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Budget impasse leads to great disappointment

Are we looking at the end of Pennsylvania’s leadership in international trade?

by Harry Zimbler, Editor

Lewisburg – With the state budget crisis still unresolved – and every international trade initiative zeroed out of the senate’s budget – businesses that were interested in accessing foreign markets or building new relationships with overseas partners will have to wait for the opportunity to do so.  The annual international trade meetings – which featured face-to-face meetings with trade experts – have been canceled.

Hundreds of small and medium-sized Pennsylvania companies are now going to lose the opportunity to access the nation’s most comprehensive group of import/export advisors.

Pennsylvania has long prided itself on being the nation’s leader in the promotion of exports and imports.  Twenty-four representatives covering over 60 countries work for Pennsylvania, providing companies with a great deal of support such as trade leads, customer searches, and business information.

“It is a shame that this has happened,” said Noelle Long, director of the Export Development Program for SEDA-COG in Lewisburg.  “It is such a lost opportunity for so many companies. We already had more than 20 groups signed up. We just met with a company that is interested in doing business in Singapore and Vietnam.”

Long explained that her group will continue to arrange conference calls and online meetings. “But it’s not going to be the same as a face-to-face meeting with an in-country trade representative who will provide honest answers about a company’s chances in the international market.”

Over the past five years, hundreds of personal trade relationships have been established at the state’s international meetings. “Often, this is an organization’s entry into the international market. It is truly a great learning experience,” Long said.

Long provided an example of how exporting can be a successful strategy for some companies. One meeting at the international program turned into $6 million in new business.

“In 2008, 45 people attended our Central Pennsylvania International Trade Conference,” said Long. “They represented 33 companies in the region.  There were 120 meetings with trade representatives. Clearly companies in the region are interested in global sales and marketing, and they’re looking for every opportunity that’s out there.  Unfortunately this is one opportunity they won’t have, not until the Governor and General Assembly finalize the state budget.”

Pennsylvania’s trade representatives offer a wide range of export-related business services.  Company officials are given help when they’re overseas.  They’re assisted with international trade shows and provided with guidance on how well their products may sell in specific countries.

“Ours is one of ten International Trade Conferences held across the state,” said Long, “Last year 368 companies participated and took part in over 1,600 one-on-one meetings with the trade representatives ─ a 20 percent increase over the previous year, statewide.”

In 2008, total exports contributed to 7.8 percent of the state’s gross domestic product, up from 6.7 percent in 2007.  Recent figures from the World Institute for Strategic Economic Research showed Pennsylvania exported $34.4 billion worth of goods in 2008 ─ 18 percent more than in 2007 ─ while total U.S. exports increased by 12 percent.

Long said, “Pennsylvania International Week has been a big part of our state’s export success.  In fact it was expanded to 13 days because it’s so popular.”  The event is coordinated through the state’s World Trade PA initiative, which is completely eliminated under the Senate Republicans’ budget proposal.

“Times are tough. But when I tell companies that the event is canceled, they are very disappointed,” Long noted. “This could be devastating. Our international trade missions have zeroes next to them in the budget right now. It’s unsettling. We have the strongest trade presence in the United States but it is hanging by a thread right now. This is going to tarnish our reputation.”

According to Long, business demand for export services is up across the Commonwealth. “We’ve seen it here in Central Pennsylvania.  Foreign trade can play a big part in Pennsylvania’s economic recovery, but only if we continue to encourage and work with companies that are exploring global sales opportunities.”