[Senate Hearing 111-178]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-178

                  KEEPING AMERICA COMPETITIVE: FEDERAL
                      PROGRAMS THAT PROMOTE SMALL
                           BUSINESS EXPORTING

=======================================================================

                                HEARING

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 30, 2009

                               __________

    Printed for the Committee on Small Business and Entrepreneurship


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                                 senate





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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED ELEVENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
JOHN F. KERRY, Massachusetts         CHRISTOPHER S. BOND, Missouri
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JOHN THUNE, South Dakota
JOSEPH I. LIEBERMAN, Connecticut     MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington           JOHNNY ISAKSON, Georgia
EVAN BAYH, Indiana                   ROGER WICKER, Mississippi
MARK L. PRYOR, Arkansas              JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland
JEANNE SHAHEEN, New Hampshire
KAY HAGAN, North Carolina
           Donald R. Cravins, Jr., Democratic Staff Director
              Wallace K. Hsueh, Republican Staff Director












                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, The Honorable Mary L., Chair, Committee on Small 
  Business, and a United States Senator from Louisiana...........     1

                           Witness Testimony

Gordon Mills, Karen, Administrator, U.S. Small Business 
  Administration.................................................     4
Kirk, Hon. Ronald, Ambassador, United States Trade Representative    10
Hochberg, Hon. Fred P., Chairman and President, Export-Import 
  Bank of the United States......................................    16
Sefcik, Patricia, Acting Deputy Assistant Secretary, Domestic 
  Operations of the U.S. and Foreign Commercial Service, 
  International Trade Administration, U.S. Department of Commerce    25
Schreiber, Eugene J., Managing Director, World Trade Center of 
  New Orleans....................................................    42
Simek, Diana, Vice President for Business Development, Ark-La-Tex 
  Regional Export and Technology Center, Inc., and Manager, 
  Metro/Regional Business Incubation, Shreveport, Louisiana......    54
Castro, Wilma, Owner, International Export Sales, L.L.C., on 
  behalf of the Louisiana District Export Council, St. Rose, 
  Louisiana......................................................    62
Hingle, Jerry, Executive Director, Southern United States Trade 
  Association....................................................    67

          Alphabetical Listing and Appendix Material Submitted

Castro, Wilma
    Testimony....................................................    62
    Prepared statement...........................................    64
Hingle, Jerry
    Testimony....................................................    67
    Prepared statement...........................................    69
Hochberg, Hon. Fred P.
    Testimony....................................................    16
    Prepared statement...........................................    19
Kirk, Hon. Ronald
    Testimony....................................................    10
    Prepared statement...........................................    14
Landrieu, Hon. Mary L.
    Opening statement............................................     1
    Questions for the record.....................................    88
Mills, Hon. Karen Gordon
    Testimony....................................................     4
    Prepared statement...........................................     7
Schreiber, Eugene J.
    Testimony....................................................    42
    Prepared statement...........................................    45
Sefcik, Patricia
    Testimony....................................................    25
    Prepared statement...........................................    27
Simek, Diana M.
    Testimony....................................................    54
    Prepared statement...........................................    56

 
                  KEEPING AMERICA COMPETITIVE: FEDERAL
                      PROGRAMS THAT PROMOTE SMALL
                           BUSINESS EXPORTING

                              ----------                              


                         TUESDAY, JUNE 30, 2009

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    New Orleans, LA
    The Committee met, pursuant to notice, 1:06 p.m., in the 
Port of New Orleans Auditorium, First Floor, 1350 Port of New 
Orleans Place, New Orleans, Louisiana, Hon. Mary L. Landrieu 
(chairman of the committee) presiding.
    Present: Senator Landrieu.

OPENING STATEMENT OF THE HONORABLE MARY L. LANDRIEU, CHAIRMAN, 
           AND A UNITED STATES SENATOR FROM LOUISIANA

    Chair Landrieu. I would like to thank our witnesses who are 
here today. I am honored as the Chair of this committee that 
you would accept the invitation to testify.
    I also want to particularly thank the Port of New Orleans 
for hosting us. This is a very appropriate venue for the 
subject of this hearing on literally the shores of the greatest 
river system in North America. Let me thank the port and all of 
its employees for hosting us today.
    As I said, it is no coincidence that we chose this location 
as the site of our hearing. This port sees more goods leaving 
its docks each day than almost anywhere else in the nation. It 
pumps $882 million into Louisiana's economy and sustains more 
than 160,000 jobs.
    The reality is, Louisiana's ports, not just the Port of New 
Orleans, but the combined sister ports of South Louisiana, are 
America's ports and the gateway to the world. We are literally 
a main artery, if not the main artery, of our nation's 
commerce. We are home to five of the country's top 13 ports 
exporting more than $42 billion in goods last year alone. We 
send everything from sugar to oil and receive steel and goods 
from all over, over 200 countries worldwide.
    But the recession has caused challenges. The recovery is 
still underway from Katrina, Rita, Gustav, and Ike, major 
storms that have had a major impact on this region. We are 
still having challenges associated with those events. With cash 
registers not ringing like they used to, exporting has become 
one solution for small businesses looking to survive and grow, 
like Xenetech, who is here today with us.
    Guy Barone, I had the pleasure of speaking with him last 
night. Guy is the Chairman is the State's District Export 
Council. With the help of SBA and other Federal programs, Guy's 
family-owned business of just 21 employees ships goods to 
nearly 7,000 customers around the world, customers as diverse 
as Carnival Cruise Lines, NASA, and the Egyptian Army. Most 
recently, he supplied the engraving equipment to the company 
that provided the national championship trophy to our LSU 
Tigers last week. We are very proud of our Tigers and very 
happy the business that manufactured the trophy is right here 
in Louisiana.
    Xenetech and small businesses like it across the country 
have not only used exporting to weather the economic storm, 
they are proving that whatever helps our entrepreneurs helps 
our entire economy. Last year, $70 billion in exports 
maintained or created 600,000 high-paying American jobs. One of 
the successful exporters here today is Ralston Pittman Cole, 
who was recently named Louisiana's Small Business Exporter of 
the Year for his work at EMD Services International. Ralston, 
Guy, and others like them are helping our country grow out of 
this recession.
    Small businesses make up nearly 85 percent of the exporters 
in the State, 97 percent State-wide. I want to call your 
attention to Chart Number 1, which shows how we have got a long 
way to go. The percentage of small businesses that export are 
one percent of all small businesses, so they are in the mighty 
few. That gives us a great opportunity to grow and to help 
small businesses become the exporters that we believe they can 
be.
    The number of big businesses in the other chart are 
represented in three percent. The number of small businesses 
that export in the country, according to our data, is 239,000. 
So small businesses make up the greater portion of exporters, 
but they are still just a small percentage of small businesses 
that are actually exporting. So there is great room for growth 
and that is part of what our field hearing is about today.
    These small businesses have told me that the programs and 
services of the Small Business Administration and other Federal 
agencies are helpful, but we can do more. They have told me 
that better coordination and improvement of our programs are 
needed.
    But perhaps most importantly, we need to understand the 
root of the problem. The tools we have today help solve 
problems caused by inequitable rules created during trade 
negotiations. These barriers, like burdensome regulations, 
excessive reporting requirements, and unfair tariffs, force 
small businesses to act like big businesses, which they can't. 
They can be a business. They can be successful. They can't be 
big if they are small. In healthy times, the successful 
business can try to handle these situations. But when a 
devastating storm or groups of storms or levees that break 
occur, or when a global recession sets in, these challenges 
become almost insurmountable.
    So going forward, we need to be more proactive by ensuring 
that unfair trade rules and regulations don't stand in the way 
of our small entrepreneurs. This is why we are here today, to 
discuss these barriers and propose possible solutions.
    Some of the problems I have seen myself, and I hope some of 
the witnesses here will elaborate on some of the challenges and 
express their views about some of the proposed changes in terms 
of their new advocacy positions. With more than 19 Federal 
agencies involved in trade, small exporters often don't know 
where to turn for help or even that help is available. It is 
time we bring small business trade to the forefront.
    My committee has direct jurisdiction over one of these 
agencies, the Small Business Administration. I have been 
pleased that Administrator Mills has been with me all day this 
morning and part of yesterday touring the region and I will be 
anxious to hear more from her in just a moment. But I have been 
extremely impressed with her commitment and her concern and her 
ideas about what can be done through the SBA.
    We will also take a hard look at other agencies that are 
here representing Commerce and independent agencies that I 
would like to work strongly with them, as well.
    I, along with my Ranking Member on the committee, Senator 
Snowe, and Chuck Schumer from New York, who has also been very 
active in this area, have called for an Assistant Trade 
Representative focused solely on small business within the 
Office of our U.S. Trade Representative, and we are honored to 
have the Honorable Ron Kirk with us today. This advocate would 
be in the room supporting small business during trade 
negotiations. We are hopeful that we could move in that 
direction.
    It is also refreshing to have a strong partner in the White 
House and it has been a pleasure to work with the 
Administrator, as I have said before, earlier in my testimony. 
I am also looking forward to working with my good friend, Fred 
Hochberg, who helped to run this Department and now is heading 
up the Export Bank of the United States.
    So we have a tremendous panel to discuss this issue with, 
and a representative from the Department of Commerce.
    But in conclusion, let me say that, ultimately, this 
hearing is about exporting. It is about export opportunities 
for business. It is about export opportunities for Main Street 
businesses, businesses that with the new technology that we 
have, this has become a real option. Twenty years ago, it 
probably wasn't possible. But with new technologies today and 
the kinds of new opportunities that small businesses can look 
to, and because of the challenges here at home with their own 
markets and their own neighborhoods and their own communities, 
small businesses are looking other places in the world for 
opportunities. And I think, ladies and gentlemen, if I can say, 
if we do our jobs the very best we can, it can bring hope and 
opportunity for the small businesses in our country.
    I would like to introduce, if the staff will give me the 
introduction list, we will introduce our first panel of 
witnesses today. First, Karen Mills, Administrator of the Small 
Business Administration. Ms. Mills directs an agency of over 
2,000 full-time employees, but her network is quite extensive 
and hopefully she will spend a moment talking about that in her 
testimony today. She comes fully prepared for this job, tapped 
by the President to run, I think, one of the most important 
agencies of the Federal Government right now and we are pleased 
to have Ms. Mills with us.
    The Honorable Ron Kirk--he has so many titles, I don't know 
what to call him, Mayor, Ambassador, and now Trade 
Representative for the United States of America. He is one of 
the President's top appointees in this regard and we are very 
pleased to have you, Ambassador Kirk, with us.
    Fred Hochberg, as I said, is Chairman and President of the 
Export-Import Bank of the United States. We are just excited to 
have him heading up this exciting agency. He has been involved 
in business, government, and philanthropy for many years and 
was the former Deputy and Acting Administrator of the SBA. So 
he and Ms. Mills will have a great deal in common and a lot of 
ideas to share, having both served in that capacity.
    And Patty Sefcik is standing in and doing a wonderful job 
for the Commerce Secretary, who called to say he was sorry he 
could not be here, that other business kept him away. But as 
the Acting Deputy Assistant Secretary for Domestic Operations 
of the United States and Foreign Commercial Service--big 
title--she is with us today and oversees the Export Assistance 
Centers operating in 48 different States.
    So with that, let me turn it over to Ms. Mills. We look 
forward to your testimony this morning.

