[Senate Hearing 111-505]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-505

 
                        A WORLD OF OPPORTUNITY:
                      PROMOTING EXPORT SUCCESS FOR
                   SMALL AND MEDIUM-SIZED BUSINESSES

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

                                HEARING

                               before the

   SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 6, 2009

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation













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        SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            JOHN ENSIGN, Nevada
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 GEORGE S. LeMIEUX, Florida
CLAIRE McCASKILL, Missouri           JOHNNY ISAKSON, Georgia
AMY KLOBUCHAR, Minnesota             DAVID VITTER, Louisiana
TOM UDALL, New Mexico                SAM BROWNBACK, Kansas
MARK WARNER, Virginia                MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                   Bruce H. Andrews, General Counsel
             Ann Begeman, Acting Republican Staff Director
              Brian M. Hendricks, Republican Chief Counsel
                                 ------                                

   SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION

AMY KLOBUCHAR, Minnesota, Chairman   GEORGE S. LeMIEUX, Florida, 
JOHN F. KERRY, Massachusetts             Ranking
BYRON L. DORGAN, North Dakota        JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri           JIM DeMINT, South Carolina
TOM UDALL, New Mexico                JOHN THUNE, South Dakota
MARK WARNER, Virginia                SAM BROWNBACK, Kansas
MARK BEGICH, Alaska                  MIKE JOHANNS, Nebraska

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 6, 2009..................................     1
Statement of Senator Klobuchar...................................     1
Statement of Senator LeMieux.....................................     4
Statement of Senator Johanns.....................................     5
Statement of Senator Begich......................................     6

                               Witnesses

Rochelle A. Lipsitz, Acting Assistant Secretary for Trade 
  Promotion and Director General, U.S. and Foreign Commercial 
  Service, International Trade Administration, Department of 
  Commerce.......................................................     8
    Prepared statement...........................................    10
Alice P. Albright, Executive Vice President and Chief Operating 
  Officer, Export-Import Bank of the United States...............    15
    Prepared statement...........................................    17
Liz J. Reilly, Director, TradeRoots, U.S. Chamber of Commerce....    18
    Prepared statement...........................................    20
Tom J. Wollin, Director, International and Government Sales, 
  Mattracks, Inc.................................................    24
    Prepared statement...........................................    27
Bradley E. Pierce, President, Restaurant Equipment 
  WorldTM (A Pierce Sales Co., Inc.)..................    29
    Prepared statement...........................................    31

                                Appendix

Hon. John D. Rockefeller IV, U.S. Senator from West Virginia, 
  prepared statement.............................................    47
Response to written question submitted by Hon. Tom Udall to Liz 
  J. Reilly......................................................    47


                        A WORLD OF OPPORTUNITY:



                      PROMOTING EXPORT SUCCESS FOR



                   SMALL AND MEDIUM-SIZED BUSINESSES

                              ----------                              


                        TUESDAY, OCTOBER 6, 2009

                               U.S. Senate,
  Subcommittee on Competitiveness, Innovation, and 
                                  Export Promotion,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Amy 
Klobuchar, Chairman of the Subcommittee, presiding.

           OPENING STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. I'd like to call the Subcommittee to 
order. I want to thank everyone for attending this important 
Subcommittee meeting today.
    And before we get started, I wanted to welcome my new 
Ranking Member on this Subcommittee, George LeMieux from 
Florida. And I look forward to working with him on a wide range 
of issues, including the important topic of export promotion, 
as well as tourism, which we cover in this Subcommittee, which 
I somehow think is really important to Florida. Is that right?
    Senator LeMieux. Yes, it is.
    [Laughter.]
    Senator Klobuchar. So, I'm going to introduce each panelist 
after the opening remarks. I would like to thank the staff of 
the Subcommittee and the Commerce Committee that worked on 
this. If you notice, they have these little buttons on, that 
they got from Minnesota when they visited a tourism hearing in 
Duluth, that say, ``You betcha.'' So, there we are.
    And I would also note that I scheduled this hearing to be 
sandwiched between the Vikings' victory over Green Bay, that 
I--right, Mr. Wollin?--I was there last night.
    Mr. Wollin. Yes.
    Senator Klobuchar. Yes. And then the Twins-Tiger game this 
afternoon, which is a huge tiebreaker, which starts at 4 
o'clock. So, it's very good timing.
    Now, I'm going to introduce each panel member, after 
Senator LeMieux and I speak, and I wanted to, though, first 
extend my warmest welcome to Mr. Wollin--Tom Wollin--from 
Mattracks, Inc. I actually learned about his company because I 
made a pledge that I would visit every county in my State every 
year. That would be 87. I wouldn't suggest doing that, 
necessarily. But, because of that I was able to visit his great 
company in Karlstad, Minnesota, population 900, and it's called 
``The Moose Capital of the North.'' It produces--Mattracks 
produces removable rubber track systems for four-wheel-drive 
vehicles, and these track conversion systems help turn a 
regular four-wheel-drive vehicle into something like a tank, 
allowing the truck or car to go anywhere and do anything. And I 
had an amazing tour, which--they took me up a hill and down, 
and I thought I was never going to return from that county on 
that day.
    And Tom will tell his story, but I think it's worth 
pointing out that, when Tom got to Mattracks in 2000, only 15 
percent of Mattracks sales were outside the U.S. and Canada. 
Today, under his leadership and with assistance from the 
Commerce Department, international business comprises more than 
50 percent of Mattracks' sales, and now Mattracks sells its 
track-conversion systems to Russia, Chile, Kazakhstan, and 
Turkey, and around 50 other countries on seven continents. As I 
like to say, Tom helped Mattracks go from Karlstad to 
Kazakhstan. There you are. It was kind of good. That didn't 
quite work with the words.
    And so, I look forward to hearing Tom's testimony, as well.
    Now, we have an important national interest in promoting 
exports by our small businesses. Access to new markets can make 
the difference between expansion and stagnation of a new and 
developing business. And at a time when our economy is 
experiencing problems, it's more important than ever to make 
sure that businesses know about all potential opportunities 
available to them.
    Today we'll examine the success that a number of small 
businesses have had entering export markets throughout the 
world. We'll also highlight how small businesses benefit from 
efforts by U.S. Government agencies to promote American 
products and business abroad. And finally, we'll look at what 
works and what doesn't work in export promotion, and how we can 
make the Federal Government's efforts more effective for small 
business.
    Currently, the U.S. derives the smallest percentage of our 
GDP from exports, compared to other major countries. America 
has always been the world's customer, buying our way to huge 
trade deficits. But, it's clear that exports will increasingly 
be important to our economy as people in China, India, and 
other developing countries gain purchasing power and they 
become our potential customers.
    In fact, more than 95 percent of the world's customers are 
located outside the United States, so it only makes sense to 
reach out. More exports will mean more business, more jobs, and 
more growth for the American economy.
    Exports are also important for small business for several 
reasons. First and most obviously, exports allow a company to 
increase its sale and growth business. Second, a diversified 
base of customers helps a business weather the economic ups and 
downs. Also, businesses that export grow 1.3 percent faster, 
and they're nearly 8.5 percent more likely to stay in business 
than companies that don't export. In addition, the annual job 
growth rate of exporting companies has traditionally been 2 to 
4 percentage points higher than their nonexporting 
counterparts. And these jobs pay 13 to 18 percent more, on 
average, than nonexport-related employment.
    So, there is a world of opportunity out there, and it's 
worth it for our businesses to go out and seize these 
opportunities. But, fewer than 1 percent of all American 
businesses export overseas. Fewer than 1 percent. And of those 
that do, nearly 60 percent sell their products only to one 
foreign country, typically Canada or Mexico.
    Of those firms that don't export overseas, 30 percent have 
indicated that they would consider exporting if they had more 
information about how to do it. So, that's 30 percent of our 
businesses that would like to export, but need more 
information, and need a guide of how to do this.
    For these American businesses, the world looks like one of 
those ancient maps that contains only the outlines of the 
continents and a few coastline features, but the rest of it is 
blank space and a few vast unknown, unexplored territories. 
They know something's there, but they don't really now how they 
can find it.
    Fortunately, as we hope to hear today, there is help 
available. There are a number of Federal agencies, such as the 
Commerce Department and the Export-Import Bank, that assist 
U.S. companies in promoting their products abroad. They have 
expertise and experience to help small businesses navigate 
their way into these export markets, sometimes even matching up 
companies and markets like a trade-related Match.com.
    In effect, their job is to--that was pretty good.
    [Laughter.]
    Senator Klobuchar. Maybe you guys could use that as a 
marketing thing, ``trade-match.com.''
    In effect, their job is to fill in the blank spaces on the 
map, to help American businesses recognize the export markets, 
to help them understand the lay of the land, and to guide them 
as they search out the best opportunities. But, the 
overwhelming majority of small businesses, even those that want 
to export, don't know about the export-promotion services 
offered by our Federal agencies, and they don't know where to 
begin in order to make best use of those services. These 
agencies need to do a better job of informing small businesses 
about export opportunities and letting them know about the 
valuable assistance that's available to them.
    Many other countries take export promotion more seriously 
than we do. Countries like Spain, the United Kingdom, Italy, 
France, Korea, Canada, and Japan all spend more on export 
promotion than we do in the United States. But, this isn't just 
about money. We need to find out what really works, and what 
doesn't, in export promotion. We need to find out whether all 
of these Federal agencies are working together effectively, or 
whether they're unnecessarily duplicating services, maybe even 
working at cross purposes. And we need to see how well they're 
coordinating their activities with the export promotion efforts 
of our 50 states.
    Given the importance of exports to our national economy, 
both today and in the future, we need to make sure we're doing 
all we can to promote American businesses in foreign markets, 
especially small businesses. There are literally tens of 
thousands of American businesses that have the potential to 
export, and would like to export, but they don't know how to do 
it. Today I hope we can begin the process of giving them those 
tools. A world of opportunity is waiting for them.
    So, I thank our witnesses. Mr. LeMieux and Mr. Johanns--
Senator Johanns has also joined us--they will speak, and then 
we'll introduce the witnesses.

