REPORT OF INTERAGENCY EXPORT PROMOTION TASK FORCE

A NATIONAL PROGRAM TO EXPAND UNITED STATES EXPORTS The program is the result of several months intensive survey and study by the Executive Branch of current trade problems and attractive overseas sales opportunities. Reports and suggestions were received from authorities on trade in the private sector and from government officials at home and abroad.

The Interagency Task Force under whose direction the program was developed consists of the following members: Under Secretary of Commerce, Chairman; Director of the Bureau of the Budget; Under Secretary of State; Under Secretary of the Treasury; Chairman of the Council of Economic Advisers; Chairman of the Council on Foreign Economic Policy; and, President of the Export-Import Bank.

In addition, other interested departments and agencies of the Executive Branch were consulted. The detailed research and planning together with recommendations for action were developed for the Task Force by an Interagency Steering Committee, with the Assistant Secretary of Commerce for International Affairs as Chairman.

To the extent possible parts of the program have already been put into effect. In order to make further progress toward a fully effective program as rapidly as possible, however, a supplementary appropriation request will be forthcoming.

The program recognizes that business development is essentially the responsibility of private enterprise.

With this in mind, the Executive Branch has consulted with a broad cross-section of the United States business community. Moreover, it is proposed that there be established a compact organizing group of business leaders to plan and promote an export drive by business, to enlist the active support of existing national and local business groups, to find sectors in which better results can be obtained, to assist and encourage business groups abroad, and to develop an organizational structure adequate for these purposes.

Fundamentals of the Program

Progress toward the achievement of an expansion of United States exports in growing world markets is dependent on vigorous, imaginative and enthusiastic undertakings at home and abroad. United States business and industry must bear the principal responsibility for a more vigorous and effective commercial effort but, at the same time, the United States Government can and should encourage private enterprise to undertake the effort and provide facilities and services to promote their success in the national interest.

Our studies and field reports clearly show that additional U.S. Government efforts in the export promotion field can be fully effective only if private enterprise can be stimulated to take a much more active interest in the export field. It is believed that the recommendations in this report collectively provide real hope for the future

and represent a course of action which should be initiated

now.

The following are the fundamentals:

1. The Executive Branch will give priority to the promotion of U.S. exports as being in the national interest. A sense of urgency, national purpose and dedication of intellectual and physical resources to this end is required. The Departments of Commerce and State will accord this program high priority.

2. An integrated export promotion drive, at home and abroad, would be initiated immediately and developed as rapidly as possible.

a. The Department of Commerce would undertake to stimulate the interest of U.S. business in export trade through a variety of vigorous promotion programs. To achieve a major increase in exports, firms new to the trade and those already exporting should be made aware of the value of export markets, the importance of expanded exports to the national growth of the United States and of the facilities made available by the Government to assist them. United States businessmen should be so stimulated and oriented toward foreign market opportunities. Particular attention would be paid to the needs of medium-sized and smaller business firms.

b. The Department of Commerce would improve and expand its export trade services. Included in this proposed improvement and expansion are: The preparation and dissemination of foreign market surveys on a specific product and country basis; improved techniques for dissemination of trade opportunity leads, analysis of major competitive weaknesses of U.S. exports, information on foreign economic and trade conditions and practical advice designed to help American firms get into the export business; and increased efforts to improve personal contact with American businessmen through domestic field offices. A significant increase in Department of Commerce personnel will be required to carry out these functions.

c. The Department of State would establish a vigorous re-emphasis upon trade promotional activity on the part of the Foreign Service. Greater efforts would be devoted to assisting U.S. business to find and compete for export markets. To this end, Commercial Officers have been directed to travel more widely in their area of assignment, give more personal attention to visiting businessmen, attend bid openings to the extent practicable, and encourage use of U.S. standards and specifications.

d. The Department of State would effect significant expansion in the number of Commercial Officers and staff assigned to export promotion work as required. Such expansion would be kept in balance with development of the program in the United States, domestic facilities for dissemination of Foreign Service reports and the increasing demands for services abroad. Personnel for this program would be recruited among experienced businessmen, the present Foreign Service, and younger men and women wishing to qualify for a Foreign Service

career.

e. The Export-Import Bank would provide export guaranties of noncommercial risks for short term transactions. Additionally, the Bank will undertake the ex

pansion and improvement of existing credit and compre hensive guaranty facilities for medium-term export transactions. These new facilities are needed to facilitate an expansion of U.S. exports and will be supplementary to and will not compete with private banking institutions. The details of the new program are to be announced by the Bank.

f. The Department of Agriculture would expand its agricultural trade promotion activities to increase the sale of farm products abroad.