STATEMENT OF HON. KAREN GORDON MILLS, ADMINISTRATOR, U.S. SMALL 
                    BUSINESS ADMINISTRATION

    Administrator Mills. Thank you very much, Senator Landrieu. 
I have to say that the people of Louisiana and all of America's 
small business community are very fortunate to have such a 
strong advocate as you are in Washington and in the U.S. 
Senate.
    I want to thank you also for the past couple days. We have 
had a chance to see firsthand what is going on in this 
continued but difficult redevelopment effort here in this 
region and to visit with small businesses and entrepreneurs, 
Main Street entrepreneurs in a gas station, one of the first 
that has come back to a devastated community and has provided 
some of the linkages to grow that entire revitalization effort. 
We have seen young, vibrant entrepreneurs. But there is much 
work still to be done here and we are very happy to work in 
this community and to be part of that effort.
    It is also a pleasure to be here with Ambassador Ron Kirk 
and Chairman Fred Hochberg and Acting Deputy Assistant 
Secretary Patty Sefcik at the U.S. Department of Commerce and 
everyone else who has joined us today. Truly, it is going to 
take all of us working together to keep America competitive, as 
the title of this hearing suggests. Madam Chair, I am pleased 
to share the SBA's efforts to help small businesses compete in 
the global marketplace.
    The SBA provides access to capital for small businesses on 
Main Street and to some of the country's high-growth, high-
impact small businesses. The SBA has a portfolio of loans and 
loan guarantees of more than $80 billion. We have 68 district 
offices, including one here in New Orleans. We have more than 
2,000 employees, as well as 1,200 stand-by trained employees 
who can be deployed to communities affected by disaster. And we 
also have 18 Senior International Trade and Finance Regional 
Managers across the country.
    Our partners are part of our important network and they 
include over 900 Small Business Development Centers--and we 
have 11 here in Louisiana--and more than 100 Women's Business 
Centers--and we have two here in Louisiana, as well. We have 
350 chapters of our mentoring group, called SCORE, and they 
have five chapters here in Louisiana. So all told, as you 
describe, we have a very broad bone structure throughout the 
United States which includes about 14,000 affiliated SBA 
counselors.
    We know that this is a difficult time for small businesses 
to gain access to capital, so since the Recovery Act passed, we 
have redoubled our efforts to put more money into the hands of 
entrepreneurs and small business owners. We have done a number 
of things. We have raised the guarantee on our 7(a) loans to 90 
percent and we have reduced or eliminated the fees on our 
flagship 7(a) and 504 loan programs. And as a result, the loan 
volumes in these programs are up more than 35 percent compared 
to the weeks before the Recovery Act.
    In addition, importantly, we have brought nearly 600 banks 
and credit unions back to the SBA programs, nearly half of whom 
had not participated since 2007. For Louisiana, this has 
resulted in $55 million in lending support for nearly 200 small 
businesses throughout the State, and I want to give you just 
two quick examples to bring this alive.
    In West Monroe, Sawyer Industrial Plastics has provided 
plastic repair parts for the paper industry for 32 years and 
the owner was shifting his strategy to a new market when his 
conventional credit was canceled. So he was able to get an SBA 
loan of $700,000, which was a lifeline, and the fee savings 
from the Recovery Act allowed him to add an employee to help 
with the new products.
    The second example is just north of here, in Mandeville, 
Woolf-Harris Plumbing bought a new building, but they were left 
short of cash, and even though the demand for their products 
and services was high, with the increased guarantee from the 
SBA, a local bank was able to extend $250,000 for working 
capital through a 7(a) loan. Nationwide, about 20 percent of 
these loans have gone to minority-owned businesses, 19 percent 
have gone to women-owned businesses, and in fact, the SBA is 
three to five times more likely to make loans to women- and 
minority-owned businesses than conventional lenders.
    In addition, just two weeks ago, we added another tool to 
the toolbox, a brand new program called America's Recovery 
Capital, or ARC loans. These loans are providing the relief 
that many viable but struggling small businesses need. ARC 
loans are 100 percent guaranteed by the SBA. They are for up to 
$35,000, over six months, interest-free to borrowers, and they 
have no repayment for 12 months after the final dispersal.
    The Recovery Act also provides billions of dollars in 
contracting opportunities. We are responsible at the SBA for 
making sure that small businesses have the opportunity to 
deliver at least 23 percent of Federal contracting. We see this 
as a win-win situation. Small businesses benefit by getting 
increased volume and sales, and the Federal agencies and the 
taxpayers benefit because they are working with the most 
innovative companies, often with a direct line to the CEO.
    All of these efforts of the Recovery Act are aimed at 
building a stronger foundation for small businesses to grow and 
to explore areas like the one we are here to talk about today, 
international trade.
    Overall, small businesses accounted for more than $500 
billion last year in export sales, or nearly 30 percent, while 
it is still difficult for many small businesses to know exactly 
what steps to take to reach potential export markets. In fiscal 
year 2008, the SBA facilitated more than 3,300 loans for 
exporters, and in the Louisiana and Texas region, we were able 
to provide training and counseling to more than 300 lenders and 
more than 600 small business owners. We have international 
trade loans, which I will describe in a moment, but the 
Recovery Act has allowed us to raise the guarantees on those 
loans, as well, across all our programs and to waive the up-
front fees for borrowers on loan terms of greater than 12 
months.
    Some examples of our program: We have the Export Working 
Capital Program, and that loan is coordinated through our SBA 
staff that work in collaboration with the Department of 
Commerce at 18 U.S. Export Assistance Centers around the 
country, and we have a growing number of preferred lenders to 
whom we delegate the authority to process these loans directly 
to our loan processing center in Sacramento. These loans are 
important because small businesses often need an initial line 
of credit for suppliers, inventory, or production of export 
goods, especially when the first big order from abroad comes 
in. The SBA provides nearly $1.7 million for these loans and we 
can also co-guarantee with the Export-Import Bank on loans of 
up to $2 million.
    Another key program is the Export Express loan, which can 
be up to $250,000 and can usually be approved within one or two 
days by an SBA Express lender. These loans can be used to 
enable a small business company to prepare for exporting. For 
example, it can help with the translation of a business website 
or marketing material and it can also help them participate in 
trade missions.
    So far for this fiscal year, the SBA has guaranteed 598 
loans to exporters and we are working tirelessly to continue 
our outreach and advocacy for small business exports, both here 
in Louisiana and throughout the nation. As part of that, I am 
actually pleased to say that we are in the process of hiring 
our newest Senior International Trade and Finance Manager, who 
will be permanently assigned to the U.S. Export Assistance 
Center here in New Orleans.
    With all these efforts, I am pleased to be working with 
Ambassador Kirk, Chairman Hochberg, Secretary Locke, Acting 
Deputy Assistant Secretary Sefcik, and our other agencies who 
are represented by the Trade Promotion Coordinating Committee. 
This is important because we do have a group and we do work 
very hard together to make sure that the Federal Government's 
programs are coordinated and accessible to small businesses and 
other exporters. Through our collaborations, we can ensure that 
small business will build a stronger foundation of American 
competitiveness while creating well-paying jobs in the 21st 
century.
    Thank you.
    [The prepared statement of Administrator Mills follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chair Landrieu. Thank you, Administrator Mills. You can 
illuminate one of my questions, which was when is that 
representative going to be appointed, so I am glad to know that 
the time is just right around the corner.
    Mr. Kirk.

STATEMENT OF HON. RONALD KIRK, AMBASSADOR, UNITED STATES TRADE 
                         REPRESENTATIVE

    Ambassador Kirk. Well, I would like to join the 
Administrator, first of all, in, Madam Chairman, thanking you 
for your wonderful, tenacious advocacy on behalf of small 
business, but also, being a neighbor in Texas, there is a 
wonderful kinship between Texas and Louisiana, and even though 
I am sitting here as a U.S. Trade Representative, I am also a 
distinguished graduate of the University of Texas and was going 
to serve as President-Elect of the Texas Exes, but I will 
happily say ``Go Tigers'' today. [Laughter.]
    Chair Landrieu. Thank you.
    Ambassador Kirk. Not that happily. [Laughter.]
    Chair Landrieu. Begrudgingly.
    Ambassador Kirk. It was a great series.
    Chair Landrieu. It was a great game.
    Ambassador Kirk. But thank you so much for your advocacy on 
behalf of small businesses and for the region.
    I may be able to abbreviate my presentation. You jokingly 
referred to my number of titles as Mayor, Secretary and 
Ambassador, and I think I would have to refer to you as Senator 
and Chairwoman and perhaps Ambassador Pro Bono. You did a 
fairly great job of explaining the importance of small 
businesses to the growth of trade and exporters, and in fact, 
there are almost 230,000, 240,000 small businesses that are 
involved in export and they do represent 90 percent of our 
exports. My experience as mayor tells me that is a great growth 
opportunity for our country.
    As we were talking over lunch, all of us throw these 
statistics out so casually and easily about small business 
being the background, particularly of our towns and our cities 
and our urban areas. But as your pie chart shows, there is an 
extraordinary opportunity for growth. If we can invest in those 
small businesses and take them from having 70 employees to 140, 
or take them from 25 to 50 and duplicate that not only up and 
down the Gulf Coast and the Mississippi River that feeds your 
important port, but all around the country, I think we can 
readily calculate and easily calculate the value that would be 
to America and our economic recovery. So I am pleased to work 
with you in this endeavor and to work with our colleagues here, 
as well.
    So in that vein, I want you to know it is important. I know 
that you and Senator Snowe, in particular, have strongly 
advocated for the creation of an Assistant USTR for Small 
Business, but I want you to know the importance it is to us. We 
are the smallest of the agencies within the Executive Office of 
the President, with only 227 employees, and so we would welcome 
all of the assistance that we can get. But I am also sobered by 
the reality that one person doing that job may not be as 
effective as making sure that we have maintained a focus on 
small business throughout our agency. And I want you to know it 
is one of our highest priorities.
    Small business cuts across all of the work within the 
United States Trade Representative, so even though there may 
not be one person dedicated, it comes up in everything we do--
in the negotiation of our trade agreements, in our enforcement, 
in our intellectual property rights work, and it is important 
enough that I have already had and invited to our office 
Commerce Secretary Locke to strengthen the ties that we have 
with Commerce through the office represented by Ms. Sefcik and 
others. SBA Administrator Mills came over last week and brought 
her team, because I want to make sure that we are doing 
everything humanly possible to take the burden off that small 
business person to have to weave their way through those 19 
Federal agencies and that we can work collaboratively perhaps 
and be a single point of entry to make sure that we work with 
small businesses to help them understand the critical role that 
they can play in exporting.
    You talked about the importance of the port here to New 
Orleans and Louisiana. We know that more than 2,300 Louisiana 
businesses exported goods, according to the most recent data 
that we had, with small businesses accounting for more than a 
third of your State's total exports. And work at the Port of 
New Orleans here, as you mentioned, supports over 160,000 high-
quality jobs, and we have the data now that we know that the 
jobs that are related to exporting and trade tend to pay 
anywhere from 15 to 20 percent higher than other jobs in our 
economy. So small businesses that are involved in exporting can 
be a great way to help rebuild the Gulf Coast, but also sustain 
those families, as well. And when we improve business access to 
new markets overseas, which is one of our top priorities, we 
are helping to grow good jobs here at home in America.
    You mentioned Mr. Cole, and we were pleased to be able to 
help join in congratulating him as your Louisiana Small 
Business Exporter of the Year. I also had the great joy in 
joining with Administrator Mills at the State Department last 
month in which we highlighted and feted those small businesses 
across the country that have been successful in exporting. And 
we want to continue to work with you and the Administrator to 
make sure that we are opening new markets, but doing so in a 
way that we meet those challenges that you referenced in 
dealing with non-tariff barriers, customs, regulations, and 
others that for large businesses are an annoyance, but for 
small business can in many cases be an absolute bar to them 
going forward. We want to work with you to make sure that we 
are addressing those.
    So we are asking ourselves the question at USTR every day: 
How can we make sure that our small businesses not only are 
aware of the opportunities within the world of trade and 
exporting, that they have access to the information to get 
involved, and what can we do to make sure that we assist. Let 
me tell you a little bit about what we have done.
    Since 2002, exports by small and medium-sized businesses 
have nearly doubled--that is the good news--from $160 billion 
to $311 billion in 2007. But again, that pie chart is so 
illustrative. I think it shows the explosive potential for 
growth that we have by investing more in our small businesses.
    One example of ways that we do that, we can create market 
access for businesses, America's small businesses and 
manufacturers and farmers and ranchers by two ways. Principally 
in the past, we did it by negotiating new free trade 
agreements, such as the agreement with Mexico and Canada, NAFTA 
and CAFTA. But the reality is, as those free trade agreements 
have matured over the years, we are more likely to create 
market access by doing what I think you asked us to do, is to 
deal with some of these non-trade barriers in the way other 
countries unfairly enforce their rules.
    We had one very high-profile success I am proud of. I have 
been in office less than 90 days now. Within six weeks, we had 
settled a 20-year-old dispute with the European Union over 
access of American beef products to the European Union. It may 
not seem like a big deal, but the fact that we got that 
resolved in six weeks, opened that market up to where it now 
will have thousands of tons more American beef exported within 
the European Union, well, to me, that doesn't mean anything 
unless I think about those farmers and ranchers and the 
suppliers and all of those individuals you were talking to us 
over lunch that literally flow into this corridor, from Texas 
and Arkansas and Iowa and the Midwest down the Mississippi 
River. In many cases, the poultry, the beef is shipped right 
out of your port here. So by dealing with these barriers to 
market access now, we are creating opportunities for families, 
ranchers, manufacturers, many of whom are small family-owned 
businesses today, which translates into increased jobs and 
better paying jobs.
    So we are making market access for small businesses one of 
our highest priorities, and we have heard you. In all of our 
negotiations, we are actively addressing issues as customs 
facilitation, non-tariff barriers to trade, and intellectual 
property rights, as well.
    I also would like to draw your attention to the fact we 
just launched a new website. It is ustr.gov. Like you, I have a 
couple of brilliant teammates, daughters, who upon my 
announcement by the President as his nominee to be U.S. Trade 
Representative, on the same day that he announced Karen Mills, 
my daughters went on our website immediately and my smart-aleck 
20-year-old, who is at Columbia, came in and she said, ``Dad, 
this website is so 1987.'' [Laughter.]
    It took somebody else to bring it to my attention that we 
might not have even had the web in 1987, but we have made it. 
One of the priorities of President Obama is to increase 
information through the Internet. It is much more interactive. 
We are hoping that small businesses can go there, learn about 
our office. We have links to the FBA, the Export-Import Bank, 
and others. So I would hope that any of the businesses that 
hear or see this, if they want to learn more, would come to us 
at ustr.gov.
    Additionally, we are also expanding the access and 
inclusion of small business on a number of our advisory trade 
committees which are so important to our work. And so we have 
recommended small business owners for every one of our trade 
committees, from labor and the environment as well as the 
President's Advisory Committee on Trade Policy.
    I look forward to working with you and Senator Snowe and 
others--obviously, that is a Congressional prerogative-- if you 
choose to create a new Ambassador for Small Business, but I 
want to give you the assurance that small business is at the 
core and at the heart of our work at USTR and we look forward 
to working with you.
    [The prepared statement of Ambassador Kirk follows:]

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    Chair Landrieu. Thank you so much, Ambassador Kirk. I truly 
appreciate that, and thank you for referencing my interest in 
creating a position. We look forward to continuing to work with 
you to see how that might move forward.
    The Honorable Fred Hochberg.

   STATEMENT OF HON. FRED HOCHBERG, CHAIRMAN AND PRESIDENT, 
            EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Hochberg. Thank you. Thank you, Chairwoman Landrieu. I 
have a longer statement which I would like to be entered into 
the record.
    Chair Landrieu. Without objection.
    Mr. Hochberg. I am pleased to appear before you today to 
discuss Export-Import Bank's efforts to create and sustain job 
growth in the U.S. small business sector. As you well know from 
your role as Chairwoman, small businesses drive innovation and 
technological advancement, and their success, as I saw in my 
own family business and at the SBA, is critical to our economic 
growth.
    I also appreciate the opportunity to come back down here to 
New Orleans. I enjoyed working with you at the SBA. We did a 
conference when I was at the new school about cities and 
recovery and I was happy at that time we actually set up a 
scholarship fund for citizens of Louisiana to study urban 
policy in New York, and that program is still continuing.
    Chair Landrieu. Thank you, Fred. We appreciate that.
    Mr. Hochberg. President Obama placed me at Ex-Im because of 
my personal history with and commitment to small businesses. I 
understand firsthand the challenges that these owners face, 
having worked in my family's business for 20 years, and 
President Obama's support of Ex-Im's small businesses and 
exporters is vital to the solution of our current economic 
challenge.
    I also know Administrator Mills understands these issues 
facing small business exporters and I look forward to working 
more closely with her. As the Ambassador mentioned, I met Ron 
Kirk when he was Mayor, so in one of his other titles, and I am 
also happy that Patty Sefcik is also here from Commerce.
    The business outlook today is daunting. We are in the midst 
of an economic crisis in credit, lack of liquidity, and 
depressed consumer confidence. Ex-Im is stepping up to help 
sustain and create U.S. small business jobs. It is our mandate. 
It is what we do. Through Ex-Im's insurance, working capital, 
loans, and guarantee programs, we have supported over $50 
million worth of Louisiana small business exports in 2008.
    Madam Chair, let me give you an example from right here in 
New Orleans. Reliable Industries provides mining equipment to 
countries such as Canada, Guyana, and Zambia. Since 2002, Ex-Im 
has provided Reliable Industries an export credit insurance 
policy which allows such international sales to go forward. I 
actually met Mike Rongey, who is the President of Reliable 
Industries, this morning, and I believe he is in the audience 
with us today, along with his bankers, Bill Richard and Bill 
Cummins of Chase, that helps provide some of that credit.
    Reliable Industries, with 35 employees, exemplifies Ex-Im's 
mandate, to create and sustain jobs in the United States by 
helping to finance exports of U.S. goods and services that the 
private sector is unable to otherwise finance. And in fact, 
Mike just dropped me a note just this past week. We helped him 
secure a half-million-dollar order to Latin America and, in 
fact, the goods are about to ship out of Houston in the next 
week, in fact.
    So far this year, Ex-Im has authorized over $2.5 billion 
for the support of small business exporters, up more than $1 
billion compared to the same period a year ago.
    Let me just take a moment to review two programs most 
important to our small business customers. First, we provide 
insurance to U.S. exporters to insure their foreign 
receivables. This reduces the risk of non-payment and drives 
more U.S. sales abroad. Additionally, we have worked to find 
more ways to reduce the cost to small businesses. For example, 
in October of 2008, we reduced our premiums only to our small 
business customers by 15 percent.
    Second, our working capital guarantee program is often used 
by small business exporters. With this product, we guarantee 90 
percent of a commercial bank loan for a U.S. exporter to fund 
the purchase of both equipment and raw materials to fulfill an 
export contract. At a time when commercial banks are stepping 
back, Ex-Im is stepping up to meet this need.
    In an effort to better serve small businesses, Ex-Im works 
with SBA to provide one-stop shopping. In April 2004, way 
before Administrator Mills and myself, the SBA launched a co-
guarantee program. This initiative allows Ex-Im to supplement 
SBA's guarantee to help small business exporters obtain larger 
loans than SBA could support on their own. Under this 
initiative, since 2004, we have supported 46 loan guarantees, 
resulting in just under $350 million in exports. I do believe 
that we can and should do better and I look forward to working 
with Administrator Mills to accomplish this.
    Our regional directors partner with other agencies, such as 
the Department of Commerce Export Assistance Centers, to 
harness all Federal, State, and local resources to encourage 
export activity. And in fact, just yesterday, I met with 
Commerce Secretary Locke and I look forward to expanding our 
cooperation with him in the Commerce Department in pushing U.S. 
exports.
    Furthermore, in picking up what Ambassador Kirk mentioned, 
we have Ex-Im Online that provides an automated transaction 
processing system to reduce paperwork and allow our customers 
to track applications in real time. And this morning, I met 
Carlos Hidalgo, who I know that you know, who is here today 
from tech sales from Italy and he complimented and said the 
best thing I could have heard about this online program.
    In closing, let me just give you one more example of 
Louisiana's small business receiving Ex-Im support. The company 
is Living Quarters Technology in Baton Rouge. It has the 
largest fleet of affordable living quarters for the oil and gas 
industry in the Gulf of Mexico. Living Quarters Technology 
employs 45 people right here in the State. An Ex-Im insurance 
policy, coupled with a working capital guarantee, allowed them 
to compete and win a $5.5 million contract with the Mexican oil 
company Pemex, and we were part of that bid package.
    These companies remind me of my own start, and at present I 
have a mission at Ex-Im to see more of these small business 
successes. I look forward to any guidance from you, Madam 
Chairwoman, and your Senate colleagues to enable more U.S. 
small business exporters to capture overseas sales. I would be 
happy to answer any questions.
    [The prepared statement of Mr. Hochberg follows:]

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    Chair Landrieu. Thank you very, very much.
    And let me just ask--I will do this in my questions, but 
when you said you combined the program and your guarantee was 
able to increase, do you know what it was able to increase to, 
the amount when you combined your programs? You could check.
    Administrator Mills. The total would be $2 million.
    Chair Landrieu. Two million, okay. Thank you.
    Patty.

