|Title||Trade Poilcies for SMEs in U.S. and Implications for Korea|
|Author||Heechae Ko,Minah Oh,and Boram Lee|
|Series||Policy References 11-21|
The United States government has launched the NEI (National Export Initiative) as an effort to increase U.S. exports to overcome the world-wide economic slowdown. The NEI has five main components. First, the Administration plans to improve advocacy and trade promotion efforts for U.S. exporters. Second, the Administration plans to increase access to export financing. Third, the Administration will reinforce their efforts to remove the trade barriers. Fourth, the United States will enforce trade rules. Fifth, the Administration will pursue policies at the global level to promote U.S. economic growth. For the success of the Initiative, the Administration established an EPC (Export Promotion Cabinet) to improve advocacy and promotion to enhance export assistance to SMEs. The NEI activity in concern with U.S. SMEs can be summarized as follows.
First, the Administration increased the Export-Import bank of the United States’ budget for FY 2010, which would allow the bank to make more credit available to SMEs. Second, the federal government increased the USDA FY 2011 budget to amplify export promotion activities. Third, the federal government increased the Department of Commerce’s ITA (International Trade Administration) FY 2011 budget to expand its trade expert staff, to put a special focus on increasing the number of exporting SMES by 50 percent over the next five years, increase U.S. SMEs’ export opportunities in major emerging markets such as China, India, Brazil, and to develop a comprehensive strategy to seek new opportunities overseas for small businesses in key export sectors such as environmental goods and services, biotechnology, health care, and clean energy.
The United States is also making efforts to overcome exporting barriers for increasing small business export activities. First, U.S. SMEs plan to combine forces with other firms in the same industry, either through trade associations or through less formal consortia. Second, U.S. SMEs plan to collaborate with a single larger firm or a distribution agent. Third, U.S. SMEs plan to take advantage of government programs that assist SME exporters such as the Department of Commerce’s U.S. and Foreign Commercial Service and the Department of Agriculture’s MAP. In support of these efforts, the federal government is taking further steps to better survey SMEs’ barriers to exporting and taking the results into account when implementing financial and non-financial export promotion programs.
Korean SMEs are also facing difficulties in exporting, especially when competing with developed countries’ advanced technology goods and services and developing countries’ cheaper goods and services. Key barriers to export for Korean firms are little experience in overseas markets, lack of overseas network, lack of information and analysis capability towards overseas markets and technologies. Thus, to improve Korean SMEs’ global competitiveness, sustainable and organized export assistance and customized information on foreign markets and up-to-date technologies are needed.