By Brian E. Clark
For WisBusiness.com
The U.S. economy has improved since a year ago when it was on the “brink of financial collapse, but it’s still not on solid ground yet,” U.S. Rep. Tammy Baldwin, D-Madison, said Tuesday at a seminar on boosting exports from Wisconsin.
“Economic growth depends in part on increasing exports,” she told operators of small and medium-sized businesses who attended the gathering at the UW-Madison School of Business.
Baldwin also lauded President Obama’s recently announced National Export Initiative to add more federal funding and assistance, with the goal of doubling exports over the next five years to support 2 million jobs.
“The federal government wants to help you grow your businesses,” she said.
Fred Hochberg, president of the U.S. Export-Import Bank, also spoke at the conference and told attendees that while this country cannot compete with low-cost producers, it can excel at selling aviation, construction, medical and other high-tech equipment abroad.
“Our competitive advantage is technology and innovation,” he said. “We won’t be the cheapest, but we are often the best.”
And in times of tight credit, he said his agency can help American firms by guaranteeing loans and can “open the spigots” for financing projects by guaranteeing receivables from foreign companies and governments.
Hochberg, who built his mother’s small mail-order company, “Lillian Vernon,” into a direct-marketing giant, said that the bank he heads had financed almost $390 million in exports from 107 Wisconsin companies.
And he said the loans it has guaranteed have soared in recent months because conventional banks have tightened credit. He also noted that Obama has called for the bank to increase the number of loans it finances by 25 percent this year.
During his visit to Wisconsin Tuesday, Hochberg said he stopped by Racine-based Case New Holland. That firm exports 40 percent of the tractors it makes, he said, which means that 200 of its 500 jobs are dependent on shipping equipment abroad.
Hochberg said companies often do not need much help when they export to Canada or Mexico, but he said the Export-Import Bank can provide vital guarantees when firms seek contracts in newer markets.
The banker said 13 percent of the U.S. gross domestic product (GDP) was devoted to exports in 2008. But that figure fell to 11 percent in 2009 as much of the globe dipped into recession.
However, even the 13 percent figure paled in comparison to other industrial powerhouses such as Germany, which exports 47 percent of its GDP. Or India, 25 percent; China, 36 percent and the United Kingdom, 30 percent.
“The U.S. is still the largest (gross) manufacturer in the world, but we are behind China and Germany when it comes to (total) exports,” he said. “So when it comes to exports, we have a lot of room to grow.”
Touching on other subjects, Baldwin said she was not optimistic that a Senate jobs bill would advance. She said hopes that employment legislation that passed the House in December would move forward and attract support of Republicans.
“Time is of the essence,” she said. “We need to focus on job creation. In addition, unemployment insurance for many workers is about to run out.”
On health care reform, she said she hopes a summit that will be hosted by Obama on Feb. 25 will move the issue forward and garner bipartisan support.
“If not, we will proceed by majority rule to get the job done,” she said.
