The middle class is growing quickly in regions such as Southeast Asia, Sub-Saharan Africa and South America, and consumers in those markets want the goods and services that U.S. businesses have to offer.
This foreign demand is helping American families gain economic security. As U.S. Secretary of Commerce Penny Pritzker said recently, “while we cannot control the ups and downs of the global economy, we can and must remain vigilant to maximize the potential of every American company that wants to grow, hire, and compete through exporting.”
In 2013, New Mexico businesses exported $2.7 billion in products to world destinations. These exports are an economic engine for the region and reflect the state’s diversity, infrastructure and entrepreneurial prowess. However, many New Mexico businesses have yet to explore their export potential.
More than 80 percent of the world’s purchasing power is found outside U.S. borders. If a business is only selling domestically, it’s leaving money on the table. Many would-be exporters put off exploring overseas sales because they believe exporting is burdensome, their business is too small, or they may not be aware of available export assistance.
The reality is that during the last few years, exporting has become more viable: The combination of the Internet, improved logistics and transportation options and more free trade agreements has helped turn even the smallest companies into proactive exporters.
If a company has a good track record of selling in the U.S., they’re likely a good candidate for making international sales. In fact, small and medium-sized businesses employing fewer than 500 persons account for 98 percent of U.S. exporting companies.
There’s also great opportunity for current U.S. exporters to expand their sales to new countries. Nationally, 58 percent of all U.S. exporters sell to only one market. For instance, a company that exports only to Mexico should explore other markets in Latin America, where the U.S. has many free trade agreements.
Altogether, the United States now has 14 free trade agreements in force with 20 countries. Exports to these 20 countries represented nearly half of all U.S. goods exported in 2013.
In 2010, President Obama launched the National Export Initiative to help U.S. companies increase exports, expand into new markets, and compete globally. Since 2009, nationwide exports have increased by $700 billion, reaching an all-time high of $2.3 trillion in 2013, and supporting 11.3 million jobs. During this same period, New Mexico merchandise exports have increased by 114 percent. That’s good news, but there’s much more to be done.
Based on four years of input from the business community, the Obama Administration recently launched NEI/NEXT, which aims to:
- Connect more American businesses to their next global customer;
- Make American businesses’ next international shipment easier and less expensive;
- Expand access for American businesses to finance their next export transaction;
- Promote exports and investment as the next economic development priority for American communities; and
- Create, foster, and ensure the next global opportunity for American businesses.
Through the NEI portfolio, the International Trade Administration’s U.S. Commercial Service and its U.S. Government partner agencies such as the U.S. Export-Import Bank and Small Business Administration have dramatically stepped up the availability of export financing, providing businesses with every incentive to expand their exporting efforts.
Exporting can be rewarding and challenging, but the key to success is having a long-term commitment and doing the required “homework” by developing an export strategy and seeking relevant assistance. By doing so, companies will greatly enhance the chances of taking their business to the next level — offering them economic stability and growth, and the possibility of creating new jobs right here in New Mexico.
U.S. Commercial Service is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration.