Dear globalluxe, You are dead on target. In fact you stole the words right out of my mouth. I was merely being polite by not spelling it out. I have of recent taken on a new client, and I'm working at finding them export markets. Though I do not want to go into a detailed description for fear of sounding like I'm slagging my clients, I agree with your inference a 100%, and must admit that I have noticed a lot of fear, confusion, uncertainty and indecisiveness on the parts of my prospective clients. Most of them are reluctant to venture out into the world. Once again, I am inclined to agree that the present group of Federal employees manning the Export Hot-Lines, or any of the Export Assistance for that matter, are not the most suitable. ....and yes they should be employing people with a passion to get U.S. companies 'out there'. There's a fair bit of hand-holding involved here, and not just giving them leads. They should perhaps open up the Export Department to Non-Citizens, as well.

this isn't a simple issue, but I think that two of the major factors are: 1. Price driven vs value driver consumer culture. Price is king at the moment and if a consumer can buy a product thats imported but is 20% cheaper than a US manufactured one they will take the cheaper option more often than not. The simple fact that it's US made isn't a big enough factor in the consumer mind, especially when they are watching every dollar - like now. It may be that the US manufactured product is of a higher quality, has a longer warranty or better after sales service/support, but people generally buy for what they need now, and aren't thinking about 2 years down the track. they figure that if it breaks down they'll just get another new one then - technology will probably have evolved by then anyway. 2. Cost of labour: The only reason that manufacturing moves to foreign producers is because it's dramatically cheaper. So much so that it's more affordable to build a whole new factory in a foreign contry and shift all the necessary equipment there, and also train up a new labour force, than it is to continue with current US operations. There may be start up costs but these are quickly recouped. Foreign governments often provide a tax free period as well as encouragement to move production and stimulate their labour market. These reduced costs can then be translated to cheaper prioces on the shelf, and a competitive edge in the market which feeds back into point one. There isn't a simple solution to this, but one possiblility is to look at employment requirements and benefits provisions required by employers in the USA. If some of these can be devolved, such as provision of health insurance/dental cover or whatever it can translate into cheaper labour costs and therefore lower costs of production overall removing incentives to shift production. Of course this raises the question of who then pays for this - does the employee have to fund this themselves on their existing pay rate? Not a workable solution. Some sort of governement intervention in the health insurance markets may be a partial solution as it effectively spreads the cost among all tax payers rather than any one in particular. Say for example that the govt. sets a flat subsidy of 35% of your health insurance costs, and sets a control measure in the form of a max annual premium increase of x%/year unless an expemtion is obtained? Again this is a clunky option but it could provide a starting ground to work from. The other traditional option has been to impose tarrifs on overseas goods to inflate prices and remove incentives in that way. This type of artificial sheltering of markets is however the polar opposite of free trade and encourages insular thinking and an expectation that the government will shelter you from competition - ultimately this is self destructive as it leads to stagnation and removes complacency. As I said initially this is a complex issue, but it essentially comes down to this: In a competitive envirnment, players will seek any advantage they can, especially where price is concerned. A competitive environment encourages this in fact. If this can be achieved by moving production (and jobs with it) overseas, why shouldn't a manufacturer do so?

Dear mrhelpful Thank you for the rather long and well thought out reply to my post. Your reasoning and explanations, about the 'why' manufacturing has been outsourced, is sound. The question I asked about the 'why' was mostly a rhetorical question, and was meant to encourage the reader to think about the issue, and maybe even instigate them into action, i.e. get up and do something about manufacturing more stuff for EXPORT, thereby reviving the market for exports in this country. However, your obvious passion for supporting our country and the reasons why things may have happened is good stuff. Wish you all the best in all your endeavors. George

Thanks George. I think that US exporters will need to pick their markets carefully if they want to be sucessful on an international playing field. Given that costs of prodcution are higher in the US than in other countries, and the US dollar has traditionally been a very dominant currency, it's possible - even easy - for other competitors to undercut American exporters and win the price battle. With price being such as significant factor in the current climate I think US exporters have an uphill battle ahead of them, although this is helped by the $ being weaker than it's traditional levels, hence a more favourable currency conversion for foreign buyers. This doesn't mean that US exporters can't compete sucessfully - they can and do - but I think that the markets best suited to US exporters are either those where costs of prodction are very low due to automation of production (low labour costs) and abundance of necessary resources at low prices, or alternatively at the high end scale of the market for luxury goods (where price sensitivity is less of a factor), specialist products (which can't be manufactured in other countries lacking the facilities or expertise) or quality focued industries where the American reputation for reliability and dependability justify the increased price and the market is willing to pay for it. What exact industries fall into these categories isn't my area of expertise at all, it's simply an observation and opinion on my part. I'd be interested in your opinions George, what would you recommend as a good expoert industry for an emerging exporter?

Don't you think that all of the restrictions the government puts on businesses is a big reason why more are into the export part of business?