3. Promotion of travel to the United States will be given additional emphasis.

Background

The revival of free world industrial strength, particularly in Western Europe and Japan and the increase in the participation of these nations in the world's commerce, together with necessary expenditures abroad to meet the national security and foreign policy objectives of the United States, have resulted in a large deficit in the U.S. balance of payments.

It is now U.S. policy to bring the balance of payments situation into “reasonable equilibrium”, and possible corrective action is being explored on many fronts. It seems highly improbable that our present balance of payments deficit can be reduced to an acceptable level without an energetic and sustained export drive by private enterprise, with the help of the U.S. Government.

These circumstances present a new challenge to U.S. interest in international trade. The economies of the industrially advanced countries have not only recovered but have reached unprecedented heights. Increasingly, their products have entered the international market in competition with those of the United States. Further, recently intensified efforts to encourage greater trade liberalization by countries abroad have had a salutary effect.

If the U.S. is to maintain and increase its exports in growing world markets, it is in the U.S. interest to embark upon a national program to increase our trade. Foreign policy, fiscal policy, and business reasons require, in our national interest, that we place high priority on selling United States products and services abroad. In this way U.S. business can be encouraged to meet this increasing competition and to take advantage of new export opportunities now arising as a result of the general elimination of trade and currency restrictions on American products. The encouragement of tourist traffic to the United States is of similar importance.

It is to this end that the Executive Branch of the Government has developed a program for Government action to assist in the expansion of U.S. exports which will enable the Government to fulfill its responsibility in this respect to American business and industry and to the nation as a whole.

The principal burden of preparation and implementation of this program devolves upon the Departments of Commerce and State.

The program calls for joint efforts at home and abroad and requires an integrated and coordinated effort. The program will be initiated immediately, first efforts di

rected toward major markets having convertible currencies, and continued on a sustained basis over the longer term.

Bearing in mind the consequences of our export efforts upon friendly countries, the proposed program has been designed to:

1. Maintain the United States position as a leader in the promotion of mutually beneficial international trade; 2. Strengthen the balance of payments position of the United States to assure its continued ability to purchase supplies from abroad;

3. Extend the benefits of trade to the American people generally, by stimulating in U.S. industry an increased interest in export trade;

4. Assure for American industry the full opportunity to share in the expanding market in the industrially developed countries of the free world;

5. Increase private U.S. business participation in the economies of less developed countries, and thus assist these countries in their development efforts;

6. Enable U.S. business, both large and small, to increase their sales abroad and thereby add to the growth of the economy.

As presently constituted the Government's services to business are designed primarily to provide information relating to domestic and foreign trade and to facilitate commerce. Activities have been primarily factual, analytical, and of a service character rather than advisory with respect to foreign commerce. Resources have been inadequate to permit the undertaking of programs designed primarily to enable U.S. industry to enter into competition for export markets. The Government's role has been primarily one of facilitation.

The U.S. will continue to press for trade liberalization actions by other governments. It is expected that the U.S. program to increase the number of countries with which it has Treaties of Friendship, Commerce and Navigation will also serve to influence favorably the position of the American exporters.

Description of Program

The purpose of this section is to present the Task Force's conclusions as to the major features of the program and how the program should be launched and carried into effect. Detailed budget justifications for the supplemental appropriations required for the full development of the program are being prepared and will be submitted to the Congress in the normal manner.

1. Utilization of Present Resources

The Task Force concludes that the importance of the export program requires maximum effort in the use of existing resources of the Department of State and of the Department of Commerce so that the program would not be unduly delayed until new funds might be appropriated. To this end a number of steps have already been taken or are in the process of being put into effect.

