nasbite trade capacity building for nafta

8/6/2019 NASBITE Trade Capacity Building for NAFTA

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Trade Capacity Building for NAFTA:Trade Capacity Building for NAFTA:

Helping Small Businesses AchieveHelping Small Businesses Achieve

Better OutcomesBetter OutcomesProfessor Steve JennerProfessor Steve JennerCollege of Business AdministrationCollege of Business Administration

& Public Policy& Public Policy

California State UniversityCalifornia State UniversityDominguez HillsDominguez HillsEE--mail:mail: [email protected]@csudh.edu


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Outcomes vs InputsOutcomes vs Inputs

DESIRED OUTCOMES:DESIRED OUTCOMES:

exporter business performance:exporter business performance:

sales growthsales growthLongevityLongevity

jobs/retentionjobs/retention

distributors/agents USDOCdistributors/agents USDOC

additional countriesadditional countries

INPUTS:INPUTS:

Workshops, seminars, conferences, consulting,Workshops, seminars, conferences, consulting,websites, grants for trade showswebsites, grants for trade shows


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Actual vs potentialActual vs potential

226,000 exporters226,000 exporters

Potential 7 millionPotential 7 million 26 million total26 million total


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Success StoriesSuccess Stories

Faces of TradeFaces of Trade www.traderoots.orgwww.traderoots.org

3 Case Studies by Prof. Jenner:3 Case Studies by Prof. Jenner:

Air Power in MexicoAir Power in Mexico

Engineering ServicesEngineering Services

Pulse Engineering ClinicPulse Engineering Clinic


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SME Exports 2005 $ billionSME Exports 2005 $ billion

International Trade Admin.International Trade Admin.

24% NAFTA = $64 billion24% NAFTA = $64 billion

29%Mexico = $33

29%Mexico = $33

21% Canada = $3121% Canada = $31

46% CAFTA = $746% CAFTA = $7

74% Nicaragua = $ .474% Nicaragua = $ .451% Guatemala = $ 151% Guatemala = $ 1


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Need for StrongerNeed for Stronger

National AdvocacyNational Advocacy Small Business Exporters AssociationSmall Business Exporters Association

US Chamber of CommerceUS Chamber of Commerce Congressional CommitteeCongressional Committee


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Resistance to AssistanceResistance to Assistance

Small business managers fearSmall business managers fearinternational trade due to theirinternational trade due to their

misperception of risks:misperception of risks:foreign language necessaryforeign language necessary

financial risksfinancial risks

no attorney, marketingno attorney, marketingincreased costs ex) freightincreased costs ex) freight

Richard Ginsburg SBARichard Ginsburg SBA


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SBDC surveysSBDC surveys

Prof. George Solomon GWUProf. George Solomon GWU


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US Dept. of CommerceUS Dept. of Commerce

www.tradeagreements.govwww.tradeagreements.gov

Alliances with eBay FedX UPSAlliances with eBay FedX UPS

New Basic Guide to ExportingNew Basic Guide to Exporting

Intl Trade Advisory CommitteeIntl Trade Advisory Committee

ITAC11

small and minorityITAC11

small and minoritybusinessbusiness


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Seamless Service ProcessSeamless Service Process

Maurice Kogons modelMaurice Kogons model

Best Market Reports for 17 industriesBest Market Reports for 17 industriesprepared by studentsprepared by students


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Practitioners and EducatorsPractitioners and Educators

working togetherworking together Identify the most promising industryIdentify the most promising industry

sectorssectors

Identify specific small businesses inIdentify specific small businesses inthose sectorsthose sectors

Show them how they can win exportShow them how they can win export

salessales Provide success stories by following upProvide success stories by following up

with service providerswith service providers


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Reframe NAFTA DebateReframe NAFTA Debate

How to make it work for smallHow to make it work for smallbusiness exports given devaluationbusiness exports given devaluation

US$ and reduced tariffs (Offense)US$ and reduced tariffs (Offense)

versusversus

How to reduce competition on theHow to reduce competition on the

basis of labor and environmentalbasis of labor and environmentalstandards (Defense)standards (Defense)


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NAFTA ControversyNAFTA Controversy

NAFTA increased the aggregate tradeNAFTA increased the aggregate tradeand investment flows between theand investment flows between the

U.S., Canada and Mexico, but manyU.S., Canada and Mexico, but manyobservers believe that the benefits didobservers believe that the benefits didnot reach small businesses.not reach small businesses.


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NAFTA helped otherNAFTA helped other

countries morecountries more Most people in the United States,Most people in the United States,

Canada, and Mexico believe thatCanada, and Mexico believe that

NAFTA produced better results for theNAFTA produced better results for theother trade partnersother trade partners

Our country lost more than it gainedOur country lost more than it gained

compared to our trading partnerscompared to our trading partnerswithin NAFTA and that Some of ourwithin NAFTA and that Some of ourpeople were harmedpeople were harmed


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3Research Questions3Research Questions

1.1. What can be done to attract moreWhat can be done to attract moreindividuals, especially minorityindividuals, especially minority

entrepreneurs, to grow small businessesentrepreneurs, to grow small businessesthat take advantage of NAFTA?that take advantage of NAFTA?

2.2. What do these individuals need to knowWhat do these individuals need to knowabout NAFTA and trade and investmentabout NAFTA and trade and investment

from the micro (firm) perspective?from the micro (firm) perspective?3.3. How well are their needs currently beingHow well are their needs currently beingmet? What are the deficiencies in terms ofmet? What are the deficiencies in terms ofmeeting their needs?meeting their needs?


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Results of a 2007 surveyResults of a 2007 survey

of expertsof experts Small business managers needSmall business managers need

relevant training and consulting asrelevant training and consulting as

well as microwell as micro--loans for exportloans for exportmarketing and transaction creditmarketing and transaction creditguaranteesguarantees

Offer incentives for small businessesOffer incentives for small businessesto exhibit at international trade showsto exhibit at international trade shows


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DeficienciesDeficiencies

How and where to export to MexicoHow and where to export to Mexicoand Canadaand Canada

How to deliver the goodsHow to deliver the goods

How to apply their financial skillsHow to apply their financial skills(fiscal responsibility, budgets, getting(fiscal responsibility, budgets, getting

paid)paid)


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More DeficienciesMore Deficiencies

Lack of knowledge of export controlsLack of knowledge of export controlsand quality compliance standardsand quality compliance standards

(ISO/EU Certification)(ISO/EU Certification)


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Center for InternationalCenter for International

Trade Development (CITD)Trade Development (CITD)According to Maurice Kogon, Director of theAccording to Maurice Kogon, Director of the

Torrance CITD, 80 percent of U.S. firms doTorrance CITD, 80 percent of U.S. firms donot export because they lack threenot export because they lack threefundamentals:fundamentals:

1.1. the ability to produce a competitivethe ability to produce a competitiveproduct,product,

2.2. sound entrepreneurial practicessound entrepreneurial practices

(operations management and basic(operations management and basicsurvival skills), andsurvival skills), and3.3. the knowledge of how and where tothe knowledge of how and where to

export.export.


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User cars to MexicoUser cars to Mexico

Monday March 10, 2008 only 1998Monday March 10, 2008 only 1998cars allowedcars allowed

No tariffsNo tariffs


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Other sectorsOther sectors

Export services logistics legal acctExport services logistics legal acct

AerospaceAerospace

Agriculture and Food processingAgriculture and Food processing

MilitaryMilitary

ManufacturersManufacturersApparelApparel

nasbite trade capacity building for nafta

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