             STATEMENT OF HON. GEORGE S. LeMIEUX, 
                   U.S. SENATOR FROM FLORIDA

    Senator LeMieux. Thank you, Madam Chair. I look forward to 
serving on this Committee under your leadership. I know that 
we're going to talk about important issues, but also enjoy 
ourselves while doing it. And I appreciate the folks that are 
here today to talk to us on the panel.
    As Americans, we can take pride in knowing that we are the 
world's largest exporter and that we have the most productive 
work force, but certainly we can do more. Our role as a global 
leader is not guaranteed, which is why finding ways to maintain 
our status as one of the most productive economies in the world 
should be one of our primary focuses.
    The Federal Government can play a pivotal role in 
supporting the private sector's efforts to reach customers in 
markets abroad. And this is not a partisan issue. It's an issue 
that both Democrats and Republicans can agree upon. This means 
supporting Americans through coherent, cost-effective, and 
performance-based initiatives.
    Today we're going to hear from a number of witnesses with 
an interest in global trade. One includes the President of a 
Florida restaurant equipment supplier who has expressed his 
desire for support to broaden his business overseas market 
share. And I believe his situation will be one that you find 
typical. He's having good success doing what he's doing, but he 
needs more information from its--his government, and more ways 
to help in his endeavors overseas.
    Americans are looking for ways to grow their businesses and 
to find new customers, especially given the state of today's 
economy. This program exists but many Americans simply do not 
know where to go to find the information they need. We should 
take every opportunity to support America's exporters, because 
they sustain such a large portion of our economy; not just 
large multinational corporations, but also the local businesses 
which serve as pillars of our communities.
    Florida has the fourth largest gross domestic product in 
America, and the highest trade surplus of the 50 states. To put 
it bluntly, trade matters in Florida. We are the gateway to 
Latin America, and we are a recognizable trade destination 
around the world. Florida's share of small and medium 
businesses is nearly three times the national percentage, and 
more than 95 percent of our exporters are small or medium-sized 
businesses with 500 or fewer employees, which make up a part of 
the 1.9 million small businesses in the Sunshine State. More 
than 43,000 Florida companies export their goods and services, 
and they employ nearly 600,000 Floridians. And in 2008, exports 
in Florida reached a record $54.3 billion, and--export market 
is really one of the true pillars of our Florida economy, and 
therefore Floridians have a tremendous stake in the global 
market. So, we're going to talk today about providing better 
information and better communication with our businesses so 
that they can export more.
    But, another way that we can immediately increase our 
number of exports would be to swiftly adopt the pending trade 
agreements with Colombia, Panama, and the Republic of Korea. 
According to the Latin American Trade Coalition, in 2008 more 
than 6,000 small and medium-sized American businesses exported 
to Colombia. As the gateway to Latin America, that is a 
wonderful potential trading opportunity for Floridians and 
Americans alike. If Congress were to pass the Colombia Trade 
Agreement, more than 80 percent of U.S. consumers' and 
manufacturing products, and most U.S. farm goods, would enter 
Colombia duty-free. More exports, more jobs for Americans. The 
Colombia agreement, along with the Panama and the Republic of 
Korea agreements have been pending for too long. And I would 
urge the President and the Congress to take up their prompt 
consideration.
    I look forward to discussing these issues today, and other 
trade-related issues, with our witnesses, and I thank you for 
joining us. I look forward to your testimony and look forward 
to, and welcome--my friend from Florida--Mr. Pierce, look 
forward to hearing from him.
    Thank you, Madam Chair.
    Senator Klobuchar. Well, thank you very much.
    Senator Johanns?

                STATEMENT OF HON. MIKE JOHANNS, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Johanns. Thank you very much. I will speak very 
briefly, because, actually, Senator LeMieux just talked about 
what I wanted to talk about in my opening statement.
    As a former Governor who did trade missions--and oftentimes 
we would fill those trade missions with small companies who 
were looking for the opportunity to expand international 
sales--and as a former Secretary of Agriculture who was 
responsible for agricultural trade in the last Administration, 
I can tell you there are some things that work; they're tried 
and true. One is face-to-face opportunities. If you can get the 
Governor to go into a area and you can open up doors and you 
can have business roundtables and all of those opportunities, 
it almost always results in expanded trade opportunities.
    But, the second piece of this is, you have to have the 
trade agreements in place to allow the trade to occur. I must 
admit, I am absolutely mystified as to why these three pending 
trade agreements have not come to the Senate and the House for 
debate and for a vote.
    Second, I am absolutely mystified as to why the President 
of the United States wasn't here, the first day, to ask for 
trade promotion authority. And here's the significance of that 
issue. I participated in the Doha Round while I was the 
Secretary of Agriculture. There is a point in time through 
negotiation when all the cards are laid on the table, when the 
other side has said, ``Look, here's what we can do, Mr. 
Secretary,'' and we have said, ``Here's what we can do,'' and 
then you shake hands and you have a trade agreement that 
eventually is embodied in writing.
    Now, no country is going to get to that point--having 
played all of their cards, laid out everything--if they know 
that they are now headed toward a confirmation process for that 
trade agreement that would involve every member of the House of 
Representatives who wants to amend it or change it or tweak it 
or whatever, and every member of the U.S. Senate. So, 
consequently, because of the fact that this President hasn't 
asked for trade promotion authority, quite honestly, there 
isn't any possibility whatsoever that there'll be another 
bilateral trade agreement.
    Now, the difficulty for me, or for any of the Senators on 
this panel, is this. Somebody else is going to sell their ag 
products to these other countries. It is just simply going to 
happen. If we don't want to do business with Colombia under the 
trade agreement, some other country will. There are trade 
opportunities out there that we aren't even negotiating today, 
because they aren't going to go anywhere if the President 
doesn't have trade promotion authority.
    So, I'm anxious to hear about all the programs. I've used 
those programs. I have found, in my personal experience, the 
Federal Government to be a great partner when I was a Governor. 
We would always rely on our embassies, and our ag attaches, and 
all of the resources that were available, and we would help 
small companies. But, I hope we don't forget the bigger picture 
here. We can't vote on a trade agreement until it's submitted. 
And I don't get why these aren't being submitted. They're 
either going to get a ``yes'' vote or they're going to get a 
``no'' vote, but we should have the right to cast that vote.
    The second thing is, I must admit, I don't get it. I don't 
understand why this Administration isn't asking for trade 
promotion authority. And if they're looking for a Republican to 
get behind that, to get it done, I volunteer. I will do 
everything I can to give the President that authority, because 
I think it's enormously important.
    So, with that, I feel very, very strongly about this. Every 
weekend that I go back home and talk to our pork producers or 
our cattle ranchers who are desperate to sell their products 
into the international marketplace, and are really, really 
having a hard time of it, I have to tell you I am at a loss to 
explain to them why we haven't leveled the playing field, 
lowered the trade barriers, and opened up these markets to, not 
only our small businesses, but to our ag economy.
    Thank you.
    Senator Klobuchar. Thank you very much, Senator Johanns.
    Senator Begich, from Alaska?

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Thank you very much, Madam Chair.
    I'm looking forward to your testimony. I thank you all for 
being here. I'm interested in trying to see, from a very 
optimistic viewpoint, what we can do to help our small 
businesses and medium-sized businesses to increase their 
capacity to do business overseas. I know, from Alaska's 
perspective, we do about $3.6 billion of exports: minerals, 
forestry, energy. Fish is our biggest component, $1.8 billion. 
Of our business, about 11 percent is small business or medium-
sized business, so we have seen great success in just pushing 
and forging ahead. I'd like to remind folks that Alaska has 
half the coal of the country. We produce and ship to South 
Korea, and soon to be Chile, about a million tons a year, up to 
maybe 2 million in the next several years. So, we are finding 
ways to do the business overseas, because we, in our view, are 
an international State. Our business is international. That's 
how our economy grows, and that's how we expand it.
    But, I am interested in seeing, as a small-business person 
for over 25 years, and my wife's a small-business person, what 
we can do to increase that capacity. Lots of times what I find 
is, it's just knowing the simple process of doing it, and I'll 
give you one simple example. For business export, and as I 
recall importing those dollars, people do duty-free business. 
It's very difficult to find the rules and regulations to do the 
business, so I'm anxious to hear what things and what outreach 
you're going to be doing to small business and medium-sized 
business--not through the Federal Registry, but I mean actually 
real outreach. And I know you have done some stuff. As a former 
mayor, I worked with a lot of folks on small business and 
medium-sized business development. But, from our perspective, 
my perspective, from our State, it is important, export as well 
as import business. But export business is important because 
that is our driving force in some of our economies. Again, the 
fishing industry is a great example of that.
    So, I'm anxious--I'm not going to get into the larger trade 
issues, that--we'll have plenty of time, I think, in the Senate 
to debate those. But, right now there are tools that I know you 
have that we can be educated on to help our constituencies 
really plow through the fields of foreign trade, as some of our 
businesses have done very, very successfully.
    I will say that the State of Alaska, right after World War 
II, established a trade office in Japan, because we saw the 
opportunity to do business. And we do it, and we do a lot with 
Japan, just as we do with South Korea and many other Asian 
countries. We do a lot of business now with Russia. In Alaska, 
we have the highest amount of Russian students that come to any 
university in this country, come to learn how to do business, 
and exchange. So, I'm anxious to hear some of those tools, that 
you have that may be underutilized, that we could help maybe 
promote to our small business and medium-sized business.
    So again, thank you for being here.
    Madam Chair, thank you for holding this hearing to educate 
us, and hopefully our constituency, in what we can utilize, and 
then we might have some tougher questions in the later process.
    Thank you very much.
    Senator Klobuchar. Well, thank you very much, Senator 
Begich.
    Now we're going to hear from our witnesses. I'll introduce 
you all together, and then you can each speak for 5 minutes, 
and then we'll do questions.
    First, Rochelle Lipsitz is the Acting Assistant Secretary 
for Trade Promotion, and Director General of the U.S. 
Commercial Service. In this role as head of the trade promotion 
unit in the Commerce Department, Ms. Lipsitz oversees the 
commercial services trade specialists in 107 U.S. cities and 
more than 80 countries around the world.
    Second, Alice Albright. She is the executive vice president 
and chief operating officer of the Export-Import Bank of the 
United States. Ms. Albright joined the Export-Import Bank this 
year, after working for 24 years in international finance 
positions in both the private and nonprofit sectors.
    Liz Reilly is the Director of TradeRoots, the U.S. Chamber 
of Commerce's program that helps raise grassroots support and 
public awareness about the importance of exports to local 
communities and small business.
    Tom Wollin, who I already introduced, heads up the 
international and governmental sales at Mattracks, the company 
based in Karlstad, Minnesota.
    And then finally, we have Brad Pierce, who Senator LeMieux 
mentioned is the President of a small family-owned business in 
Orlando, Florida, called Restaurant Equipment World, a company 
that has sold commercial restaurant supplies to all 50 states 
and 100 countries. Mr. Pierce is also testifying today on 
behalf of the National Federation of Independent Businesses.
    Thank you all for being here today, and welcome.
    And we'll begin with Ms. Lipsitz.