     STATEMENT OF PATRICIA SEFCIK, ACTING DEPUTY ASSISTANT 
    SECRETARY, DOMESTIC OPERATIONS OF THE U.S. AND FOREIGN 
 COMMERCIAL SERVICE, INTERNATIONAL TRADE ADMINISTRATION, U.S. 
                     DEPARTMENT OF COMMERCE

    Ms. Sefcik. Thank you. Senator, thank you for the 
opportunity to speak here today about the role of export 
promotion and our efforts to strengthen and support America's 
economy. It is truly a pleasure to be here and I am quite 
honored to be part of this distinguished panel.
    Let me assure you that Secretary Locke recognizes the 
important role small businesses will play in pulling America 
out of this economic crisis. The Secretary recognizes that it 
is important to streamline government bureaucracy and bring 
solutions and services directly to businesses to help create 
and sustain family wage jobs. My testimony today will provide 
you with some insight on how the Department of Commerce has and 
will continue to implement programs that promote small business 
exports.
    The International Trade Administration helps American firms 
and workers navigate the often complicated waters of foreign 
trade. Within this unit, the U.S. and Foreign Commercial 
Service operates a global network of trade promotion 
professionals and 109 U.S. Export Assistance Centers and at 
U.S. embassies and consulates in 77 countries. Commercial 
Service staff provides U.S. companies with numerous services, 
ranging from export counseling and market research to 
identifying foreign international buyers and providing advocacy 
support.
    Overall, the Federal Government's trade promotion efforts 
are led by the Trade Promotion Coordinating Committee, or the 
TPCC. The TPCC is headed by the Secretary of Commerce and its 
members comprise 20 Federal Government agencies, including the 
agencies here today on the panel. This committee develops 
priorities on trade promotion and finance programs which are 
designed to assist small businesses sell their goods and 
services overseas.
    As part of this effort, the TPCC sponsors interagency 
training to promote a better understanding of these programs, 
and to date, over 700 participants from 12 agencies and seven 
States have completed this training. SBA and Ex-Im Bank 
representatives are co-located in some of our domestic 
locations with the Commercial Service, and together their 
efforts have resulted in an impressive list of export 
successes.
    For example, in Louisiana, the Dredging Supply Company 
located in Reserve, Louisiana, is a family-operated 
manufacturer of customized dredging equipment, which is used 
all over the world. One recent sale included a $3.5 million 
dredge financed by a loan backed by Ex-Im Bank. Among other 
things, the company attributes this success to the assistance 
that they received from the local Federal colleagues.
    Companies, especially small businesses, also use our Trade 
Information Center, called the TIC. This call center serves as 
a single point of contact for the TPCC's export assistance 
programs, and last year, the TIC gave personal assistance to 
more than 36,000 inquiries, with 73 percent of them coming from 
small businesses.
    In addition, we also have a TPCC website, which is 
export.gov, that acts as a portal for the Federal Government 
trade promotion resources. Other services used by small 
businesses include international buyer shows, trade fairs, and 
trade missions which assist U.S. companies in developing their 
business relationships with customers overseas.
    In 2008, we supported trade missions to 27 overseas markets 
with a total of 420 U.S. companies participating. This resulted 
in nearly $350 million in sales to date. Several Louisiana 
companies are currently bidding on major projects as a result 
of the March 2009 trade mission to Columbia.
    Strategic partnerships are key in reaching out to small 
businesses, and so, for example, the Louisiana Economic 
Development Office and the Louisiana District Export Council 
played a very strong and active role in sponsoring activities 
in conjunction with that trade mission. We work very closely 
with State and local partners throughout the United States to 
educate small businesses on the benefits of exporting, and 
another key partner for the Commercial Service is the network 
of our 60 District Export Councils, who work with us to 
increase exports through joint outreach and education events.
    So in closing, the downturn in the world economy has 
adversely affected all of our industry sectors and exports. 
Many of our major trading partners are experiencing it even 
more, resulting in recent declines in foreign demand for our 
goods. So in these troubled times, the Department of Commerce 
and the TPCC agency's export promotion work is more important 
than ever for small businesses. I remain committed to promoting 
small exports.
    [The prepared statement of Ms. Sefcik follows:]

