Monthly Article

September 2014 Monthly Article – Undersecretary Selig Interview

I recently had the opportunity to chat with newly-appointed Undersecretary of Commerce for International Trade Stefan Selig, who is in charge of the International Trade Administration (ITA). This is the primary agency within the Department of Commerce that focuses on the competitiveness of American industry, job creation and the promotion of exports. Selig serves directly under Commerce Secretary Penny Pritzker.
Q: How does ITA help small businesses?
Selig: ITA has a number of programs to assist SME’s (small- and medium-sized enterprises) entering into foreign markets. We have over a hundred U.S. Export Assistance Centers, including one led by my colleague Bob Queen here in El Paso, which covers west Texas and New Mexico. These centers work to customize export strategies and solutions for individual companies to select markets in line with their requirements. We have a cadre of trade specialists and commercial officers that coordinate with colleagues in over 70 foreign markets to complete that mission every day, and even in those markets where we don’t have personnel we coordinate with colleagues in the State Department to reach an additional 22 markets.
Q: Are there any specific areas in Mexico that ITA sees as being very promising, perhaps what Mexico has been doing from a policy standpoint with its energy industry?
Selig: The reforms that Mexico has recently adopted in its energy industry are historic, and are going to create extraordinary opportunities for U.S. companies to invest in that country, where they were historically precluded from doing so. However, it is not just energy but a whole host of industries. The Mexican economy is growing quickly. It is large and critical as an export destination for all of our industries.
Q: Apart from Mexico, are there other emerging markets or hot markets that you encourage companies interested in exporting to investigate?
Selig: The “look south” initiative that Commerce unveiled last year focuses on opportunities in the economies of Central and South America, which are growing well in excess of global averages. Many of those markets historically have not been markets that U.S. companies think of exporting to. In November I will lead a trade mission in renewable energy to Peru, whose economy is growing more than seven percent annually, and represents a real opportunity for U.S. companies. A lot of these markets are smaller markets, and in many respects are even more fertile for our SME’s because they are not big enough to really have the attention of larger companies. These include Costa Rica, the Dominican Republic, and Colombia, which is the fifth largest economy in the region.
Q: There’s been a lot of focus on China during the last 15 years. Are there any other Asian markets that could be interesting for small businesses?
Selig: China is a very large trade partner for us and will continue to be so. It represents real export opportunities for our companies. We are engaged in the negotiation of the Transpacific Partnership (TPP), which covers many of those Asian economies, and so whether it is Japan, Vietnam or others, there are a lot of opportunities that will be expanded if we are able to get TPP done. Those economies represent such a huge part of global GDP that ignoring them is doing so at our own peril. The TPP economies represent almost 800 million consumers, and just under 40 percent of global GDP. More than 44 percent of our exports currently go to those countries, representing $700 billion dollars and supporting about three million U.S. jobs. Countries in the TPP are critical to meeting our export objectives.
Q: Do you see a shift in attitude in American politics and industry as to the proliferation of more trade agreements such as TPP?
Selig: Large companies in the U.S. have understood the power of globalization for years, and SME’s are now seeing the importance of exporting and trade. We’ve had four straight years of record exports. Last year, exports totaled $2.3 trillion dollars and supported over 11 million U.S jobs, the highest number it’s been in 20 years. Folks are much more aware of the power of exporting on the one hand, and on the other hand there is still this huge untapped opportunity. Less than one percent of all U.S. businesses currently export, and of those that do, roughly 60 percent export to only one market – usually to border countries, Canada and Mexico. More than 80 percent of global economic growth during the next five years is going to take place outside of the U.S., and it is critical that we get more companies to understand the opportunities that exist outside of our borders.