 STATEMENT OF ROCHELLE A. LIPSITZ, ACTING ASSISTANT SECRETARY 
               FOR TRADE PROMOTION AND DIRECTOR 
  GENERAL, U.S. AND FOREIGN COMMERCIAL SERVICE, INTERNATIONAL 
          TRADE ADMINISTRATION, DEPARTMENT OF COMMERCE

    Ms. Lipsitz. Thank you, Chairman Klobuchar, Ranking Member 
LeMieux, and members of the Subcommittee. Thank you for the 
opportunity to speak with you today about the role of export 
promotion in our efforts to strengthen and support America's 
economy. I welcome the Subcommittee's interest in this topic, 
and look forward to outlining the Department of Commerce's 
efforts to promote U.S. exports.
    Madam Chair, I know you have worked with the Commercial 
Service in Minnesota and have seen firsthand how the department 
works to reach out to U.S. small and medium-sized firms. As 
part of the International Trade Administration, the U.S. and 
Foreign Commercial Service helps American firms and workers 
navigate the often complicated and unpredictable waters of 
foreign trade so that U.S. firms' sales abroad help to support 
jobs here in the United States.
    The Commercial Service operates a global network of trade 
professionals in 109 U.S. locations and in 77 countries. Our 
staff works with U.S. companies to provide numerous services, 
ranging from counseling, advocacy support, and market research, 
to industry expertise and identification of international 
buyers or partners. We guide companies through every step of 
the export process, from learning how to export, to logistics 
and shipping issues. The Commercial Service' vision is that 
every U.S. business sees the world as its marketplace.
    The Commercial Service focuses its programs on three 
priorities: increasing the number of U.S. firms that export; 
helping companies expand into new markets; and helping 
exporters overcome hurdles in foreign markets.
    In Fiscal Year 2008, U.S. firms, assisted by the Commercial 
Service, reported over 12,000 export successes. Eighty-two 
percent of these successes were reported by small and medium-
sized businesses. U.S. companies' access to Commercial Service' 
global network in a variety of ways: through our local U.S. 
Export Assistance Centers, or USEACs, through our international 
offices based in U.S. embassies and consulates abroad, and via 
our trade information hotline, which is 1-800-USA-TRADE.
    We are able to reach even more companies interested in 
exporting through strategic partnerships which leverage 
private-sector organizations, State and local governments, 20 
Federal agencies, and trade associations, to make sure their 
clients are aware of the range of Federal export assistance 
programs.
    Trade events organized by the Commercial Service, including 
trade missions, international buyer shows, and trade fairs, are 
an excellent way for companies to get international exposure 
and make valuable contacts.
    The Commercial Service also engages in advocacy and 
commercial diplomacy on behalf of U.S. companies to help level 
the playing field when they are bidding for procurements, and 
to resolve problems ranging from regulatory trade barriers to 
unfair trade practices.
    For example, the Commercial Service wrote a letter to the 
Chinese government on behalf of Corgan Associates, Inc., a 
small firm located in Dallas, Texas. The advocacy letter 
highlighted Corgan's ability to deliver an eco-friendly design 
for a green-build office complex for the China Construction 
Bank. Corgan's consortium won the bid, and Corgan values their 
promotion of this project to 1.6 million U.S. dollars.
    The Commercial Service also regularly works with its 
partners, such as the Export-Import Bank, and the Small 
Business Administration to provide trade finance assistance and 
expertise to small and medium-sized firms. In addition, this 
morning Commerce Secretary Locke announced the launch of the 
first phase of CommerceConnect, a pilot program in Detroit. 
CommerceConnect will provide a single point of contact where 
businesses can access the full array of commerce and Federal 
Government assistance programs available to them.
    In 2 weeks, Secretary Locke will convene the Trade 
Promotion Coordinating Committee. The TPCC provides a framework 
for the Secretary of Commerce to work with the heads of 20 
Federal agencies to develop a governmentwide national export 
promotion strategy.
    In these uncertain economic times, the Department of 
Commerce stands ready to help U.S. companies at home and 
abroad. Our work is more important than ever for U.S. economic 
prosperity and for job creation. The Commercial Service is 
there to assist small and medium-sized companies by helping 
them grow and the maintain long-term competitiveness of the 
United States. Members of the Committee, we look forward to 
working with you, and invite you to be a partner in supporting 
our efforts here in Washington, in your home states, and 
abroad.
    Many thanks for your interest.
    [The prepared statement of Ms. Lipsitz follows:]