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    Chair Landrieu. Thank you very much. I appreciate all of 
your testimony, and let me, if you don't mind, Deputy, start 
with you, because this is one of the most important issues 
before our panel today, which is the Trade Promotion 
Coordinating Committee, which you referred to in your 
testimony.
    In 1992, Congress established this committee to provide a 
framework to coordinate U.S. export promotion activities across 
19 different Federal agencies. As you know, it is chaired by 
the Secretary of Commerce. Congress requires this organization 
to produce an annual National Export Strategy document, which 
provides an overview of export promotion activities by these 
agencies. The GAO, however, has recently reported that although 
we have made steady progress since 1993, we have not made as 
much progress, including the tracking of small business 
participation across agency promotion efforts.
    Can you briefly outline the roles, each of you, that your 
agency is working with the agency next to you, so starting with 
Commerce and then to Fred and over, how you all are working in 
this particular framework? The Senate has confirmed now the 
main core. All of you have been confirmed recently by the 
Senate, so you are now in place. Has the National Export 
Strategy been submitted to Congress yet, and if not, why not? 
So, Patty, why don't we start with you, and then if each of you 
could just comment on this particular Congressional program 
that was established now 17 years ago.
    Ms. Sefcik. Thank you. It is a very good question. The 
Secretariat for the TPCC obviously does reside in the 
Department of Commerce and we have been working collaboratively 
with all the agencies. Obviously, within the TPCC, there will 
be some core agencies that come up to the forefront, including 
the agencies that are here at the table today.
    The National Export Strategy is a way every year to measure 
our successes with the division of where we wanted to move 
forward. In a transitional year, such as now, the National 
Export Strategy over time historically is never printed out in 
a transition period. But having said that, we know that 
Secretary Locke has reached out to a lot of his colleagues 
within the TPCC and we are looking forward to having its first 
meeting this fall. For that meeting, the goal would be to have 
that visionary strategic plan of where the administration wants 
to go with the promotion of the Federal Government resources to 
collect--to come together, because what we find out through our 
collaboration, a lot of the staff that are located around the 
United States where we co-share, we come to a point where we 
want to show the successes in a visionary type of way so we can 
keep building on one another's expertise. It is that added 
value versus we can do it alone.
    So we are hoping that we have the TPCC under the 
administration, that will show the vision, and once that 
vision, what the priorities are established, each year then 
thereafter, the National Export Strategy would be printed out 
almost like a way of the accomplishments of an annual report. 
So that is why it is not going to be published this year, due 
to the transition.
    Chair Landrieu. That is very important, because, of course, 
you know, without a vision, people perish. But without a 
vision, you can't really move forward in a coordinated way 
because there are so many different pieces. People aren't 
really clear what the goal is. So if we can at least update, 
you know, refresh and update that strategy, particularly with 
some of the new leadership that is on board, and it is nice to 
get that on the record that you will all be meeting in the 
fall, and then potentially do you know--do you have a time 
frame of when the report will be ready for Congress?
    Ms. Sefcik. I don't have that information with me right 
now, but I could definitely send you a written response to that 
question.
    Chair Landrieu. Okay.
    Ms. Sefcik. But I would like to say here again, at the 
working level, all of the staff, all of these agencies here 
continue to collaborate with all the joint training, the joint 
conferences, the joint events. The trade missions have been 
hugely successful. So we are continuing efforts, and as our 
leadership comes together, the vision will be set.
    Chair Landrieu. Okay, and Chairman Hochberg.
    Mr. Hochberg. Secretary Locke and I actually just talked 
about this yesterday when we had lunch and we are looking at 
some joint programs we could do around the country to sort of 
do some regional export forums and roundtables, similar to what 
we are doing today, and bringing more folks to understand best 
practices and examples and some of the products offered.
    That is at all of our regional offices. We have five 
regional offices and two satellites. All reside in Commerce 
Department offices, in their Export Assistance Centers. So they 
anchor our work there, and many of the leads we get come right 
from the Commerce Department. So we really work very closely 
with them for those exports that need financial assistance to 
get done. Many exports don't need our assistance, and those 
that do, Commerce provides them those needs.
    Chair Landrieu. Thank you. Ambassador.
    Ambassador Kirk. Yes, Madam Chair. I would add, I think I 
referenced it in my remarks, my prepared remarks, the work and 
the outreach we have done both with Secretary Locke and 
Administrator Mills. I would just underscore, too, even while 
we are waiting on the formal convening of the Policy 
Coordinating Group, to echo what Patty and Fred have said, that 
the working groups continue.
    We have been particularly aggressive in reaching out with 
Administrator Mills and getting our teams together to help them 
understand the imperative for moving quickly, just to make sure 
that--my experience as Mayor suggests just remove as much of 
the burden from that small business figuring out. I tried to 
have a very retail approach to being Mayor, and we all know the 
bad experience of going to a grocery store and then saying, 
``It is over there,'' as opposed to somebody saying, ``Let me 
take you and get it for you.''
    And so what we are doing is just trying to make sure every 
day and everywhere, everything we communicate when we interface 
with small businesses, that we work to get to the right people 
at the right place. And again, even on our website, I have done 
something that was scoffed at when I was Mayor, but I have 
invited businesses to tell us what we are doing that drives you 
nuts and then challenge our agency to explain why we have to do 
this, or if we can't come up with a good reason, then we need 
to stop it and look at changing the rules.
    So we are reviewing that process. We are asking small 
businesses to contact us to tell us what we can do to help them 
more effectively, particularly in our negotiations to help 
remove barriers, and then working with all the agencies.
    Chair Landrieu. Ms. Mills.
    Administrator Mills. Well, Madam Chair, thank you for 
bringing up this point, because the Trade Promotion 
Coordinating Committee is very, very important to our efforts 
and the SBA is very pleased and excited that Commerce's 
leadership is going to bring this group together in a vital 
way. This is important for us to be able to do our work. Our 
current organization is housed, co-located with Commerce for 
all of our trade activities, and as you know, we do co-
guarantee already with Ex-Im Bank.
    But I think even more interesting is the strategy that 
Ambassador Kirk and I have begun to discuss, really from the 
first meeting that we have had, and now we have got our teams 
together, which is how is it that we are going to deliver the 
small business aspect of this coordinated strategy. So that 
will be ongoing and will be finally brought to you by the 
reports and the activities of this Coordinating Committee. So 
thank you for the pushing.
    Chair Landrieu. Thank you, and I will only add--I have a 
few more questions and then we are going to move to our second 
panel, but I would only add, and I am not the expert on the 
Internet, but I am really enthralled with what I am able to do 
myself, which is very empowering. But when I watch what my 
staff is able to do in terms of finding information, accessing, 
it truly is quite remarkable.
    And as a government official for many years, it occurs to 
me that some of our stovepipes, not only do we need to 
collaborate more with each other, but we have got to be on the 
cutting edge of this communication so that when a small 
business is sitting out there somewhere in America and they are 
thinking, I want to export, they have some idea of what part of 
the world they want to export to, they should hit a button, and 
let us say Colombia or Central America, South America should 
come up, and there should be information very valuable from 
each of you and all of the different entities so that it starts 
framing a clearer picture of the opportunities in that country.
    And that is the way the new generation uses the Internet. 
You know, you want to go on vacation. You sit there and you 
look at all these sites and you think, where do I want to go in 
the world? You hit a button and you have got lots of options. I 
see these heads shaking, so I know I am hitting some nerve 
here.
    But I don't think that government actually, although the 
President himself has done quite a remarkable job with his own 
communications, I think that the government entities--and I am 
going to make sure at least the ones that I have some 
responsibility for push this issue out, because it is just the 
way this generation operates. They don't go to conferences. 
They go to their living room, hit the ``click'' button, and 
they take themselves all over the world, and we have got to 
respond to that.
    So my point would be, have the meeting, get the plan, but 
let us get the plan on the Internet in a way that people can 
facilitate it and use it, because really, truly, it is a great 
market out there, and as you see, we have a great many 
businesses that are searching for markets. They are looking for 
them in their area where they live, but they are also looking 
at markets around the world to grow their businesses and I 
think we can be helpful.
    Let me just ask a few more questions, if I could. Ms. 
Mills, you know that last year, the SBA made 3,300 loans to 
exporters. We approached the end of the third quarter of 2009. 
Our records show that only 598 loans have been made to 
exporters. Now, we know there is an economic downturn not only 
here at home, but markets abroad have been shrinking. Do you 
agree that these are the figures? If not, could you clarify 
what you think they are, and what are some of the strategies 
that you might employ now as the new leader of this agency to 
see what we could do, if you could list maybe one or two 
specific things to try to move these loan amounts or numbers 
up.
    Administrator Mills. Thank you, Madam Chair. These are the 
same figures, I believe, that we have, and as you know, lending 
in the fall of this year really just ground to a halt overall. 
Our overall lending is down 50 percent. And with the Recovery 
Act, we have been able to push that back up by 35-plus percent, 
but it is not even yet close to 2008, 2007 levels. So we have 
more work to do, both to get banks back in the program and to 
get companies ready to be able to borrow.
    That applies, as well, to our exporting communities, plus I 
think what you heard here is that we have the opportunity now 
to increase our collaboration with the others at this table and 
explore ways that export markets might provide the 
revitalization that some of these companies need. So a company 
that before was doing just fine domestically and now finds 
those markets are not coming back could very well be turning to 
export as a more primary option.
    So I think the things that you have heard today, developing 
this collaborative small business strategy, continuing our 
outreach, both through the Recovery Act programs, we have 
revitalized our district offices, we are adding to our export 
representatives that are co-located with Commerce, and even 
more importantly, Secretary Locke and I have talked about this 
enormous network that Commerce has domestically and in other 
countries and using that network. We have also talked to the 
Department of State. They have economic representatives. And so 
we are looking at using those and connecting those, who mostly 
have been dealing with large businesses, connecting those more 
strongly to small businesses. So I think that could be very 
powerful.
    Chair Landrieu. Thank you very much.
    Chairman Hochberg, let me ask you, 22 percent of the 
Export-Import Bank's financing directly supported small 
business. As you know, there is a legally required threshold of 
20 percent, so last year the Bank met its goal. What are your 
plans, though, as the new Chair to perhaps even expand on this 
threshold, and what potentially do you have in mind to see if 
we can not only meet, but potentially even exceed this goal of 
20 percent next year?
    Mr. Hochberg. Thank you for the question, and more 
importantly, thank you for your interest. Actually, in the two 
prior years, we were actually as high as 26.7 percent, though 
those percentages are very--they are difficult to manage, and I 
will give you an example. This year, small business lending is 
up 83 percent, but large aircraft, such as Boeing, is up 100 
percent, so although we are making great strides and actually 
have an increase in loans to small business exporters this 
year, some other transactions have grown even more quickly.
    So although we have a goal of 20 percent, I would not say 
that we are going to meet that every year. Some years we will 
go above it. Some we may be a little lower because we want to 
take in every piece of business we get in the door and not turn 
someone down just to meet our numbers.
    But that said, I mentioned in my written testimony, I was 
out in Pittsburgh last week. I met with all of our regional 
directors, looking at a number of the programs that we have, 
seeing what some of the impediments are to making those 
programs more effective so that we can help more small business 
owners in their export efforts. We have a program, just to 
explain, we have a program for insurance, where if you are an 
exporter selling overseas, we will ensure that you will get the 
receivable. And once the company has that insurance that they 
are going to get paid, we are actually going to help them go to 
a bank and get more loans for working capital and other types 
of--to help the rest of their business. That may in some way 
pick up some of the slack that some of the small business 
lenders are having, because once a company knows they are 
guaranteed to get paid, a bank is more likely to lend to them. 
So we are trying to couple a number of those programs together 
in a way that we really haven't before.
    Chair Landrieu. And can I ask you to follow up? What 
strategies are you employing to coordinate some of this with 
the community banks in the country, not necessarily the large 
national banks, but do you have any special relations with the 
community banks which are regulated at the State level and for 
the most part managed through this downturn pretty well?
    Mr. Hochberg. You know, I had great experience with the 
community banks when I was at the SBA. We had a program called 
Community Express, where we actually delegated specific 
authority to community and small banks. There has been so much 
turmoil in the banking industry, and in fact, just this past 
week, we have been discussing how we manage our banking 
relationships better because they are frequently product line 
by product line and we are not very often looking at how we are 
managing an entire book of business with an entity. I think 
community banks are very important and probably even a bit 
under--not gotten the full attention they should have gotten.
    Chair Landrieu. Well, I share that, because in my 
experience in the last couple of months dealing with this 
financial crisis that the members of Congress have had to deal 
with literally every day, it occurs to me that there is an 
extraordinary network of community banks as well as credit 
unions out there who are in these communities, located on all 
these Main Streets, who know all these businesses who are 
trying to reorganize and shuffle through the challenges before 
them.
    And I know that the Administrator and I have spoken about 
this and I would like her to comment in a minute about what the 
SBA's vision is to build a stronger partnership with the 
community banks that are located in every town, large and 
small, from Dallas to Tallulah to Jackson, Mississippi, to 
Portland, Maine, and in between. So I don't know, Administrator 
Mills, if you want to just respond for the record of some of 
the things you are thinking about with reaching out to 
community banks and getting them more involved with the core 
SBA lending programs, but also perhaps just as better all-
around partners to what we are trying to do at the Federal 
level.
    Administrator Mills. Thank you, Senator. Actually, you 
brought this up in my confirmation hearing and we actually took 
it to heart and have been working on it as a priority ever 
since, and that is how do we add banks, particularly community 
banks, to the SBA network? We had been losing banks up until 
this point. We have about 50 percent penetration in the 
Federally chartered banks, but very low penetration in State 
chartered banks, which are mostly these community banks, and 
also with credit unions, which are another priority.
    So we have done a number of things to reach out to 
community banks, including conversations with the heads of the 
community organizations, understanding how they use SBA 
products, what we can do to bring more into the fold. And in 
fact, we have had a reasonable amount of success, because as I 
said, 600 banks have come back to the SBA and made a loan since 
the Recovery Act was announced in February. So that is 600 
banks who had not made a loan since October. Half of them 
actually had not made a loan since 2007.
    And so the majority of these are the kinds of banks we are 
talking about, and it is because we were able to reduce our 
fees, increase our guarantees, and reach out to them-- they had 
the capital but they couldn't lend because they didn't have a 
secondary market for their goods and they didn't have the 
liquidity.
    So we have now begun and we will get more with the ARC 
loans, new lenders, and we are making this one of our 
objectives. As you know, I have a dashboard with certain 
metrics on it. This is one of the top metrics we follow.
    Chair Landrieu. Thank you.
    We are going to move to our second panel, but is there 
anything that you all did not get to say that you would like to 
add before this testimony is closed? Of course, the record will 
stay open for the panel for two weeks. But anything that you 
want to add, Madam Deputy? Mr. Chairman?
    Ambassador Kirk. Thank you for your leadership.
    Administrator Mills. And also, thank you and to this region 
for the hospitality.
    Chair Landrieu. Thank you. Well, you are welcome and we 
hope that you will come back often. Many of our restaurants 
have opened and reopened. We don't have 100 percent of them 
open, but I guarantee you can get a good meal if you come, so 
thank you very much.
    We will take a five-minute break and bring our next panel 
up. [Recess.]
    Chair Landrieu. We have with us Mr. Eugene Schreiber. Gene 
Schreiber, Managing Director of the World Trade Center of New 
Orleans is our first witness. He is here on behalf of 1,600 
corporations and individual World Trade Center members. Many of 
us know Mr. Schreiber and we thank you very much for your 
leadership.
    Ms. Diana Simek is our second witness, representing 
Shreveport and Northwest Louisiana. Ms. Simek is Vice President 
of Ark-La-Tex Regional Export and Technology Center and Manager 
of the Metro/Regional Business Incubator. Both organizations 
are subsidiaries of the Coordinating and Development 
Corporation, CDC. Prior to her current position, she owned a 
public relations firm and has a great deal of experience in 
this area.
    Thirdly, Ms. Wilma Castro, owner and Director of 
International Export Sales, which is a Louisiana company 
classified as an export trading company based in St. Rose, 
Louisiana. Her company specializes in the purchase of resale of 
U.S.-manufactured supermarket equipment, commercial 
refrigeration, and light industrial refrigeration to Latin 
America and the Caribbean.
    Mr. Jerry Hingle is our fourth witness. He is Executive 
Director of Southern United States Trade Association, an export 
trade development association made up of the Departments of 
Agriculture of 15 Southern U.S. States and Puerto Rico. It is 
headquartered here in New Orleans. It operates in over 30 
countries worldwide.
    We are scheduled to end at three o'clock, so I am going to 
ask each of you if you could limit your opening remarks to 
three to four minutes and that will give us some time for 
questions and comments.
    Mr. Schreiber.