No we dont think that, just in the world there are too many competitors that can make better products and more cheap. Like China, India, Germany, etc

Thank you all, for your comments. Yes, competition in the world has indeed gone up, and will always be on the rise in the years to come. Can they make products 'better' than the USA? Evidently, yes. ....and I think the only reason this has been possible is 'cause of a failed 'capitalist' philosophy. We talk about free markets, open competition, and 'land of opportunity'.......but all this would only make sense if we behaved in an ethical manner, and strove to excel and be the best in every field, without making profitability, our central theme. So, a reason why other countries can make it better than the USA, is precisely because greed overtook, and infected the minds of our largest manufacturing industries. This is visible in the automobile, equipment, and electronics industry. Take Germany as an example. They have been manufacturing the Mercedes Benz for almost as long as the car manufacturers in the USA, but their brand image and market share has only increased, over the years. What is the reason for that?? The truth is we do not have an answer to this question as USA, unlike any other country, has access to the best R&D in the world, most funding for new enterprise and technology, and until recently had enjoyed the highest seat of economic and political power in the world. If we did not have the brains within the country, we would import them from Russia, Germany, India, and across the Globe. Are other countries able to manufacture consumer items, cheaper than the USA? Yes, because of the high cost of living and wages in the USA. However, this does not mean that USA cannot be competitive in specialist products, equipment and services. We can find ways to carve out a niche for ourselves in areas where, utilizing our access to technology and other advantages, we can come up with unique products and services, for which the markets are not still not overcrowded. This is mostly the basis on which our present president, Barrack Obama, is pushing new technologies, and innovative products and services, in the green energy sectors, bio-engineering, fuel efficient cars. I have of late been working on providing sourcing support and consultancy services to a buyer in South East Asia for specialist under water coating systems for marine applications, by finding him manufacturers from the USA. Cheers! George

You are right! US company cant compete not because of quality but mainly because of price. US safety lawis one of the most strict when it comes to quality. I know for a fact that some US company who still export their product have outsource the manufacturing of their product parts to third world country, like China, Indonesia, Philippines and etc. While maintaning the assembly in the US for quality purposes.but with the resent blow in the economy they are now doing assembly in other country as well, mainly to minimize production cost(or tax). Is this greed? I doubt it is, I think it is mainly the law of nature which is the survival of the fittest. True, U.S. can market new technology and innovation but would it stop them from outsourcing it to third world country ? I doubt it, as you said the US have a high standard of living and high salary. So they should view a timeline of 3 years at max for the ROI (return of investment) for any investment they put in a new technology. You may ask why? because that is the time needed for other country to notice, copy and perfect the said productas well as produce themand ofcourse offer them at a lower price. So it is worth it for US company to focus on export ? For big company yes. but for middle and small company they are better off taking the reseller path.

Hi George, I honestly think a big part of the reason American businesses are not focused enough on exports is because of fear. Fear of the different culture, different language, different way of doing business, etc. You would be shocked at how many companies I contact, telling them I have a foreign buyer for their products say 'We don't have plans to sell internationally at this time.' Another problem I see is that while the US government says they promote exports, the people who work on the export hotlines are not friendly and don't provide the basic assistance that a new exporter will need. We need to get some people in there who are truly passionate about exports and have the patience to hand someone through the process.

I've been exporting small numbers of my products internationally, for a number of years.Strictly because of its proximity Canada became my primary export target! Most of my export-sales have been,(not by choice) ONLY atthe Retail-Level. Other than relatively small,'word-of-mouth' or directInternet-Sales made to individuals; I reallyhaven't been able to get theexporting side of my small-businessoff the ground.Focus has nothing to do with it! I learned that all theSporting-Goods Retail-Stores in Canada, aresupplied (under binding-contract), with one ofthe three major Canadian distributors; and can faceseparation fromtheir supply-line, if they make purchases from entities other than their distributor. With all the interestthe Canadian-Retailers had shown in my products & prices; I didn't think I'd have any trouble at all, going through their distributors, and putting my products on their shelves. Boy was I wrong! It was suggested I go tomy State Export Officefor assistance; and I did justthat! Even with the assistance of an in-country repfromthe Export Office, acting on my behalf,asmy 'manufacturer's representative'; the distributorsrefused tocarry my products.(no reason wasevergiven) Five other small US fishing-lure manufacturers; tried using the influence of their own distributors (who directly interceded on their behalf, with the Canadian distributors), and they still they ran into that same 'stonewall'! We were later informed by the USTrade Compliance Center; that acting as individual owners,each distributor had the 'personal right of refusal' and were in no way,Limiting Trade, as we had suggested they might be. Go figure! Ayear ago, three of the six of us (allin the mid-west), began receiving calls from our retail customers in Canada; asking about the'duty-taxes' they were paying when their orders were delivered. Wecame to the conclusion thatthe fees were either a PST (Provincial Sales Tax) or a GST (Goods & ServicesTax).No one could find out which of them,the added-on chargeswere actually for. In June, Iacted as point-man forour group,and sent an email to theUSInternational Trade Administration's, Trade Compliance Center; and asked them what the feesour customers were paying, actually were. Six follow-up emails (1 e/o week), resulted in promises of an answer, but no actual answer, from the ITA/TCC. Yesterday, I wrote to,and received an immediatereply from, the Ontario, Dept. of Revenue. They informed me that the fees being charged were an HST (Harmonized Sales Tax) a combination GST & PST value-added tax, levied on the declared-value of the package at customs (according tothe Harmonized Code(s),given on the customs documents). BUT:Article 305 in the NAFTA document, Specifically EXEMPTS:US-Made artificial fishing lures (identified byits correct Harmonized Code) from all duties, taxes, &/or tariffs;IF, shippedfrom the USA; to end-users in the Canada, or Mexico... To add insult to injury: later yesterday, Ifinally received an emailanswer fromthe ITA/TCC;that said: 'according to their 'Canada Experts' the fees being charged,were probably aGST' and were allowable. YouJUST KNOW how wellthat email went over! I've finally come to realize, that FOCUS has nothing at all to do with exporting, forANYsmallAmerican manufacturer! Why should we waste our time? With the total lack ofprofessionalismdemonstrated by theemployeesinthe governmental offices overseeing our international trade; it's totallyimpossible forANY small-business ownertoEVER consider having a 'level playing field', whenhe or sheattempts toexport US-Made products.