 Prepared Statement of Rochelle A. Lipsitz, Acting Assistant Secretary 
 for Trade Promotion and Director General, U.S. and Foreign Commercial 
  Service, International Trade Administration, Department of Commerce
Introduction
    Chairwoman Klobuchar, Ranking Member LeMieux, and members of the 
Subcommittee, thank you for the opportunity to speak before you today 
about the role of export promotion in our efforts to strengthen and 
support America's economy.
    I welcome the Subcommittee's interest in this topic and look 
forward to outlining the Department of Commerce's efforts to promote 
U.S. exports. Madam Chair, I know you have worked with the Commercial 
Service in Minnesota and have seen first-hand how the Department works 
to reach out to U.S. small and medium sized firms to help them export.
    Within the Department of Commerce, it is the International Trade 
Administration's (ITA) mission to create prosperity by strengthening 
the international competitiveness of U.S. industry, promoting trade and 
investment, and ensuring fair trade and compliance with trade laws and 
agreements that enhance the ability of U.S. firms and workers to 
compete and win in the global marketplace. This mission is critical to 
enhancing America's global competitiveness and expanding commercial 
opportunities for American manufacturers, farmers, and service workers 
throughout the world.
    As part of ITA, the Commercial Service helps American firms and 
workers navigate the often complicated and unpredictable waters of 
foreign trade so that U.S. firms' sales abroad help to support jobs 
here in the United States.
    The Commercial Service's vision is for every U.S. business to see 
the world as its marketplace. Our primary mission is to promote U.S. 
exports, particularly by small and medium-sized enterprises, and 
advance U.S. commercial interests abroad. We strengthen American 
competitiveness, increase job creation and global prosperity, and 
through trade we advance U.S. national security and build bridges to 
international cooperation.
    The Commercial Service operates a global network of trade 
professionals in U.S. Export Assistance Centers (USEACs) in 109 U.S. 
locations and in U.S. Embassies and Consulates in 77 countries. 
Commercial Service staff works with U.S. companies to provide numerous 
services ranging from counseling, advocacy support, and market research 
to industry expertise and identification of potential international 
buyers or partners. We guide companies through every step of the export 
process, from learning how to export to logistics and shipping issues.
    The Commercial Service focuses its programs on three priorities: 
(1) increasing the number of U.S. companies that export, (2) helping 
smaller companies expand to new export markets, and (3) helping 
exporters overcome hurdles in foreign markets. In particular, the 
Commercial Service focuses on assisting small and medium-sized 
enterprises (SMEs) succeed in the international economy. Ninety-seven 
percent of U.S. exporters are SMEs, and Commercial Service programs are 
designed to help these companies export to the 95 percent of the 
world's consumers that live beyond our borders.
    In Fiscal Year 2008, U.S. firms reported 12,659 export successes 
that were assisted by the Commercial Service; 426 of these successes 
were from companies that had never exported before, and 3,627 were from 
firms that had exported to a new market. Eighty-two percent of these 
successes were reported by SMEs.
Role of Exports in the U.S. Economy
    The U.S. economy is dependent on the global economy. In 2008, 
exports accounted for 13 percent of Gross Domestic Product (GDP). To 
put this in historical context, exports were 9.5 percent of U.S. GDP 5 
years earlier (2003), and 5.3 percent 40 years ago (1968). Last year, 
the United States exported an astounding $1.84 trillion worth of goods 
and services.
    These export figures translate directly into the creation of jobs 
in the United States. The latest available employment numbers (2006) 
indicate that roughly six million U.S. jobs depend on manufactured 
exports.
    Moreover, a significant number of major U.S. manufacturing 
industries are heavily dependent on foreign sales. For example, in 
2006, seven major manufacturing sectors, led by computers and 
electronic products and primary metals, counted more than one in four 
jobs as export-supported.
    In the State of Minnesota more than 6,000 companies exported goods 
in 2006. Of those, nearly 5,574 (88 percent) were SMEs with fewer than 
500 employees. SMEs generated over 20 percent of Minnesota's total 
exports of merchandise in 2006. In 2008, Minnesota's export shipments 
of goods totaled $19.2 billion, up 1.9 percent from the 2007 total of 
$17.7 billion. Minnesota ranked 15th among the states in terms of 
merchandise exports in 2008.
    Recently the Commercial Service helped one of these firms, Waterous 
Company of St. Paul, Minnesota, a manufacturer of fire suppression 
technology. We worked on the company's behalf to secure a level playing 
field for a government procurement project in Macedonia. Waterous 
Company was part of a foreign-led consortium that was awarded a 
contract in June 2009 to provide 25 fire trucks to the Macedonian 
Government's Protection and Rescue Directorate. The total value of the 
bid was $25 million, and Waterous' portion of the bid, sourced from 
Minnesota, was $7.5 million, with 100 percent U.S. export content. The 
Commercial Service successfully coordinated U.S. Government advocacy on 
behalf of the consortium.
    Service exports--including education, business services, 
information services, entertainment, international tourism to the 
United States, and construction and engineering--have also contributed 
to job creation. For example, recent estimates indicate that 
international travelers to the United States support roughly 1.1 
million domestic jobs. Moreover, current figures show that the United 
States posted a healthy trade surplus of $12.6 billion in the education 
sector. U.S. receipts from international students studying in the 
United States reached $17.8 billion in 2008, the highest amount yet 
recorded. Those U.S. exports come primarily from travel by 
international students, who then pay tuition, fees, and living expenses 
to U.S. institutions.
Assisting Small and Medium-sized Companies Export
    U.S. companies access the Commercial Service's global network in a 
variety of ways. Our 300 trade specialists located in USEACs throughout 
the country reach out to local companies to help them realize their 
export potential by providing in-depth, value-added counseling. 
Companies contact our experts overseas for country-specific information 
and assistance in resolving commercial issues. Companies also call our 
Trade Information Center (TIC; 1-800-USA-TRADE), which is staffed by a 
team of trade experts that serve as a single point of contact to all 
potential exporters. The TIC provides basic export counseling and 
information on all U.S. Government export assistance programs. In 
Fiscal Year 2009, the TIC gave personal assistance to more than 36,000 
inquiries, 75 percent of which were from SMEs. In addition, ITA manages 
Export.gov, the Federal website dedicated to providing comprehensive 
information to U.S. firms as they enter or expand into global markets. 
It brings together all the export promotion products and services of 
the Federal Government in one needs-based, customer-friendly website. 
With Export.gov, small companies can walk through each step of the 
export process in just a few clicks of a mouse.
    The Commercial Service makes a concerted effort to reach out to 
minority and women-owned businesses, as well as businesses located in 
rural areas, to assist them with exporting. For example, in 2008, 
Commercial Service-Santa Fe recruited and coordinated the participation 
of Antelope Slot Canyon Tours by Chief Tsosie of Page, Arizona, a 
Navajo-owned and operated business, in the 2008 ITB Travel and Tourism 
Show in Berlin. Partly as a result of contacts made at trade shows, 
Chief Tsosie has seen an increase from 3,000 to 25,000 visitors on his 
tours in the last 5 years. Commercial Service-Santa Fe also organized 
the first ever American Indian Alaska Native Tourism Association-
sponsored trade show booth at the ITB 2009 show.
Expanding our Reach with Strategic Partnerships
    We are able to reach even more companies interested in exporting 
through strategic partnerships, which leverages the customer base of 
private sector organizations (such as express delivery companies), 
state and local governments, and trade associations, to make sure their 
clients are aware of the range of Federal export assistance programs.
    In 2004, the Commercial Service established the Corporate 
Partnership Program, leveraging a Public-Private Sector Partnership 
model to expand the U.S. exporter base. Combining the export assistance 
services of the Commercial Service together with export services 
companies, the Corporate Partnership Program enables increased export 
opportunities through joint outreach and education to small-and medium-
sized U.S. businesses. The Commercial Service's corporate partners have 
worked with us on a variety of initiatives. Our partners have hosted 
export seminars, helped produce and distribute the Export Finance 
Guide, and have sponsored international trade missions and trade 
events.
    Partnerships with state and local trade organizations are a key 
component of the Commercial Service's partnership strategy. We work 
with state and local partners across the country to educate SMEs on the 
benefits of exporting and to provide them with specific industry and 
market information. Forty of our USEACs across the country are 
collocated with state or local partners to further strengthen our joint 
efforts. This collaboration brings the best possible combination of 
resources to the client, increasing successful exporting and resulting 
in local economic and job growth.
    Commercial Service staff in Minneapolis, working closely with the 
Alexandria (MN) Economic Development Commission, reached out to Solar 
Skies Manufacturing of Starbuck, MN, a manufacturer of solar 
collectors, to understand their needs and provide any possible 
assistance. Commercial Service-Minnesota, working closely with 
Commercial Service-Toronto, was able to introduce the firm to a 
Canadian buyer, resulting in a sale. Follow-on assistance includes 
export financing counseling, in close partnership with the Export-
Import Bank (Ex-Im) and Small Business Administration (SBA) colleagues.
    The Commercial Service works closely with successful U.S. exporters 
through its relationship with the District Export Councils (DECs). DEC 
members are local business leaders, appointed to the DEC by the 
Secretary of Commerce, whose knowledge of international business 
provides a source of professional advice for local firms. There are 60 
DECs located across the United States, each working closely with local 
Commercial Service offices on issues important to the local exporting 
community. Export University is a program carried out by the DECs in 
collaboration with the Commercial Service to help American companies 
begin exporting and gain new skills to expand their international 
sales.
    The Commercial Service also works with key national and industry 
associations linking our common strategic goals and activities. One of 
our major association partners is the National Association of 
Manufacturers (NAM). Under a joint agreement entered into in fall 2003, 
the Commercial Service provides a Commercial Officer as a liaison to 
NAM to enhance NAM's outreach to SME members. We have also finalized an 
agreement with the United States Council for International Business for 
its Carnet program and with the U.S. Chamber of Commerce for its 
TradeRoots program for further outreach and education to their members. 
Our Trade Association Liaison provides associations' members with 
information and resources to begin exporting and to navigate the 
intricate issues surrounding international trade, including an 
introduction to our services.
Matchmaking and Counseling
    When our trade specialists at local USEACs across the country 
counsel companies about exporting, they often recommend that companies 
find an overseas agent or distributor. Our overseas staff located in 
U.S. Embassies and Consulates throughout the world can save a U.S. 
company valuable time and money by doing the legwork in advance in a 
specific market to help the company find potential agents, distributors 
or other strategic partners.
    As part of our matchmaking service, we contact a number of pre-
screened overseas business partners and then identify the contacts that 
appear most capable of becoming a viable representative for the U.S. 
company in that market. All of this work is done before the company 
travels overseas to meet face-to-face with these potential partners, 
saving the company time and resources.
    For example, Pioneer Equipment Limited of Jacksonville, Florida is 
an exporter of heavy equipment and cranes. In 2008, the Commercial 
Service arranged meetings for Pioneer Equipment in Senegal with 
potential customers in the Senegalese construction and transportation 
industries. As a result of these meetings, the company sold equipment 
worth approximately $130,000 into Senegal.
Trade Events
    Trade events are an excellent way for companies to get 
international exposure and make valuable contacts. These events, which 
include trade missions, international buyer shows, and trade fairs, 
assist U.S. companies in making contacts, developing business 
relationships, and locating customers overseas.
    Trade missions are an effective way for companies to gain access to 
foreign company leaders and government officials who would not normally 
meet with individual business visitors. In 2008, the Commercial Service 
supported trade missions to 27 overseas markets with a total of 420 
U.S. companies participating, resulting in nearly $350 million in 
export successes to date.
    This past spring, the Commercial Service completed a successful 
trade mission to Poland, called TradeWinds, that had both a Pan-
European conference and a matchmaking component. The program consisted 
of a full day business conference on the European market, one-on-one 
counseling sessions with 28 Commercial Service Officers stationed in 
Europe, and business-to-business meetings with potential partners from 
Poland and other European markets. One-hundred thirty-four 
representatives from 84 U.S. companies and 22 states participated in 
the event. Over 97 percent of these participants were representatives 
of SMEs. One of the firms that participated was Taking the Water, a 
woman-owned small business that manufactures products for the health 
and wellness industry. Taking the Water had never exported, and worked 
with Commercial Service-New Jersey prior to attending the TradeWinds 
mission to conduct market research and learn about methods of 
distribution; financing and pricing their product for export; methods 
of payment; shipping and logistics; and tax/tariff structures. As a 
result of their participation in the TradeWinds mission, the company 
met a number of potential distributors for its products in Poland and 
has already made an initial sale.
    We have a number of trade missions planned for coming year, 
including an Aerospace Supplier Development Mission to India; an 
Aerospace Executive Service Trade Mission to Singapore; a Bright Green 
Program at the United Nations Climate Change Conference (COP15) in 
Copenhagen; and a solar and energy efficiency mission to India. In 
December, Commercial Service-Minnesota is supporting Governor 
Pawlenty's trade mission to Brazil and Chile.
    Our International Buyer Program (IBP) is a government-industry 
program designed to increase U.S. export sales by promoting 
international attendance at major U.S. industry trade shows. The IBP 
selects approximately 35 U.S. trade shows each year where our staff 
provides practical, hands-on assistance to U.S. exhibitors including 
export counseling, marketing analysis, and matchmaking services. 
Commercial Service staff overseas promotes these trade shows and 
recruit foreign buyer delegations to attend these shows.
    The Trade Fair Certification program is a cooperative partnership 
arrangement between private sector show organizers and the U.S. 
Government to increase U.S. exports and to expand U.S. participation in 
overseas trade shows. The program provides Department of Commerce 
endorsement, show-related services, oversight and coordination of event 
services, promotional support, exhibitor marketing facilitation, and 
in-country/show site assistance for private sector organizers to 
recruit and build a U.S. Pavilion at selected foreign trade shows. 
These shows serve as a vital access vehicle for U.S. firms to enter and 
expand foreign markets. The certified show/U.S. pavilion ensures a 
high-quality, multi-faceted opportunity for American companies to 
successfully market overseas. In 2009, the TFC Program certified 107 
overseas trade fairs.
Commercial Diplomacy and Advocacy
    U.S. companies often need assistance to address specific trade-
related issues. The U.S. Government can weigh in on behalf of a U.S. 
company with the foreign government to help the company resolve these 
issues. These problems range from regulatory trade barriers to unfair 
trade practices. Our job, through commercial diplomacy, is to work with 
the foreign government to find a solution so that the U.S. company has 
the best possible chance to sell its products and services in that 
market. This type of service is particularly important in emerging 
markets.
    In the fall of 2008, a Missouri-based manufacturer, Liquid Soap 
Products, contacted the Trade Information Center asking for assistance 
in obtaining the release of a shipment of soaps and cleaning products 
from Portuguese Customs in Lisbon. Customs refused to clear the 
shipment until the Portuguese health regulatory agency certified the 
products' safety. The trade specialist put the company in touch with 
our commercial officer in Lisbon, who then contacted the regulatory 
agency. In January 2009, Portuguese Customs released the cargo and the 
sale was executed.
    U.S. companies also look to Commercial Service to help them win 
bids on foreign tenders. The Advocacy Center coordinates U.S. 
Government advocacy on behalf of U.S. companies bidding for 
procurements. In 2008, U.S. Government advocacy supported American 
companies successfully in 34 international procurements with U.S. 
export content of $21.8 billion. The Advocacy Center is actively 
tracking over 400 cases.
    For example, Corgan Associates, Inc. of Dallas, Texas, a small 
architectural design firm, led a consortium of architectural and 
engineering consultants that was recently awarded a contract for a new 
LEED-certified ``green build'' office complex for the China 
Construction Bank in Wuhan, China. On a short timeline, the Commercial 
Service provided an advocacy letter to Chinese government officials 
associated with the contract award which highlighted Corgan's ability 
to deliver a first-class eco-friendly facility to their client. Corgan 
values their portion of this project at $1.6 million, which represents 
significant revenue for a small firm and economic security to their 
fifteen person team of specialists dedicated to this effort. They are 
also optimistic that this win will aid them in the future, noting in a 
letter to the Commercial Service that, ``this project has catapulted 
our name into the market.''
Export Financing
    The Commercial Service regularly works with its colleagues and 
strategic partners to provide trade finance assistance and expertise. 
In addition to our counseling visits with SMEs, we work closely with 
our TPCC partners to conduct seminars and webinars in this area to 
advise SMEs on export financing options. In response to the recent need 
for additional trade financing information, the Commercial Service has 
launched a new global Finance Team, to assist U.S. exporters with 
receiving financing assistance and solutions in a rapidly changing 
commercial banking landscape. In November, the team will hold a seminar 
in Miami, FL titled ``Finding Financing for Florida Exports.'' This 
seminar is being organized by the team in close collaboration with the 
Florida International Bankers' Association, SBA, and Ex-Im.
    If a U.S. company finds an interested foreign partner, our team of 
trade experts will work with the U.S. exporter to identify financing 
options. The Federal Government has a number of different tools to help 
U.S. companies complete a sale. The most common are: working capital 
guarantees that provide transaction-specific loans to U.S. exporters 
and are made by commercial lenders and backed by SBA or the Ex-Im; 
credit insurance, which covers the risk of buyer nonpayment for 
commercial risks (e.g., bankruptcy) and certain political risks; and 
buyer financing, which provides term financing to credit worthy 
international buyers for purchases of U.S. goods and services. Some of 
our Strategic Partners, including TD Bank and M&T Bank, have hosted 
seminars for their clients on trade finance and Federal financing 
programs. In addition, some partners, including M&T Bank and Comerica, 
have reprinted and are distributing our Export Finance Guide, which 
provides a comprehensive resource on export financing options, to their 
clients.
Upcoming Department of Commerce Initiatives
    I am pleased to inform you of an initiative that will allow the 
Commercial Service to better leverage the types of resources I have 
described. Earlier this year, Commerce Secretary Locke announced a 
pilot program aimed at providing U.S. companies with a single point of 
contact for U.S. Government business assistance. The program, which has 
been called the ``One-Stop Shop'' will provide assistance to firms to 
meet a wide range of needs. Whether a business needs help patenting a 
new technology or improving their manufacturing processes or getting 
access to a new market, they are going to have one place to go to 
access the full spectrum of both Commerce Department programs, as well 
as other Federal programs available to our businesses. The Department's 
goal is to unveil this concept in Detroit in this week.
    Later this year, Secretary Locke will also convene the Trade 
Promotion Coordinating Committee (TPCC), which directs the 
Administration's trade promotion efforts. The TPCC is chaired by the 
Secretary of Commerce and its Secretariat is housed in the Commercial 
Service. The TPCC members are the heads of 20 Federal Government 
agencies, including SBA, Ex-Im, the Overseas Private Investment 
Corporation, the U.S. Trade and Development Agency, the U.S. Department 
of Agriculture, the U.S. Department of State, the U.S. Department of 
the Treasury, the U.S. Department of Labor and the Office of Management 
and Budget. The TPCC provides a framework for the Secretary of Commerce 
to work with the heads of the other agencies to develop priorities for 
a government-wide agenda on trade promotion.
    The TPCC also sponsors interagency training for trade professionals 
to promote a better understanding of export promotion and trade finance 
programs across the Federal Government. Small businesses often view the 
Federal Government as one entity rather than a collection of programs 
or agencies, and staff learns about all the resources that the Federal 
Government has to offer. During the training, American companies 
present real world problems and challenge the participants to work 
together to come up with solutions. To date, over 750 participants from 
12 agencies and eight states have completed the program.
Conclusion
    In these uncertain economic times, the Department of Commerce 
stands ready to help U.S. companies at home and abroad. ITA's work is 
more important than ever for U.S. economic prosperity and for job 
creation and the Commercial Service is there to assist SMEs by helping 
them grow and maintain the long-term competitiveness of the United 
States. Members of the Committee, we look forward to working with you 
and invite you to be a partner in supporting our efforts here in 
Washington, in your states, and abroad.