  STATEMENT OF EUGENE J. SCHREIBER, MANAGING DIRECTOR, WORLD 
                  TRADE CENTER OF NEW ORLEANS

    Mr. Schreiber. Thank you, Senator Landrieu. A lot of 
exciting developments for the future are taking place in 
Louisiana on international trade despite the current worldwide 
slowdown. My written testimony addresses a number of subjects 
that time will not permit me to cover now. They include 
Louisiana's role in the global economy, recent export results 
and trade-related recovery efforts, the State's deepwater port 
system, and new tax credit legislation regarding the ports, the 
new non-stop Aeromexico flight from New Orleans to Mexico City, 
and the possibility of future U.S.-Dominican Republic CAFTA 
meetings to be held in New Orleans, all of which significantly 
affect small business.
    I will focus my remarks now on Federal Government export 
programs to assist small businesses. We all know that engaging 
in international trade is a continuous challenge for a host of 
reasons--payment problems, shipping delays, cultural 
differences, and numerous changing procedures and documentation 
requirements to contend with in every country, including our 
own. All of this can be very confusing and daunting to the 
newcomer, to say the least. While there is a favorable trend 
towards harmonization, we are not there yet.
    Middle-market exporters of manufactured products and 
services need comprehensive training in the export process in 
three ways. First, basic training in exporting procedures and 
documentation. Second, learning about trade finance programs 
available from the SBA, Ex-Im Bank, and other financial 
institutions. And third, export promotion programs offered by 
the Commerce Department and other agencies to Export Assistance 
Centers located throughout this country, including New Orleans, 
and at U.S. embassies and consulates abroad in the larger 
countries.
    But it is this first category of training that I wish to 
discuss now. Trade finance, working capital loans, gold key 
services, and other government programs are of course extremely 
valuable at a certain point, but I believe the starting point 
for a would-be exporter is to fully understand the export 
process, the steps of going to it, the procedures, trade 
terminology, regulation, and documentation. This includes 
learning how to prepare an export business plan, understanding 
the role of freight forwarder, the difference between FOB and 
CIF, preparing a pro forma invoice, packing lists, the 
shipper's export declaration, and other documents and details 
involved in exporting, where even small errors can be 
potentially very costly.
    All this takes time and effort by small business to learn, 
and despite the available technology, it can't be Googled or 
absorbed at a breakfast or half-day workshop. To meet this 
need, the Greater New Orleans Small Business Development 
Center, under the SBA, offers a 17-hour export-import seminar 
that is divided into four afternoon sessions of four-and-a-half 
hours each. Admittedly, that may seem like a lot of time for a 
small business person to devote to learning the basic export 
and import process, but it is necessary, although the export 
and import sections could be divided into two separate courses.
    But the real problem is that for budgetary reasons, the 
course is offered mainly in the New Orleans area at this time, 
whereas most of the individuals and companies that require this 
intensive training are located in other parts of the State. One 
solution would, of course, be to dedicate additional human 
resources, if they are available, to conducting the training in 
more locations to reach more companies. But a better remedy 
would be to develop training videos or webinars that can be 
widely publicized throughout the State. The SBA and Commerce 
Department may want to jointly evaluate this possibility if 
they haven't already done so.
    With regard to several recommendations that have been made 
by your committee, we applaud your initiative to heighten 
attention on exporting by small companies. Specifically, the 
recommendation to create an Assistant U.S. Trade Representative 
position for small business issues and the recommendation to 
appoint an Associate Administrator in the SBA to be in charge 
of overseeing all trade policy and programs and to coordinate 
efforts with other agencies would certainly appear to help 
accomplish those objectives.
    Regarding trade-related positions in Louisiana, it is our 
understanding--in fact, it was confirmed by the Administrator a 
few minutes ago--that SBA may assign a financial trade 
specialist to work out of the Export Assistance Center where, 
in fact, there previously was such a staff person some years 
ago. So this is most welcome.
    We would also suggest, and I think this is very important, 
that the individual assigned to that position by the SBA be 
equally knowledgeable about the basic export processes 
described earlier in order to assist in overall export training 
and not be strictly limited to working on SBA export loans.
    We also are aware that the Export Assistance Center in New 
Orleans is short at least one trade specialist at this time, 
and filling that position, which has not been discussed up 
until now today, also would be important in terms of further 
assisting exporters, and particularly new-to-market small 
companies that have a good export potential. We would make the 
same recommendation as above insofar as that staff person have 
a good grounding in the details of the export process, 
including documentation and procedures.
    With regard to Federal Government export finance programs 
for small businesses, in a nutshell, most of our World Trade 
Center members we talk with believe that Ex-Im Bank's 50 
percent U.S. content for its short-term and credit insurance 
programs is too high and that the SBA's ceilings on their two 
relevant export programs, the Export Working Capital Program 
and Export Express, are too low at $2 million and $250,000, 
respectively. There is further discussion of these issues in my 
written testimony.
    Again, thank you for holding the committee's hearing in New 
Orleans today and inviting the World Trade Center to testify. 
We stand ready to assist you and the committee in your ongoing 
efforts to advance the United States' international trade 
position. Thank you.
    [The prepared statement of Mr. Schreiber follows:]

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    Chair Landrieu. Thank you, Mr. Schreiber, and we always 
appreciate your comments and suggestions and we value your 
counsel. Thank you.
    Ms. Simek.

     STATEMENT OF DIANA SIMEK, VICE PRESIDENT FOR BUSINESS 
DEVELOPMENT, ARK-LA-TEX REGIONAL EXPORT AND TECHNOLOGY CENTER, 
     INC., AND MANAGER, METRO/REGIONAL BUSINESS INCUBATOR, 
                     SHREVEPORT, LOUISIANA

    Ms. Simek. Thank you for inviting me. I really sincerely 
appreciate all the efforts that you have put into trying to 
help our small businesses. In fact, the two subsidiaries of CDC 
that I represent, you were the guest speaker when they were 
announced in 1995, and I thank you for that, too.
    There is some of the information that Gene talked about 
that I agree with. One of the sad statistics is that according 
to the SBA's 2008 report to the President, only 1.6 percent of 
Louisiana small business with employees export. Think of what 
we could do to both help better the economy, to create new 
jobs, and positively impact our trade deficit if we could 
increase that to even ten percent.
    Virtually everything--as Gene said, virtually everything in 
exporting is different from selling to the local and regional 
economy, but we have so many good agencies already in place 
that if we look at--if we just could get them to do and be more 
known to the people that are out there, and that is one of the 
things is I agree with you. We need to put more information on 
the web and make it very easy to find. If you look at the SBA's 
website, you have to dig to find where their international 
trade is. It is buried underneath capital access. So this goes 
to some of our recommendations.
    One is to get all of these agencies to collaborate together 
more frequently. I think it was obvious from what was said 
today that it desperately is needed. And rather than spending--
Gene, contrary to you--rather than spending large sums of money 
and time to create another separate Export Assistance Center 
through the SBA, because that would mean having to train and 
find all these new people, it seems to me that developing 
strong collaboration and referral programs among all of them is 
what would be in the best interest of small business in the 
United States.
    There are a few areas that I would like to address that I 
think SBA could do immediately with little cost to help small 
businesses interested in exporting. First is to change the SBA 
website, because you just can't find anything and they don't 
refer--you have to go way into it to find any kind of 
resources.
    Second, encourage--I didn't realize, and I didn't meet her 
until today, but I didn't realize she was an ETC, ETM, EMC, or 
Export Management Trading Company--but encourage the 
development of Export Management Companies and Export Trading 
Companies. These companies serve as expert intermediary 
agencies for small businesses that prefer not to export. We 
don't have a list of them. So we don't know where to find them. 
I even called Gene one time and we couldn't even locate one.
    Mr. Schreiber. Very few.
    Ms. Simek. So very few. SBA should develop a method to 
register EMCs and ETCs similar to what they do with the 
franchise companies for the loans and provide this list of 
exporting agencies broken down by product type on their 
website.
    Encourage small businesses that have won SBIR research 
grants to export their technologies overseas. SBIR awardees are 
required to report their commercialization efforts to the 
awarding agencies. Adding a section to this report dealing with 
exporting activities could serve as a reminder to the small 
businesses that they need to think globally when considering 
future commercialization opportunities.
    Develop a method--I represent the Business Incubation 
Association, so I have to think about us--but develop a method 
to work with the nation's business incubators, which today 
total more than 1,000 nationwide. Business incubators, 
especially those linked to the universities and working with 
SBIR clients, like mine does, we know where the high-tech and 
the new innovative products are and so we could help make sure 
that they get some exposure to international markets.
    And again, the web. Small business owners find it difficult 
to attend seminars. The Internet offers a great solution in 
webinars. SBA, in collaboration with other exporter assistance 
programs, should offer an ongoing series of webinars covering 
all the important aspects of what a new exporter needs to know.
    ABC annually publishes a Small Business Lending Report 
listing U.S. banks that have made SBA loans during the year. A 
similar listing identifying U.S. banks that provide export 
loans would be a handy tool for small exporters. And rather 
than initiate a grant program nationwide, as has been kind of 
recommended in some of the legislation, a pilot program might 
be considered and monitored to see if the use of such grant 
funds would truly benefit small exporters and the nation.
    Another thought--and I think that Jerry is going to handle 
this one--another thought would be to examine the possibility 
of adopting a program similar to USDA's FAS Market Access 
Program, whereby an organization such as SUSTA would handle 
requests for government subsidiary funding for exporters.
    In closing, I would really like to make very clear that I 
have--my comments about the SBA only refer to the 
international. I fully acknowledge that they are the premier 
Federal agency when it comes to offering business counseling 
and seminars for small business. Their loan programs are 
excellent. Unfortunately, they are not well used in our area, 
though, and I regularly refer my clients to SBA's online 
training programs.
    Again, I thank you very sincerely for holding this hearing 
and I welcome any questions you may have. Thank you.
    [The prepared statement of Ms. Simek follows:]

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    Chair Landrieu. Well, thank you. I am very impressed with 
your testimony. You gave quite a few specifics and we 
appreciate it and thank you very much.
    And Ms. Castro, we are happy to have you, and you can 
explain the Export Trading Company, of which you are one, and 
welcome.

