Economic Integration

A report on the National Export Initiative (NEI), an ambitious plan aimed at doubling US exports, as well as adding supporting jobs in the next five years, has been given to President Barack Obama.

It outlines ways the federal government can expand efforts to help US businesses win more foreign government contracts, find buyers worldwide, participate in more trade missions and trade shows, receive more export financing, and learn new ways to sell products and services overseas.  

A statement issued by the White House notes that the NEI, focuses on five areas that include: access to credit, particularly for small and midsize firms; greater trade advocacy and export promotion efforts; removal of barriers to the sale of US goods and services abroad; enforcement of trade rules; and pursuit of policies that will increase global economic growth to create a strong worldwide market for US goods and services. 

Key recommendations in the full report, according to the White House, include:  

Small and Medium-Sized Enterprises (SMEs):  a National Outreach Campaign led by the SBA and other Trade Promotion Coordinating Committee (TPCC) agencies to raise awareness of export opportunities and government export assistance for U.S. small and midsize companies; a re-launch of the website, www.export.gov, the government’s export internet portal, with new export training opportunities to help companies learn how they can begin selling their products overseas or break into new markets if they’re already exporting.

Federal Export Assistance:  bring more international buyers to US trade shows and encourage more U.S. companies to participate in major international trade shows . For the first time, implement a government-wide export promotion strategy for six newly designated “next tier” markets (Colombia, Indonesia, Saudi Arabia, South Africa, Turkey and Vietnam).

Trade Missions: substantially increase the number of trade missions abroad, particularly those led by senior US government officials, and foreign buyer trade missions to the United States.

Commercial Advocacy: level the playing field for companies bidding on projects abroad through improved coordination among government export promotion programs; formalize a path to escalate, for the first time ever, critical advocacy projects for direct White House and National Economic Council involvement where necessary.

Increasing Export Credit:  extend more export credit through existing trade finance agencies, increase awareness of credit products, focus on SMEs and companies from underserved sectors of the U.S. economy, expand the eligibility criteria for SME export finance lending, and streamline the application and review process for SME exporters.  

The full report is HERE.

Questions:  Which of the five recommendations above has the potential to improve demand for US export products quickest?

Which of the five has the potential to ensure a sustained demand over the longer term?

What other recommendations might be made to broaden demand for US export products over a prolonged period?

A stable cotton area, a more competitive ginning and spinning infrastructure and improved cotton quality are among China’s long-term goals, according to government officials speaking at the Zhengzhou Agricultural Futures (cotton) Forum in Zhengzhou.  

In its September 17th weekly issue, Liverpool-based Cotton Outlook reported that more than 700 delegates from the cotton and textile industry attended the meeting that started on September 10.  Central and provincial government officials, as well as representatives from other sectors were among the speakers.

Cotton Outlook reported:

“Mr. Liu Xiaonan, Deputy Director of the NDRC’s Economic Trade Department gave a speech on the subject of establishing a long-term mechanism for the cotton industry. He pointed out that China’s cotton output has remained at around, or over, seven million tonnes in recent years but that cotton consumption has continued to rise, thanks to the rapid development of the textile industry. Currently, he stated, China has a total of 110 million spindles. The speaker alluded to the prospect of an increasing shortage of cotton supply in the coming years, a gap that will have to be met from the international market.

He highlighted challenges facing the industry. Firstly, to maintain stable cotton area and output will be quite difficult. Despite prices having moved to historically high levels, this year’s cotton area has remained similar to last year, owing to competition from other crops, especially grains, which generate better returns. Cotton cultivation requires more labour and, in the absence of sufficient mechanisation, production costs are high. Secondly, the competitiveness of smaller ginners and mills requires strengthening; they still lack knowledge regarding risk management. Thirdly, certain issues related to cotton fibre quality have not been resolved and may increase in a tightened supply situation. Fourthly, industry statistics require improvement; otherwise, formulation of a long- term government policy that protects farmers’ interests will prove difficult.

Mr Liu noted that grains remain China’s most important crops. The place of cotton should be clarified within the wider commodity market, and the relationship between cotton and other crops, as well as that of cotton and the downstream industry should be balanced. Furthermore, the relationship between domestic cotton and imported cotton should be addressed appropriately. Therefore, the government should make more effort to set up a long-term development mechanism for the cotton sector. Macro- control policies (imports and state reserves), the speaker stated, are also necessary, within a free and open market. In addition, cotton quality needs to be improved further.

Mrs Ma Zhuping, deputy Director of the Planting Department, in the Ministry of Agriculture (MOA), predicted a level of cotton output in 2010/11 similar to that of last season. The speaker said cotton area was around 74 million mu (15 mu = 1 hectare), according to MOA data. Cultivated area rose moderately in the Yangtze valley, decreased in the Huanghe valley and remained fairly stable in the northwest region. A good harvest could be in prospect, depending on the weather during September and October.

According to Mrs. Ma, the long-term target for the cotton industry is to keep cotton area at 80 million mu, and output at over seven million tonnes, which should meet 70 percent of total demand. Cotton cultivation should be shifted more to central and western regions, especially Xinjiang. Grains remain the most important crops, and the potential to increase cotton area in the Yangtze and Huanghe valleys is limited. Furthermore, labour costs in eastern regions are continually rising. In consequence, Xinjiang’s share of national output might be greater in future.”

Questions:  In view of its rising population, steady movement from rural to urban areas and the government’s concerted focus on grain production, is holding the overall national cotton area steady a realistic goal?

How can the competitiveness of the ginning and spinning industries be strengthened?

As textile and apparel production continues to transition from the western hemisphere into Asia, chances are good for India to see substantial benefit during the next 10 years, according to a new study issued by Technopak Advisors.