    Senator Klobuchar. Thank you very much.
    Ms. Albright?

        STATEMENT OF ALICE P. ALBRIGHT, EXECUTIVE VICE 
         PRESIDENT AND CHIEF OPERATING OFFICER, EXPORT-
                IMPORT BANK OF THE UNITED STATES

    Ms. Albright. Thank you very much. Madam Chairwoman, 
Senator LeMieux, Members of the Subcommittee, I wanted to thank 
you very much for including me in this hearing. I don't do this 
very often, so it's a pleasure for me to be here.
    Before I begin my testimony, I would like to say that 
Chairman Hochberg, the head of Ex-Im Bank, wishes that he could 
be here, but he's actually in Boston today, attending one of 
Ex-Im's export promotion seminars for small and medium-sized 
businesses. We had a similar event in New York yesterday, which 
I understand from my colleagues was a tremendous success, so I 
think it's something that we ought to continue to try to do.
    Thank you for holding this hearing to focus on the 
importance of exports on U.S. economic growth, especially 
during these very difficult times. A sense of urgency and 
purpose pervades our work at the Export-Import Bank of the 
United States as we fulfill our mandate of supporting U.S. jobs 
by helping to finance exports that would otherwise not go 
forward.
    Ex-Im provides loans, loan guarantees, and insurance to 
help U.S. companies export their goods and services. From 
financing for Boeing Aircraft to Ireland, to turbines for 
powerplants in India to equipment that manufactures saline bags 
in Nigeria, Ex-Im helps American business reach the 95 percent 
of the global marketplace that is outside of our borders.
    And in the current economic crisis, Ex-Im Bank stepped in 
where private banks couldn't.
    Though we're just closing our books on fiscal 2009, and the 
exact numbers are being finalized, I can report that fiscal 
2009 was a record year for Ex-Im Bank activity. Our 
authorization level for transactions was $21 billion, compared 
to an annual average of $13.3 billion for the previous 5 fiscal 
years. Our small business transactions were over $4 billion, 
which was up 29 percent, versus Fiscal Year 2008. The number of 
small business transactions itself was 2,269, or 88 percent of 
all transactions that were supported by the Bank over the 
course of the year.
    What's more, we have done all of this at no expected cost 
to the U.S. taxpayer. Ex-Im Bank is financially self-
sufficient.
    Ex-Im Bank was able to fill the financing gap during the 
economic crisis in a number of ways.
    First, Ex-Im Bank has been flexible enough to respond to 
the international economic downturn. One example of our work is 
with the Korean banking sector. In fiscal 2009, Ex-Im Bank 
provided over $1 billion in guarantees due to U.S. lenders' 
reluctance to take Korean bank risk. As risk appetite 
increases, however, Ex-Im will be able to gradually withdraw 
this support.
    In our working capital program, the Bank revamped its 
credit standards to help stimulate small businesses to sustain 
and create jobs. These actions have led to a record year for 
the working capital product, surpassing the former record for 
authorizations by $150 million, or an 11-percent increase.
    Also to assist small businesses, the Bank implemented new 
products and services, such as a premium rate reduction of 15 
percent on our short-term, small-business, multi-buyer 
insurance policies. The rate reduction affects approximately 
half of all Ex-Im insurance policyholders and was implemented 
in order to help struggling small businesses meet payroll and 
health insurance obligations while remaining in our program. 
I'm happy to report that we saw a 100 percent increase in 
applications under this part of our program.
    Looking to the future, we are seeking ways to do more. 
Interagency coordination and cooperation, represented in our 
case by the Trade Promotion Coordinating Committee, or TPCC, 
can be strengthened. Every effort should also be made to reach 
out directly to small businesses that are either currently 
exporting or could potentially export. Ex-Im Bank is doing this 
through the Export Live Series, which will provide exporters, 
small businesses new to exporting, and banks in eight key 
cities with direct access to agency representatives from Ex-Im, 
SBA, Commerce, USTR, OPIC, and TDA. Moreover, all of the 
regional offices of Ex-Im are fully devoted to small business 
outreach. We host or attend over 400 conventions, seminars, and 
trade shows annually, and have thousands of one-on-one meetings 
with businesses, and work aggressively to ensure banks and 
economic development agencies are aware of Ex-Im's products and 
services.
    Similar outreach efforts are necessary to get commercial 
banks involved, or in many cases reinvolved, as the banks work 
closely with American business and can advise them on the 
resources that Ex-Im Bank and other Federal agencies have to 
offer, particularly to increase sales and jobs.
    Because of our limited resources, we need to use more 
third-party, what we call, ``multipliers'' to increase our 
outreach efforts. For instance, we are redoubling our efforts 
to partner with Senators, Members of Congress, Governors, 
mayors, State legislators, and others, to host in-State trade 
seminars with local businesses. In addition to these 
partnerships with elected officials, Ex-Im is working to 
partner broadly with banks, credit unions, and other financial 
institutions to increase education and access to our products 
for our clients. We stand ready to work with you to help 
finance exports from businesses in your states. And while there 
is still obviously much more to do, we know how to do it, we 
know what the goal is, and that's obviously very important to 
all of us, which is to increase U.S. exports and increase jobs.
    I'll be very happy to answer all of your questions. I've 
also taken notes on a number of the companies that you all have 
mentioned--I'm diverting from the script a little bit--but I'd 
be happy to work with anybody in your states to show them how 
Ex-Im works, and give them the knowledge that we have 
internally about how to reach out to the countries on your map 
that only has the borders shown.
    Thank you.
    [The prepared statement of Ms. Albright follows:]