 STATEMENT OF WILMA CASTRO, OWNER, INTERNATIONAL EXPORT SALES 
L.L.C., ON BEHALF OF THE LOUISIANA DISTRICT EXPORT COUNCIL, ST. 
                        ROSE, LOUISIANA

    Ms. Castro. Thank you, Senator Landrieu, for the 
opportunity to testify as part of this panel. Export sales have 
meant a great deal for my company and my family and I look 
forward to telling you a bit of my experience.
    I got into the export business over 15 years ago and I can 
truly say that every day has been a learning experience. 
Selling internationally isn't easy. One of the keys to my 
success has been learning about the resources that can help 
small companies like mine export profitably.
    My experience in the international business started in my 
native Honduras, when I marketed products from Honduras to 
Europe and the U.S. Years later, I came to America and I 
started selling supermarket equipment overseas with 
Interamerica Sales. Next, I worked as an executive sales 
representative for Albert Rebel and Associates out of 
California. I managed their New Orleans branch until the year 
2000, when I decided to start my own company. Relying on the 
experience in the supermarket supply industry, I decided to 
create a business based entirely on sales to Central, South 
America, and the Caribbean.
    International Export Sales is classified as an Export 
Trading Company which specializes in the purchase and resale of 
U.S.-manufactured equipment, commercial refrigeration and light 
industrial refrigeration equipment to Latin America and the 
Caribbean. We offer our customers everything from shopping 
carts to freezer display units and many things in between. We 
maintain customer relationships with over 100 international 
clients comprised primarily of foreign supermarket chains, 
resellers, and distributors.
    Our staff has over 20 years of experience in the export 
business. Even so, I find that it always pays to know outside 
experts who can help us in tricky situations. One of the 
wonderful things about being an entrepreneur in the U.S. is the 
wide array of government resources to help companies sell 
internationally. I have used a number of these. Today, I would 
like to talk in particular about the U.S. Commercial Service 
and the Ex-Im Bank.
    I always say that customer service is the cornerstone of 
our business. In fact, our desire to better serve our customers 
is what led us to work with Ex-Im Bank in the first place. We 
currently have an export credit insurance policy with Ex-Im. 
This allows us to extend better terms of credit to our buyers 
and limit risk to our small company.
    In today's competitive global economy, I have found that 
deals can be won and lost because of financing. We have 
increased our sales by providing open account terms to our best 
international customers. For example, just a few months ago, we 
won a major sale in Honduras with the help of Ex-Im credit 
insurance simply because we were more competitive because of 
this resource.
    I would also like to talk about the assistance we received 
from the U.S. Commercial Service. For years, I have relied on 
the New Orleans U.S. Export Assistance Center for market 
research, trade leads, help with export documentation, and 
contacts in international markets. These trade leads are very 
specific and actionable opportunities generated by the U.S. 
Commercial Services staff in U.S. embassies overseas. Timely 
information like that is a huge help in our marketing efforts.
    On several occasions, the Export Assistance Center has been 
instrumental in helping us close a deal. For example, recently, 
we had a potential customer from El Salvador who contacted the 
Export Assistance Center to verify that we were a reliable 
supplier. The Export Assistance Center staff were able to 
immediately verify that they knew us, they knew me personally, 
and had even visited our company over the years. With that 
assurance, we got the sale, so it does help.
    I am also grateful to the U.S. Department of Commerce for 
establishing the Louisiana District Export Council, or DEC. The 
DEC serves as something of an advisory board for the Commerce 
Department. Its membership includes exporters like me, trade 
association representatives, Federal, State and local export 
assistance specialists, and service providers like attorneys, 
bankers, and freight forwarders. I am honored to be a member of 
the Louisiana DEC.
    Together, our members have over 100 years of hands-on trade 
experience. We act as mentors to new exporters in our State and 
work with the U.S. Export Centers to develop outreach and other 
programs. This year, we embarked on an inclusive planning 
process to identify five core objectives for our DEC. Members 
volunteered to staff subcommittees to work on action items for 
each objective. One of these is a Louisiana Exporters' Resource 
Guide, about which we just met this morning.
    My fellow DEC members also are wonderful resources for me 
personally. We share ideas, challenges, and best practices. We 
get together quarterly to discuss new trade trends and other 
developments. It is nice to be part of an exporting community.
    Finally, I should note what a big help the Central America 
Free Trade Agreement has been to our company. Free Trade 
Agreements like this one make our products more competitive. We 
see a direct result between CAFTA and increased sales in 
Central America. I encourage the Congress to work towards the 
passage of other trade agreements, such as Colombia and Panama.
    Before I close, I want to thank Senator Landrieu again for 
asking me to testify before this committee. I gained my U.S. 
citizenship last November and I am honored to be recognized for 
my company's success and to represent American entrepreneurs 
everywhere. Thank you.
    [The prepared statement of Ms. Castro follows:] 

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    Chair Landrieu. Thank you. We are very proud to have you as 
a new citizen of our country. Thank you for your contribution.
    Mr. Hingle.

STATEMENT OF JERRY HINGLE, EXECUTIVE DIRECTOR, SOUTHERN UNITED 
                    STATES TRADE ASSOCIATION

    Mr. Hingle. Thanks, Senator. I really appreciate being part 
of today's discussion. Again, I am here with the Southern U.S. 
Trade Association. We are a nonprofit trade association based 
here in New Orleans that helps companies export, small 
companies primarily. We are based here in New Orleans, but we 
do help companies throughout the Southeastern United States. I 
am going to talk a little bit about the program, who we are, 
and also highlight the Federal Market Access Program as a 
resource that is available to small businesses looking to 
export.
    Our agency has helped thousands of organizations tackle 
international markets around the world. We help companies in 
many ways. We talked about training. We help small companies in 
training, one-on-one, go to their place of business, coach them 
how to export. We coordinate a number of trade events around 
the world, trade shows and buyers' missions around the world. 
We sponsor their participation in those events.
    I am sure you recognize some of the Louisiana products 
here. They are known here locally, rice, Zapp's potato chips, 
sauces. They are known very well here and increasingly known 
around the world thanks to their involvement with our programs. 
All of these products here, we have helped promote abroad their 
brands. The Department and the Market Access Program, in a 
number of countries around the world, and increasingly even in 
places, India and Japan, buying these products on the shelves 
or in the restaurants. It is really quite a sight to see.
    The testimony that I turned in has 20 companies listed we 
have worked with over the last couple of years. You probably 
recognize quite a few of those companies. Our work is funded 
mostly by the Market Access Program, or MAP. This is 
administered by the USDA's Foreign Agricultural Service. It was 
launched about 20 years ago with the intent of helping farmers 
and food producers export. There are about 70 groups that 
partner with USDA to help thousands of companies across the 
U.S. export.
    We are all nonprofits, and one of the kind of things of the 
MAP program's Branded program, where we extend funds directly 
to companies that go off and promote their brands overseas, and 
we will reimburse them at half of their cost of doing so, 
qualified cost, qualified number. It has to be a small 
business. It has to be at least 50 or more percent of U.S. 
origin, et cetera.
    In our region of the U.S. alone, there are hundreds of 
companies that are now successful exporters as a direct, 
attainable result of their work with us and MAP program. Just a 
few years ago, these companies never even considered exporting. 
We can help you get there.
    Research commissioned by the USDA proves the program works. 
Their research says that for every dollar that is in export 
promotion, some $25 in export sales typically occur through 
seven years after the fact. In our own research, we asked the 
folks who take part in our programs. Almost immediately, we are 
seeing a $22-to-$1 return, I guess you would say. For every 
dollar we invest in these companies in finding buyers overseas, 
we are seeing a $22 return, so just right there.
    On the macro scale, the U.S. spends about $235 million on 
these programs. MAP is about $200 million each year. It has a 
sister program, about $35 million. Our competitors--the 
European Union, Canada, Australia, South Africa, the big 
players out there--combined spend $1.2 billion every year to do 
the same thing. That is five times our annual budget to help 
companies export. And we are losing ground to a lot of these 
competitors in key markets.
    The 2008 farm bill, sadly, OMB has proposed a 20 percent 
cut in the program, from the current $200 million by 20 
percent. There appears to be some confusion. I think that there 
is belief that it benefits large companies, but by definition 
is only for and by the small companies. There is confusion 
there, and they do cite some arguments that this is 
specifically rejected on many House and Senate floor votes over 
the past 15 years. So there is a lot of confusion over the 
program in Congress. I think there is some confusion right now 
for next year.
    We know the program works well. We know for a fact that 
users out there, hard data and anecdotal, the information we 
know of is that the program works well, and we think it aligns 
perfectly with Washington's goal to create jobs locally and 
build sales and jump start the economy. We know that it is 
helping create local jobs as well as generating sales 
internationally.
    So we are urging Congress to keep the program as it is, 
intact as written. Basically, it is not broken, so let us not 
try to fix it.
    [The prepared statement of Mr. Hingle follows:]