Until additional funds become available these efforts should produce a number of tangible benefits to United States exporters. It is the opinion of the Task Force that

the recasting of existing programs is of great importance but that this alone cannot provide resources necessary for an effective export program of the magnitude envisaged.

2. Stimulating Business Interest in Export Markets

In order better to alert U.S. industry to the opportunities for profitable business in foreign markets, extensive efforts to stimulate interest in exports should be undertaken throughout the country immediately.

This calls for careful planning so that the promotional work can be undertaken in those cities of the United States where goods are produced that are likely to prove attractive for marketing abroad. Contact with U.S. business already is indicating the types of services by the Department of Commerce and the Foreign Service of greatest value in expanding trade.

The stimulation of business interest in exports is a day-to-day function of the Department of Commerce. The export program contemplates that additional direction and support will be given to such efforts, and that primary emphasis would be placed on personal contacts between the staff of the Department and businessmen and trade association leaders.

To the maximum degree possible business, trade groups, banks, Chambers of Commerce, etc., will be urged and equipped to point out the opportunities in foreign trade and otherwise to play an increasingly important role in the national export program.

3. Improving Trade Services

Improvement in U.S. Government trade services for U.S. business involves three main lines of effort-(a) better quality, greater depth, and more specific detail of a practical character on a product basis; (b) wider dissemination of trade leads, together with greater "pinpointing" of opportunities for U.S. firms likely to be able to use the leads; and (c) increased output of the Foreign Service in terms of trade leads developed, representational efforts to be undertaken on behalf of U.S. business, and related services to assist active foreign sales efforts by U.S. business.

4. Foreign Service Trade Promotion Activity

The program envisaged by this report calls for an expansion of Foreign Service commercial activity and an increase in the effectiveness of existing activities. Foreign Service Officers engaged in commercial activity will work in close and frequent association with business, trade and industrial groups, as well as with similar officials of other governments.

5. Increased Participation in Trade Fairs and Trade Missions

Past experience has demonstrated that U.S. participation, both by private industry and Government, in trade

fairs and trade missions can have immediate and practical results as a means of stimulating U.S. exports.

Greater emphasis, however, now will be placed upon the promotion of United States exports than has been the case in the past. With additional emphasis on followup efforts to assure exploitation of trade leads generated by trade fairs and trade missions, the results in terms of new business should be further enhanced. An expanded trade fair and trade missions program will be a significant factor in a successful export drive. Trade fair participation by the U.S. Government therefore would be progressively increased and the number of trade missions would be expanded.

6. Pilot U.S. Trade Centers

There would be established on a pilot basis, two permanent type U.S. trade centers to operate as an intensified extension of the Foreign Service commercial activities: one to be located in an industrially advanced country; the other in a less developed country. The exhibit operation would be under the direct management of the Department of Commerce exhibit manager, and provide a means of displaying U.S. products on a continuing basis. This is designed to provide an ever-varied display of U.S. products of interest to potential foreign customers.

7. Improving Overseas Commercial Facilities

With a view to improving the trade promotional advantages of commercial libraries and reading rooms at posts abroad, it is proposed that they will be better equipped, better staffed, and better located where needed so as to serve business.

8. Expanding Promotion of Travel to the United States Increased emphasis would be placed upon promoting travel to the United States, with programs and materials being prepared in the United States and increased activity undertaken at home and abroad to forward the program. A detailed program is being prepared by the Interagency Travel Committee.

9. Supporting Activities

The export program being recommended herein by the Task Force has taken into account the need for improved supporting services, such as recruiting and training of new Commercial Officers to be assigned overseas and Department of Commerce trade specialists to serve in Washington and the field offices in the United States. These services would be phased in accordance with the substantive requirements of the programs they are de signed to serve. Present Department of Commerce and Foreign Service personnel would be given training to supplement their background and knowledge relating to trade promotion. Improved communications between overseas posts and the Commerce Department have been planned and already partially put into effect.

U. S. GOVERNMENT PRINTING OFFICE: 1960 O-522149/91)