 Prepared Statement of Alice P. Albright, Executive Vice President and 
    Chief Operating Officer, Export-Import Bank of the United States
    Madam Chairwoman, Senator LeMieux, members of the Subcommittee:
    Before I begin my testimony, I would like to say that Chairman 
Hochberg wishes he could be here but he is in Boston attending one of 
Ex-Im's export promotion seminars with small and medium-sized 
businesses.
    Thank you for holding this hearing to further focus on the 
importance of exports on U.S. economic growth. We all hope that the 
difficult economic times are ending and that the recovery has begun. 
While I will not make a prediction on these matters, history does 
indicate that during periods of economic recovery, job growth lags 
behind recovery in the rest of the economy. Due to the severity of the 
economic downturn, and while many Americans remain jobless, the Export-
Import Bank of the United States (Ex-Im Bank) has been called upon to 
step up in these difficult times, just as we did during the Great 
Depression, the Marshall Plan, as well as the Brazil, the Mexican and 
the Asian economic crises.
    It is a sense of urgency and purpose which pervades our work at the 
Ex-Im Bank as we go about fulfilling our mandate of supporting U.S. 
jobs by helping to finance exports that would not otherwise go forward. 
This is the mandate that Congress has given us and the one we have been 
following for 75 years.
    Ex-Im provides loans, loan guarantees and insurance to help U.S. 
companies export their goods and services. We have a variety of 
products to facilitate commerce at all levels. From financing for 
Boeing aircraft to Ireland, to engineering services for a power plant 
in India, to the equipment that manufactures saline bags in Nigeria. 
Ex-Im helps American business reach the 95 percent of the global 
marketplace that is outside of our borders.
    And in the current economic crisis Ex-Im stepped in where private 
banks could not.
    A brief review of our FY 2009 figures will give you an idea of what 
I'm talking about. Though we are just closing our books and the exact 
numbers are still being finalized, I can report that FY 2009 was a 
record year for Ex-Im Bank activity. Our authorization level for 
transactions was $21 billion, compared to an average of $13.3 billion 
for the previous five Fiscal Years. Our small business transactions 
were over $4 billion, 29 percent higher than FY 2008. The number of 
small business transactions was 2,269, or 88 percent of all 
transactions supported by the Bank.
    What's more, we have done all this at no expected cost to the U.S. 
taxpayers. Ex-Im Bank is financially self-sufficient. This means that 
we are able to finance our program budget, the amount we must set aside 
to cover risks, as well as our administrative budget, through the fees 
and other payments we receive from those using our programs.
    Ex-Im Bank was able to fill the financing gap in a number of ways.
    First, is institutional flexibility. Institutions such as Ex-Im 
Bank have to be prepared to respond to abrupt changes in the 
environment in which they operate. For instance, in the years prior to 
FY 2009, most of the Bank's larger transactions, and some smaller and 
medium-sized, were financed through loan guarantees, where Ex-Im would 
guarantee up to 85 percent of a commercial bank loan to a foreign 
buyer. But Ex-Im also had the option of lending directly to a foreign 
buyer. In FY 2009, commercial banks lacked the liquidity to offer 
loans. So, where appropriate increasingly, Ex-Im stepped in and 
provided direct loans.
    Another example is our work with the Korean banking sector. In FY 
2009, Ex-Im provided over $1 billion in guarantees due to U.S. lenders 
reluctance to take Korean bank risk related to export letters of 
credit. As the risk appetite of U.S. lenders increases, Ex-Im will be 
able to gradually withdraw its support.
    In our working capital program, the Bank revamped its credit 
standards to help small businesses so that exports could be stimulated 
and U.S. jobs sustained and created. These actions have led to a banner 
year for the working capital product, eclipsing the former record for 
authorizations by over $70 million. We, of course, are carefully 
monitoring this portfolio to minimize default risks.
    Also to assist small businesses, the Bank implemented new products 
and services such as a premium rate reduction of 15 percent on our 
short-term multi-buyer insurance policies and short-term small business 
environmental multi-buyer insurance polices. The premium rate reduction 
affects approximately half of all Ex-Im insurance policyholders.
    During this economic downturn, Ex-Im has introduced what we call a 
``take-out'' option, which allows commercial banks to sell their Ex-Im 
Bank guaranteed medium and long-term loans back to Ex-Im. This enables 
commercial banks to reduce their liquidity risks, lower borrowing 
rates, increase their own ability to lend and make U.S. exports more 
competitive.
    Looking to the future, we are seeking ways to do even more. Inter-
agency coordination and cooperation can be strengthened through the 
Trade Promotion Coordinating Committee, or TPCC, which is made up of 20 
U.S. Government agencies involved in trade, under the direction of the 
Department of Commerce. The Secretary of Commerce, who serves as the 
committee's chairman, has made a vital TPCC a strategic priority. I am 
looking forward to working with Secretary Locke and the TPCC to ensure 
that every effort is made to reach out directly to small businesses 
that either currently export or could potentially export.
    Ex-Im, in close cooperation with other government agencies, is 
doing this through an eight-city Exports Live series, which will 
provide exporters, small businesses new to exporting, and banks in New 
York, Boston, Miami, Houston, Detroit, Chicago, Los Angeles, and 
Seattle areas with direct access to agency representatives from Ex-Im, 
SBA, Commerce, USTR, OPIC, and TDA, along with one-on-one counseling 
for exporters. Moreover, all of the regional offices of Ex-Im, 
including New York, Miami, Houston, Chicago, Los Angeles, and San 
Francisco, are fully devoted to small business outreach. We host or 
attend over 400 conventions, seminars, or trade shows annually, have 
thousands of one-on-one meetings with businesses, and work aggressively 
to ensure banks, and economic development agencies are aware of Ex-Im 
and the products and services we offer.
    We estimate that there are 259,000 actual small business exporters 
in the U.S. With a business development staff of less than forty, Ex-Im 
is working incredibly hard to reach these companies, however speaking 
candidly, we have work to do in terms of raising our profile.
    Similar outreach efforts are necessary to get commercial banks 
involved, or in many cases, re-involved as the banks are closer to 
American business, and can advise business on the resources Ex-Im and 
other Federal agencies can offer to increase their sales and increase 
employment.
    Because of our limited resources, we need to use more third party 
``multipliers'' in our outreach efforts. For instance, we are 
redoubling our efforts to partner with senators, Members of Congress, 
Governors, mayors, state legislators and others to host in-state trade 
seminars with local businesses.
    We stand ready to work with you to help finance exports from 
businesses in your states and across the country. And while there is 
still much more to be done, we know how to do it and what the goal is--
to increase U.S. exports--thus increasing U.S. jobs.
    I will be happy to answer your questions.

    Senator Klobuchar. Very good. Thank you very much.
    Ms. Reilly?

       STATEMENT OF LIZ J. REILLY, DIRECTOR, TRADEROOTS, 
                    U.S. CHAMBER OF COMMERCE

    Ms. Reilly. Thank you, Chairwoman Klobuchar, Members of the 
Committee. My name is Liz Reilly, and I'm the Director of the 
TradeRoots program of the U.S. Chamber of Commerce. I greatly 
appreciate the invitation to speak to the Subcommittee on the 
very important topic of export promotion.
    The U.S. Chamber of Commerce is the world's largest 
business federation, representing more than 3 million 
businesses and organizations. TradeRoots is the only sustained 
national trade education program dedicated to raising public 
awareness about the importance of international trade to local 
communities. Our partners include local chambers of commerce, 
trade associations, economic development groups, and Federal 
agencies. Last year we hosted events and visited more than 40 
states--Minnesota and Florida included--where we educated 
businesses about the potential of exporting and the resources 
that are available to do it. Ninety-five percent of the world's 
population live outside of the U.S., and, in these challenging 
economic times, America must find a way to sell our products to 
these potential customers.
    Fifty-seven million Americans are employed by firms that 
engage in international trade. That's one out of five factory 
jobs, and one-third of American farmland that is dependent on 
trade. As the world's largest manufacturer, the U.S. set a new 
record in 2008, exporting nearly $2 trillion in goods. In order 
to maintain this momentum, however, congressional strategy must 
include export promotion. Most Americans regard international 
trade as the domain of large, multinationals, when, in fact, 97 
percent of all exporters--some 250,000 companies--are small 
businesses. We commend Representative Kirk, who just yesterday 
requested the ITC investigate expanding export opportunities 
for small business.
    America's small-business owners are among the most 
innovative and hard-working entrepreneurs in the world. We've 
told many of their success stories as part of our Faces of 
Trade series, which celebrates small companies that are 
exporting ``Made in the U.S.A.'' products around the world. If 
more U.S. small businesses were able to seize export 
opportunities, the gains could be immense. A World Bank study 
found that each $1 spent on export promotion brought a 40-fold 
increase in exports. Forty-to-one is not a bad return on 
investment. On a State level, the Massachusetts Export Center 
has estimated higher rates, at 88-to-1, even better.
    To promote exports effectively on a Federal level, the U.S. 
Chamber proposes a doubling in Federal expenditures on export 
promotion to small business. In 2008, exports accounted for 13 
percent of our GDP. Compared to countries like Germany, who 
export 49 percent of their GDP--U.K., at 34; and Japan, at 19--
we are falling behind and must do better. From Bakersfield to 
Buffalo, many U.S. companies are just not aware of the 
government services that are available to help them break into 
new markets. I've talked to many who have never heard of the 
Department of Commerce Export Assistance Centers or the Small 
Business Administration or the Ex-Im Bank. And it's for this 
reason that TradeRoots facilitates trade education events to 
introduce businesses to these invaluable resources. This lack 
of awareness reflects an inadequate dedication of resources by 
the Federal Government to promote these services.
    Exciting things are happening however in many states that 
we believe could be replicated on a Federal level. One of our 
small-business members, York Wire and Cable, highlighted the 
positive impact of market access grants in Pennsylvania, where 
export-ready companies in good standing are eligible for up to 
$5,000 to explore new markets through trade shows, trade 
missions, and internationalizing their websites. Because of 
these grants, York's exports now represent 17 percent of their 
total sales.
    Enterprise Florida highlighted a partner trade event grant 
that can be up to $10,000, and awarded to counties, 
partnerships, and organizations for export sales missions and 
inbound buying missions and technical support. Market 
Development Cooperator Program, or MDCP grants, are another 
efficient tool for export promotion. TradeRoots was actually 
founded on an MDCP grant, and as a result we reached more than 
3,800 companies and helping to generate more than $9 million in 
U.S. exports. A Commerce Department analysis has shown that for 
every dollar invested in these grants, $100 of exports were 
generated. We support continuing and expanding MDCP grant 
funding.
    Additionally, Congress should ensure adequate funding for a 
sustainable infrastructure and capacity-building system that 
allows American goods to exit the country in an efficient and 
profitable way.
    In closing, investing in the export potential of America's 
small and medium-sized businesses is critical to stimulating 
our economy. In 2008, the National Export Strategy Report noted 
that 30 percent of companies that do not export indicated that 
they would consider it if they had more information on the 
markets, opportunities, and process. We need to make this 
happen.
    I greatly appreciate the opportunity to testify today. The 
U.S. Chamber of Commerce stands ready to work with you on these 
and other challenges in the year ahead.
    Thank you.
    [The prepared statement of Ms. Reilly follows:]