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    Chair Landrieu. Thank you very much. It has been very 
helpful.
    We have got a few minutes for questions, and let me, if I 
could, Mr. Hingle, start with you. I am very interested in this 
particular program and its applications, of course, coming out 
of the Agriculture Department, but many have applicability 
throughout what the subject of this hearing is today, 
particularly on the training and outreach, recruiting 
opportunities, et cetera. We are learning how the mark program 
was started. Was it a Congressional authorized program or was 
it something started either with or adjacent to the Agriculture 
Department? Remind me of that.
    Mr. Hingle. Its origins were within USDA. I can't speak to 
the whole issue of it. I can certainly find out for you.
    Chair Landrieu. That is okay. Staff will check on it, 
because I am very interested in that particular model, and if 
the staff has any information, you can slip me a note about it. 
But I think that it is an excellent model, and, of course, 
representing a State that has a strong agricultural base, I am 
very familiar with the opportunities and the pressure from the 
farmers who are looking for other markets for their products. 
It is very, very important, and, of course, they are pretty 
much front and center on some of these trade agreements. But 
the finished products are not just the crop itself or the 
commodity itself. It is also interesting in the way you have 
outlined how that program works, so we will follow up.
    Let me ask each of you all, and some of this is in your 
testimony, which was excellent, for the record, but if you had 
to, starting with you, Mr. Schreiber, say one change that you 
would recommend at the Federal level, just one change that you 
would recommend that might really help to increase the number 
of small business exporters, what would that one change be?
    Mr. Schreiber. Well, I will reiterate. In real estate, it 
is always location, location, and location. For me, after many, 
many years of this, I have concluded it is all about training 
and planning your export future. That isn't done by hardly any 
companies. They jump into it. They say, well, it is just like 
the U.S. I will go over there, or Canada. I will start selling. 
And I see examples of companies lose their shirt or lose their 
company because they made a mistake that would not have cost 
them one penny to eliminate if they had simply been trained 
properly.
    Now, the training is tedious and dry. I won't say boring. I 
think it is very exciting. But it is dry. But if you don't have 
the vocabulary, if you don't have these rules and regulations--
we know how many rules and regulations there are in our 
country. Well, multiply that by 200 countries around the world.
    So I think it is this basic training that we always pawn 
people off to somebody else. Oh, go see so and so, or go see 
the freight forwarder. But not many organizations, and that is 
especially true in Louisiana, which I am very familiar with--it 
is not being done sufficiently in Northern Louisiana because, 
compared to a shopper who doesn't travel now because of 
restrictions, I am not sure in Northern Louisiana who is doing 
that nitty-gritty training of the forms, not the programs that 
are out there, but how do you--what do you actually do.
    Chair Landrieu. Ms. Simek, what would you say? Do you agree 
with that, and if so, you can expand. But if you don't, what is 
the one thing you would change?
    Ms. Simek. I truly believe that we do a very poor job 
throughout the entire country, including Louisiana, in teaching 
people about entrepreneurship. So it goes beyond the training. 
We are still--continue through our educational system to train 
people to work for a General Motors. If you look at where we 
are, we don't--and as part of the entrepreneur--I would love to 
see entrepreneurial training and more respect for the small 
business people. And in part of that, we need to talk about the 
export, the potential.
    The United States has always been a country that was so 
lucky because we had such a large population, we didn't have to 
export. If you wanted to export to Europe, you had to do it 
individually, France, Netherlands, whatever. Now, they have got 
the EU, so now they are competing with us and we don't know how 
to do this.
    And so we need to get classes back into the universities, 
if nothing else. We need to have some classes that are not 
through a counselor, but through a course that we should have, 
and we don't have that now. And maybe that would be beyond the 
entrepreneurship, but just have something that focuses in on 
teaching people how to--all the things that are involved in 
exporting.
    Mr. Schreiber. The universities do not teach this, by the 
way.
    Chair Landrieu. Well, I was sitting here thinking of our 21 
universities that we have, Mr. Cravins? I think we have 21 
Louisiana universities, as I recall, and it would be 
interesting to follow up on that.
    Ms. Castro, what do you think the one change could be and 
do you agree that this training is a component, and also--three 
questions for you--how did you train? And use the microphone, 
if you would.
    Ms. Castro. Okay. I was hearing what they were saying. I do 
100 percent of my business is overseas. What can I say about 
how to train or what is the requirement or--I don't know. I 
believe in traveling, but to travel, you need to have a 
contact, right. So I guess my contacts have been through word 
of mouth from one customer who you are doing business and 
becomes one.
    Right now, I don't know how to think or what to do or say 
about how to train them, because I have had all kinds of 
experience. Experience is open and counts as real, whether it 
is Ex-Im Bank experience--and actually sitting here right now, 
I have supermarkets asking me to get store resources from 
Louisiana distributors of food, that they want to import in 
Central America. Why? In Miami, they get all the business. But 
Miami knows it and the prices are not very competitive. So 
actually there is a big company called Napco. I have been 
training him, and I brought him customers. I sell the 
equipment. I brought him the customers for him to--I mean, 
well, we did it like a deal, but it is a way to start. He 
doesn't know how to start. So I said, okay, my job here in this 
case in the supermarket is selling equipment. I bring him 
customers. Now, in their case, they want to learn how to--say 
exposure, I guess, how to do it, how to get a contact.
    What are the steps of the process? I would say the first 
thing you do is I believe in those trips that are organized by 
the----
    Chair Landrieu. Chamber of Commerce sometimes, and others.
    Ms. Castro. So you go to the company, country, and it is a 
good point to start, because there you meet what they want, one 
to one. Later, somebody asked me what is the risk. Well, 
everything in life has a risk, but if you insure your product, 
the risk is----
    Chair Landrieu. It can be minimized.
    Ms. Castro [continuing]. Minimized. But it is never--to me, 
it is very important you face and you see the firms. It is very 
important.
    Chair Landrieu. Mr. Hingle. I hope that you all have gotten 
some good ideas together, that you all can exchange cards or we 
can expand opportunity right here. That is one of the real 
benefits of these forums. Go ahead, Mr. Hingle.
    Mr. Hingle. More broadly is collaborational outreach. I 
think that is the biggest challenge that we see right now. We 
heard a lot earlier today about needing collaboration, 
collaboration, collaboration. Well, I have two full-time staff 
who are out there knocking on doors every day, trying to find 
new companies to take on the programs. SBA does the same, my 
dear friends, doing the same, trying to make more companies 
aware of programs that are out there. And we are all out there 
doing this. We are all out growing, but we are in the same 
boat. And I think that the training is one of the many 
components that we can offer these companies. Some are very 
senior and seasoned exporters already simply need our 
assistance by the way of export promotion or finance.
    So I would say that is the biggest challenge we face right 
now. I would like to see more collaboration on the outreach 
efforts, among all the different agencies we talked to today.
    Chair Landrieu. Okay. Let me ask this. Ms. Castro, you 
mentioned the travel is very, very important. You discussed how 
the U.S. Commerce Export Assistance Center was helpful in 
bringing businesses or individuals overseas. The annual budget 
for this program has gone down over the years. What would you 
say to members of Congress--and you sort of said this, but I am 
going to give you an opportunity again--what would you say to 
the members of Congress that want to either eliminate or reduce 
this program, and how important is it, do you think, for small 
businesses to be able to meet face to face to begin to develop 
relationships that might result in business trade and export?
    Ms. Castro. I think that it should continue this program, 
because not only that--there is a recession in this country. I, 
on the other hand, have no problem. I mean, my business is 
overseas. If what happened is overseas--of course, I work with 
the Caribbean a lot and Central America. When the U.S. has 
going down, like right now, the equipment, the metal, okay, so 
what these companies do overseas is they start to see the 
opportunity to buy----
    Chair Landrieu. To buy it at a lower price.
    Ms. Castro. So that is when my----
    Chair Landrieu. Your business increases.
    Ms. Castro. It increases. Everybody says to me, do you have 
it? I have the money--because a lot of them, the problem is 
that they--the Ex-Im Bank, it is good, but at the same time, 
the paperwork is so tedious. My people, I have full time, and 
they take so long. So the only one that I have finally made a 
deal was for $1,100 and we got it quick. But there are a lot of 
people right now interested in the--and come back to, I want to 
promote over there. But yes, the business overseas, there is a 
demand.
    Chair Landrieu. Well, let me tell you, one of the things 
that I want to do is do an informal roundtable with the Ex-Im 
leadership. I mean, Fred was here, but we need to do--and he is 
still here? Fred? Good, you are listening to this. I would like 
to do an informal roundtable with some of these business owners 
so that they can really talk specifically with the 
Administrator about how to reduce this paperwork associated. Of 
course, you know, we have an obligation to the taxpayer to 
verify and we have to be careful when we are lending taxpayer 
guarantee because taxpayers like to be repaid in full with 
interest, if appropriate. But given that, I think there are 
some excellent examples that you shared with your own company 
and we are proud to see companies like this growing.
    Let me see if we have a question for the entire panel. The 
SBA's core programs include both lending and counseling, and we 
are considering giving the SBA a more robust role in export 
promotion. Now, the Department of Commerce primarily has the 
leadership. We have talked a lot about coordination. But would 
any of you want to make any suggestions in terms of the SBA 
network, how maybe it could better serve this export 
opportunity for small businesses? Mr. Schreiber.
    Mr. Schreiber. I would rather not comment on it, because I 
am not in the bureaucracy. What I would say because I am 
outside the bureaucracy, and the members of the World Trade 
Center are, I don't really care who does the work as long as 
they do it well. And that is not only coordination, it is 
hiring good people. In life, I mean, the greatest game plan in 
the world might not be successful because you don't have a 
terribly capable person doing it.
    So I guess we sort of look to you, the oversight in 
Congress and the leaders who spoke here today of those agencies 
to work out the details and deliver a product that is 
understandable and usable and logical. But we don't really get 
into the TPCC or whatever. Most of us have no idea what they 
mean, what they talk about, but we know that it is important. 
But we are down at the working level, I am afraid, and just 
want to see the results.
    Chair Landrieu. Very good point.
    Ms. Simek.
    Ms. Simek. I know that the SBDCs have annual meetings where 
they are trained. Rather than trying to train them in 
exporting, because as you say, it is very difficult, and 
truthfully, when we exported, we went to the freight 
forwarders. We found somebody else. But what I would suggest is 
that they get an overview of what it is that the other 
exporting agencies do so they become very familiar, and then 
you have resources. Rather than them trying to counsel a small 
business that manufacturers food products, get them in contact 
with the FAS program, the SUSTAs.
    And so that is what I would strongly suggest, is that there 
is better coordination, better information, better training 
than just the SBDC center, than trying to put an export 
consultant in each one of their offices. I don't see how they 
could afford it, because you are going to end up with--the 
quality is going to be different, and so depending on where you 
live, on each State, you are going to get better or worse. So I 
think we already have a very good network, and truthfully, the 
DECs are great resources. Let us see how we can use them. Let 
us see if we can't get all these organizations actually 
honestly working together for the betterment of the companies 
and for the nation.
    Chair Landrieu. Thank you so much.
    Our time for adjournment is near. I want to just say a few 
closing comments. One, I hope that you will all pick up the 
Guide to Louisiana Small Business. Our office is proud to have 
produced this. We will be producing it in Spanish, based on a 
comment from the Hispanic Chamber this morning. But it is our 
attempt to at least put all of the Federally supported and some 
State-supported entities that deal with small business on one--
in one document with websites attached, and we are going to do 
our best from our committee to really have the Federal 
Government coordinate, not only better to itself with quality 
programming and aggressive outreach, but coordinating with the 
State level and local level and nonprofits to really create a 
country of entrepreneurs and a country of entrepreneurs capable 
of export.
    And where we believe--I believe, I should speak for 
myself--I believe that the road out of this recovery is going 
to be led by small business and they are going to have to find 
opportunities, whether in the 50 States, the economy of the 50 
States, but also try to find opportunities in the world 
economy. And there is no reason that the government can't do a 
better job, with new technologies and emerging technologies, 
exciting opportunities. The world is truly becoming smaller and 
I just think that they need a little more focus and work.
    That is what our committee is charged, and one of my 
visions. I share that with my Ranking Member, Olympia Snowe. I 
want to recognize that her senior counsel is here, Mr. Wally 
Hsueh. Would you stand, Wally? Wally is in the back, and we 
appreciate the Republican Staff Director being present. We work 
in a very bipartisan fashion on this committee.
    I want to thank my State staff and Don Cravins, my Staff 
Director. He and his staff have organized two very productive 
days in the city, in the region today. We had a reception last 
night. We had standing room only. This morning, hundreds of 
small business owners showed up at the University of New 
Orleans for a general small business outreach conference. Then 
we did a tour of Lakeview, of the Lower Ninth Ward, of the 
Upper Ninth Ward, visited with business owners on the ground, 
conducted this hearing, and we are ready to stop working for a 
few minutes.
    Go ahead, Mr. Schreiber.
    Mr. Schreiber. Senator, can I make one important point, and 
you are very aware of this point. We want to thank you, 
Senator, for your leadership last year with the entire 
Louisiana delegation on an important matter related to CAFTA, 
the Dominican Republican CAFTA Free Trade Agreement. We hope 
you will follow up--I don't know if he is here--with Ambassador 
Kirk, because you crafted, you and the delegation, a joint 
letter that went to President Bush requesting that the 
administration consider New Orleans as a site for meetings and 
negotiations under the CAFTA agreement.
    There isn't a Secretariat of CAFTA, and so the thought here 
was, and by you, to, well, let us make New Orleans the de facto 
Secretariat by holding these negotiation meetings and other 
events that they hold, instead of always meeting in Washington 
or in the respective countries, get out of Washington, and not 
only would New Orleans be the perfect location for reasons we 
all know, but it has been demonstrated. Last year, in fact, the 
day you wrote that letter that you and the delegation did to 
President Bush, he was here with the President of Mexico and 
the Prime Minister of Canada at the Summit of the Americas. And 
previously in the negotiations--this was seven or eight years 
ago--New Orleans was one of the cities selected for 
negotiations under CAFTA.
    So what a perfect location and helping in the recovery 
process and combining it with tourism, economic development, 
and business. And let us face it. We know that the Latin 
Americans, the Central Americans, will love New Orleans and 
would jump to come here. So we request your further leadership 
with Ambassador Kirk and the administration following up on 
this.
    Chair Landrieu. Thank you. Excellent suggestion.
    Is there any further business? If there is no further 
business, meeting adjourned.
    [Whereupon, at 3:05 p.m., the committee was adjourned.]
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