporting, your competitors likely will be or already are. Exporting allows U.S. firms to diversify their portfolios in the marketplace, and to grow and compete.

American plastics technologies firms have a strong competitive worldwide niche when it comes to adopting new materials and processes as well as product development and cost-reducing techniques. There are many countries that have a real demand for plastics and plastics-related technologies, including in the developing world where infrastructure investment is growing to keep pace with expanding population and industry demands.U.S. plastics technologies are highly regarded in the world marketplace and there is always demand for cutting-edge products and services.

Commercial Specialists at U.S. embassies and consulates overseas track projects and can help plastics technologies firms position themselves in the market; and industry analysts in the Office of Manufacturing and Services can help U.S. exporters in defining markets to export.

Q: What are some of the issues faced by plastics technologies companies looking to export, and how does the team assist them?

A: Some of the biggest challenges companies face in international markets involve finding qualified distributors/partners, understanding regulatory requirements, and addressing financing. Our domestic and international colleagues can greatly assist companies with identifying qualified distributors and partners. This is crucial. A company that chooses the wrong business partner can spend years trying to rectify the situation and losing, in the process, valuable time in gaining market share. Our staff also assess market regulations and assist companies in understanding how these may impact their business. Tracking and bidding on foreign government projects may present further challenges, and U.S. companies can benefit from advocacy assistance by our Advocacy Center to well-position themselves in these government tenders.

The Commerce Department also offers various marketing and promotion opportunities through trade missions and trade shows. For example, the Commercial Service can customize programs for your company through such services as our Single Company Promotion, in which you can provide technical presentations of your firm before a pre-screened buyer audience.

Barriers to trade also include the divergent standards and regulatory practices abroad such as redundant testing, lack of transparency, and unnecessarily restrictive technical regulations. The Commerce Department can assist U.S. companies in resolving foreign import approval, licensing and regulatory issues, and can provide information about U.S. export controls.

Financing is also a large impediment for many small and medium-sized U.S. manufacturers of plastics technology, and many may not have the capital to invest in new machinery or technological innovations. As mentioned earlier, the Commercial Service works closely with different financing agencies such as the Ex-Im Bank and the Small Business Administration.

Q: Can you give a couple of examples of Plastics Industry outreach?

A: One of our key areas of assistance to the plastics technologies firms is trade shows. For example, the Commercial Service has a strong relationship with the the Society of Plastics Industry and will again be participating in its NPE 2006-International Plastics Showcase in Chicago (June 19-23, 2006). We will coordinate and accompany numerous international buyer delegations as part of our International Buyer Program. Our Commercial Specialists recruit these delegations through U.S. embassies and consulates abroad and bring them to the show to meet American exhibitors. Through our Marketplace program, exhibitors will have several opportunities to talk with Commercial Specialists from our international network. Together, they will explore export opportunities and discuss the latest market information on their respective countries. At past NPE shows, these efforts have led to numerous export successes and tens of thousands of dollars in U.S. export sales. The show will also include a U.S. Export Pavilion where exhibitors can get firsthand information on programs and services of the U.S. Commercial Service, Ex-Im Bank, Small Business Administration, Census Bureau, and the National Customs Brokers & Forwarders Association of America. You can visit us at the International Business Center during the show.

Another large plastics trade event is the K'' Show-considered the world''s largest international fair for plastics materials and machinery-held every third year in Düsseldorf, Germany. At the 2004 show, the Commercial Service hosted two U.S. pavilions and provided direct marketing support to more than 120 U.S. companies. Through our Showcase Global program initiated by our Dusseldorf post, 10 Commercial Service posts throughout Europe and other regions promoted U.S. exhibitors'' product offerings among buyers and distributors in their countries and invited them to meet with U.S. firms at the show. The U.S. exhibitors received individual counseling, information on the plastics market in 20 countries, and exposure on Commercial Service posts'' websites. Altogether, these efforts led to multiple export successes for participating U.S. firms with more sales leads pending with a potential value of several million dollars.

The Commerce Department also recruits plastics companies for participation in trade missions, including the Secretary of Commerce''s Dominican Republic-Central American Free Trade Agreement (CAFTA) trade mission to Central America last fall.

Q: How much does it cost a U.S. firm to use the services of the U.S. Commercial Service?

A: There is no charge for basic export counseling or project advocacy support. Our other services are provided on a cost-recovery basis.

For more information on U.S. Commercial Service export programs and services, visit www.export.gov or call 1-800-USA-TRADe

For more information on the Office of Manufacturing and Services, visit www.ita.doc.gov/td/td_home/tdhome.html

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