      Prepared Statement of Liz J. Reilly, Director, TradeRoots, 
                        U.S. Chamber of Commerce
    Thank you Chairwoman/Ranking Member Klobuchar, and members of the 
Committee on Commerce, Science, and Transportation Subcommittee on 
Competitiveness, Innovation and Export Promotion. My name is Liz 
Reilly, and I am Director of the U.S. Chamber of Commerce's TradeRoots 
Program. The U.S. Chamber of Commerce is the world's largest business 
federation representing more than three million businesses and 
organizations of every size, sector, and region.
    TradeRoots is the only sustained, national trade education program 
dedicated to raising grassroots support and public awareness about the 
importance of international trade to local communities. We work in 
partnerships with local chambers of commerce, state and local economic 
development groups, Federal agencies, trade associations, and the 
business community. TradeRoots takes the Chamber's message of promoting 
free enterprise through exports to local communities across the 
country.
    Last year the TradeRoots team hosted more than 100 trade education 
events and visited more than 300 Congressional districts in 41 States. 
Many of those states are represented by the members of this 
subcommittee. I greatly appreciate the invitation to speak to this 
committee on ``A World of Opportunity: Promoting Export Success for 
Small and Medium-Sized Businesses.''
Trade Can Bring Growth and Prosperity
    America cannot have a growing economy or lift the wages and incomes 
of our citizens unless we continue to reach beyond our borders and sell 
products, agricultural goods, and services to the 95 percent of the 
world's population that lives outside the United States.
    Trade sustains millions of American jobs. Approximately 57 million 
American workers are employed by firms that engage in international 
trade, according to the U.S. Department of the Treasury. This sum 
represents about 40 percent of the private sector work force. One in 
five factory jobs depends on exports, and one in three acres on 
American farms is planted for hungry consumers overseas.
    Despite a sharp decline in international trade during the final 4 
months of the year, the United States set a new record for exports in 
2008. U.S. exports of goods and services reached $1.84 trillion, 
comprising a record 13 percent of U.S. GDP in 2008, up from 9.5 percent 
of GDP 5 years earlier (2003) and 5.3 percent forty years ago (1968). 
For the first two-thirds of 2008, trade provided a significant economic 
stimulus, partly countering the contraction seen in other sectors of 
the U.S. economy. The benefits reach every state in our Nation.
    More than 96 percent of the Chamber's members are small businesses 
with 100 or fewer employees, and 70 percent of our members have 10 or 
fewer employees. While most Americans tend to regard international 
trade as the domain of large multinationals, more than 250,000 small 
and medium-sized companies export, and their overseas sales represent 
nearly a third of U.S. merchandise exports. In other words, while large 
companies still account for a majority of American exports, smaller 
companies nonetheless play a critical supporting role in trade.
    There are many seasoned exporters among America's small businesses, 
but there are many others that have never even considered exporting. 
However, I know first-hand that America's small business people are 
among the most creative, innovative, and hard working entrepreneurs in 
the world. We have told many of their success stories as part of our 
``Faces of Trade'' series. These stories celebrate companies with fewer 
than 500 employees that are exporting ``made-in-USA'' products to 
destinations all over the world, and depend on new markets for profit 
and growth.
The Federal Government Should Do More to Promote Exports
    If more U.S. small businesses were able to seize export 
opportunities, the gains could be immense. In a sign that they may just 
need a little help, a World Bank study (Exports Promotion Agencies: 
What Works and What Doesn't) found that each one dollar increase in 
export promotion expenditures brought a 40-fold increase in exports. 
The gains were especially large for countries that spend less than the 
average. As it happens, the United States spends just one-sixth of the 
international average helping its small businesses to export.
    Given the limited resources dedicated by the Federal Government to 
support small and medium-sized exporters, some states and even private 
companies have created innovative and effective programs. We believe 
that many of these state programs should be replicated in other states 
and ideally on a Federal level.
    In Massachusetts, the Massachusetts Export Center has created a 
program entitled ``Compliance Alliance'' in an effort to encourage 
additional international business. This program helps companies learn 
to export through seminars and networking events, and ensures they are 
complying with regulations. Last year, their clients reported nearly 
$190 million in export sales as a direct result of assistance provided 
by the Massachusetts Export Center and programs such as this. They 
estimate that the return on investment is 88-1, as the companies that 
were assisted generated over $1.5 billion in export sales in 2008. By 
one estimate, these exports sustain over 3,000 jobs in the state.
    The Nevada Commission on Economic Development has created a no-cost 
program for the state called the International Representatives Program. 
Under this program, independent voluntary representatives are selected 
to run international offices on behalf of the state. They receive 
payments from clients who are interested in these markets and work as 
salesmen on commission. To date, this program is now functioning in 
seven countries, and this has been the first time that any U.S. state 
has created an international representative at no cost to the state. 
Seven other states that have had their funding cut or eliminated are 
emulating this concept with some success.
    One successful manufacturing exporter, York Wire and Cable in York, 
Pennsylvania, recently shared with us the positive impact of Market 
Access Grants (MAGs) in Pennsylvania. These grants are designed to help 
small and mid-sized Pennsylvania companies increase export sales. 
Export-ready companies in good standing are eligible for up to $5,000 
to explore new markets through trade shows, trade missions, and by 
internationalizing websites. York Wire and Cable has taken advantage of 
three MAGs, and as a result its exports have increased over 5 percent, 
boosting the contribution of exports to total sales to 17 percent. We 
believe a similar MAG grant system should be created at the Federal 
level for companies around the country.
    Similarly, Enterprise Florida, a division of the Florida Governor's 
office, is promoting state exports through funding, programming, and 
partnerships. Some successful grants that it administers are Partner 
Trade Event Grants and Target Sector Trade Grants. The Partner Trade 
Event Grants are awarded to counties, partnerships or organizations 
across the state. They range from $7,500-10,000 and cover export sales 
missions, in-bound buying missions and technical support. Target Sector 
Trade Grants are reimbursement grants of up to $4,000 given to 
companies to participate in trade shows and exhibitions in target 
sectors.
    Florida has also created a ``Train the Trainer'' series that 
teaches business executives how to navigate the international 
marketplace in order to feel comfortable exporting. They also offer 
export counseling to Florida manufacturers, export intermediaries, and 
services companies. Under this program, international marketing 
professionals evaluate the market readiness of current and potential 
exporters and help select target markets for a company's particular 
products and services, as well as identify baseline legal, tax, and 
logistics requirements. Last, the state has partnered with the Export 
Yellow Pages (a private company endorsed by the U.S. Department of 
Commerce) to create a Florida Export Directory which increases 
businesses international exposure and allows them to be contacted 
directly by overseas buyers and distributors.
    Private companies are engaging in export promotion as well. One 
California company is partnering with chambers of commerce and 
associations across the country to host trade delegations to China. In 
an effort to promote trade, the firm brings thousands of American 
businessmen and women, along with select local public officials, to 
visit China every year. Because the program has grant funding, the firm 
is able to provide this service at an extremely low cost to 
participants.
    Another private enterprise example is an international airline that 
is offering business grants for companies that are interested in 
international business but cannot afford travel costs. They are 
committed to keeping entrepreneurship alive and to helping stimulate 
global business through their ``Business Opportunity Grants.'' The 
program offers small and medium-sized companies the opportunity to 
travel overseas and conduct face-to-face business meetings that can 
result in new and deeper partnerships, new projects, increased exports, 
and revenue for U.S. cities.
Government Programs Are Inadequately Funded
    According to the Council of State Governments, U.S. states have 
spent over $200 million in state funds for export promotion, 
educational exchanges, and other international programs. This money 
helps to fund a network of more than 200 state trade offices worldwide. 
This however is an insufficient amount of funding to promote exports 
effectively on a Federal level. To address this need, the U.S. Chamber 
has proposed a doubling in Federal expenditures on export promotion, 
with a focus on small companies' exports. The Federal Government 
allocates about $335 million annually to promote the exports of 
manufactured goods. (The Federal Government expends more than twice 
that sum promoting agricultural exports.)
    The assistance offered by the Federal Government needs to be 
promoted more effectively. The services, expertise, and dedication of 
representatives of the U.S. Commercial Service, Export-Import Bank, and 
Small Business Administration are world class, but I have seen first-
hand from Bakersfield to Buffalo that many U.S. companies are not aware 
of the government services that are available to help them break into 
new markets. This isn't the fault of America's small business owners, 
rather it reflects the inadequate resources dedicated by the Federal 
Government to export assistance and a failure to promote these services 
adequately. It is for this reason that TradeRoots puts on programs 
across the United States highlighting the resources that are available 
to companies such as Export Assistance Centers (USEAC), Small Business 
Loans, and World Trade Centers.
    However, the more experienced small business exporters are a 
different story. These are the companies that have taken advantage of 
their USEACs and perhaps taken advantage of Export-Import Bank or Small 
Business Administration Loans. Some companies, such as Askinosie 
Chocolate in Springfield, Missouri, have worked with their USEACs to 
access information about opportunities in countries to which they are 
interested in exporting, even when they cannot afford the fee for the 
U.S. Commercial Service's Gold Key Service. With over 15 percent of 
Askinosie's gross revenue coming from overseas markets, finding new 
ones is imperative to growth.
    Other companies, however, like Quality Float Works in Schaumberg, 
Illinois, have had experiences with U.S. Commercial Service offices 
overseas that are illustrative. Quality Float Works President Sandy 
Westlund-Deenihan reports she normally has great experiences with 
overseas offices of the U.S. Commercial Service, but she recently found 
the offices in Dubai so severely understaffed that they were unable to 
assist her in setting up business meetings. Additional funding for the 
Department of Commerce should eliminate or lower service costs for 
programs like Gold Key and ensure that DOC staff are available to 
assist small businesses who are interested in exporting.
    Some additional successful small business exporters are members of 
the Department of Commerce's District Export Councils (DECs). The DECs 
are organizations of leaders from the local business community, 
appointed by the Secretary of Commerce, whose knowledge of 
international business provides a source of professional advice for 
local firms. For more than 30 years, DECs have served the United States 
by helping companies in their local communities export, thus promoting 
our country's economic growth and creating new and higher-paying jobs 
for their communities.
    Closely affiliated with the U.S. Commercial Service's U.S. Export 
Assistance Centers, the 56 DECs combine the energies of more than 1,500 
exporters and private and public export service providers throughout 
the United States. DEC members volunteer their time to sponsor and 
participate in numerous trade promotion activities and to supply 
specialized expertise to small and medium-sized businesses that are 
interested in exporting. We would recommend selecting an ex-officio DEC 
member to participate on the President's Export Council in order to 
represent small businesses in devising export assistance programs.
    As a tool for export promotion, Market Development Cooperator 
Program (MDCP) Grants are efficient and effective, but in recent years 
they have all but dried up. TradeRoots was actually founded based on an 
MDCP Grant to help small businesses learn about exporting in select 
states around the country. As a result of this grant, TradeRoots 
reached more than 3,800 small and medium-sized businesses and helped 
generate more than $9.2 million in U.S. exports. We support continuing 
and expanding MDCP Grant Funding.
Pending Free Trade Agreements Would Boost Exports
    Another efficient way to promote U.S. exports would be for Congress 
to pass the pending trade agreements with Colombia, Panama, and South 
Korea. A recent analysis by the U.S. Chamber determined that these 
accords would provide an immediate boost for American workers, farmers, 
and companies worth an estimated $42 billion over 5 years.
    Most importantly, these are ``fair trade'' agreements that promise 
a level playing field for American workers and farmers. Many Americans 
don't know that the U.S. market is already wide open to imports from 
these countries, with most imports from Colombia, Panama, and South 
Korea entering our market duty free. However, these countries impose 
tariffs on U.S. products that often soar into the double digits, 
limiting our competitiveness overseas.
    Importantly, according to the most recent U.S. Census data, more 
than 25,000 small and medium-sized companies are already exporting to 
Colombia, Panama and South Korea. We believe this number could rise 
sharply with implementation of these trade agreements. Passing these 
FTA's would reduce tariffs and allow U.S. companies to compete on an 
even footing of those countries domestic suppliers, just like they 
already experience here in the U.S.
    These agreements will open the door to new opportunities for 
smaller U.S. firms in ways that go far beyond just cutting tariffs:

   Non-Tariff Barriers: NTBs are especially harmful to smaller 
        companies because they add to the fixed costs of doing 
        business. A $10,000 permit is a nuisance for a big firm; it can 
        be a show-stopper for a smaller one.

   Intellectual Property: Trade agreements protect the 
        innovation and creative content captured in so many U.S. 
        exports; in fact, these agreements will oblige Colombia, 
        Panama, and South Korea to give protections for intellectual 
        property similar to those in U.S. law.

   Services: These agreements will also open up service sector 
        sales by American companies, expanding the opportunities for a 
        part of our economy that's humming with efficient and 
        innovative smaller companies.

   Government Procurement: These agreements will give American 
        small business expanded access to international government 
        procurement contracts. Those contracts for roads, schools, 
        clinics, and the like are often too small for major American 
        companies to perform profitably. But they are just the kinds of 
        contracts that our smaller construction companies, distance 
        learning companies, and medical equipment companies (to mention 
        just a few) can fulfill beautifully.

    A recent study by the U.S. Chamber entitled Trade Action--Or 
Inaction: The Cost for American Workers and Companies found the United 
States could suffer a net loss of more than 380,000 jobs and $40 
billion in lost export sales if it fails to implement its pending trade 
agreements with Colombia and Korea while the European Union and Canada 
move ahead with their own agreements with the two countries. If the 
U.S. agreements are not implemented, American workers and farmers will 
be put at a competitive disadvantage in Colombia and Korea. For 
example, Canadian wheat farmers will be able to sell their crop to 
Colombians at a steep discount, and European manufacturers will easily 
undercut their American competitors in the Korean market. (See 
www.uschamber.com/trade)
    Delaying approval of these agreements only means American workers 
and farmers will continue to face steep tariffs in these important 
markets--taxes, in fact, paid into those countries' treasuries. These 
agreements are a potentially critical tool for boosting exports by 
America's small businesses.
Infrastructure Investment Is a Priority
    In addition, without a solid and sustainable infrastructure and 
capacity building system, goods produced across the United States will 
not be able to their points of exit in an efficient and profitable way. 
Reauthorization of SAFETEA-LU must be a high priority in order to 
advance a robust, thoughtful, and comprehensive plan to build, 
maintain, and fund a world-class 21st Century infrastructure. Despite 
the recent economic downturn, the growth in international trade is 
still expected to overwhelm U.S. intermodal freight capacity over the 
next 20 years.
    Manufactured goods and cargo move through the United States on a 
system primarily consisting of ports, roads, rail, and inland 
waterways. According to the National Surface Transportation Policy and 
Revenue Study Commission, on a typical day, about 43 million tons of 
goods valued at $29 billion moved nearly 12 billion ton-miles on the 
Nation's interconnected transportation network. The supply chain is 
viewed from initial point of origin to the final destination, with 
frequent junctures in between. To remain competitive domestically and 
internationally, many U.S. businesses have developed complex logistics 
systems to minimize inventory and ensure maximum efficiency of their 
supply chains. However, as congestion increases throughout the U.S. 
transportation system, these supply chains and cargo shipments are 
frequently disrupted and the cost of doing business increases.
    In Memphis, at a hearing of the National Surface Transportation 
Policy and Revenue Study Commission (NSTPRSC), on November 15, 2006, 
Doug Duncan, CEO of FedEx Freight and a Chamber member, summed up the 
freight community's acute interest in infrastructure: ``I'm afraid if 
things don't turn around soon, we'll begin turning the clock back on 
many of the improvements that these supply chains have made and begin 
to restrain commerce instead of support commerce.''
    In order to provide a transportation system that encourages 
exporting in the United States, Congress should develop Federal policy 
and programs that support congestion mitigation and improved mobility 
in urban areas by providing incentives for the adoption of strategies 
and use of technology that maximize the use of existing facilities, 
supporting public transportation capacity, availability and ridership 
strategies and highway capacity where appropriate. By providing Federal 
investment in small communities and rural areas to support connectivity 
to major economic and population centers, it will make it easier for 
more small and medium-sized businesses to access the international 
marketplace and grow their exports.
Conclusion
    Investing in the export potential of America's small and medium-
sized businesses could bring dramatic gains and stimulate the economy. 
Showing how smaller companies can gain from trade would also help build 
political support for international trade. By adding to the ranks of 
small businesses that see direct benefit in exporting, Americans will 
be able to see more clearly the possibilities offered by worldwide 
trade.
    Once again, I greatly appreciate the opportunity to testify today. 
The U.S. Chamber of Commerce stands ready to work with you on these and 
other challenges in the year ahead.
    Thank you very much.

    Senator Klobuchar. Thank you very much, Ms. Reilly.
    Mr. Wollin?

    STATEMENT OF TOM J. WOLLIN, DIRECTOR, INTERNATIONAL AND 
               GOVERNMENT SALES, MATTRACKS, INC.

    Mr. Wollin. Chairperson Klobuchar, fellow Senators, thank 
you for the opportunity to join in this discussion regarding 
the opportunities available for promoting export success for 
small and medium businesses. I am Tom Wollin. I have been 
involved in international and governmental sales at Mattracks 
since June of 2000.
    Mattracks was started by entrepreneur Glen Brazier, but the 
idea for the Mattracks product came from the drawing of his 11-
year-old son. The Mattracks product, as you can see on the 
board there, is a track conversion system. You replace the 
tires of a vehicle with a track corner. What this does is 
provide additional floatation, mobility, and a--and areas where 
you can travel in hard-to-reach--where, currently, wheeled 
vehicles cannot go. It can be used for carrying goods, 
products, or services into these areas.
    Senator Klobuchar. Mr. Wollin, Senator Begich would like to 
amend your testimony to add, it could also carry moose.
    [Laughter.]
    Senator Klobuchar. If you could just add that in there. 
Thank you.
    Mr. Wollin. It is used by sportsmen, as well.
    Mattracks, itself, it is located in the community of 
Karlstad in northwest Minnesota. Mattracks was incorporated in 
1995. At that time, the company employed six people, 
manufacturing and marketing the original model of Mattracks, 
and currently now employs over 40 people and offers over 40 
models of track conversion systems for vehicles as small as 
all-terrain vehicles to vehicles exceeding 20,000 pounds.
    Mattracks' innovative track conversion system caught the 
attention of media in the early 1990s and the 2000s, featured 
in magazine stories and in news and television programs such as 
the History Channel, the Discovery Channel, CNN, and we've even 
been in the movies.
    Mattracks' use of the Internet in its marketing has proven 
to reach North American markets as well as exposing Mattracks 
to an international marketplace. The Mattracks Website has had 
visitors from over 155 countries. Our Lightfoot ATV product has 
reached countries--has reached visitors in 134 countries. 
Global exposure through the media and through the Internet has 
produced significant international market growth for us over 
the years.
    In 2000, when I started with Mattracks, approximately 15 
percent of our sales were outside of the United States and 
Canada. Currently, Mattracks' international business in those 
same areas comprises over 50 percent of our sales--let's see--
experiencing growth in over 55 international markets and track 
systems on use in--on all seven continents.
    So, how does a small manufacturing company with a very 
unique product get to that point? Can our success be replicated 
by other companies looking for growth internationally? We think 
it can. And here is the path that we took.
    We were introduced to the U.S. Commercial Service' 
Minneapolis office in late 1990, as international interest and 
requests for the Mattracks product were becoming more frequent. 
But, Mattracks didn't take advantage of all the services that 
were available at that time. But, later we became even more 
aware of the international exposure of the U.S. Commercial 
Service as we and our dealers became more involved in 
international shows and exhibits.
    Here are some examples. Turkey, in 2005: Ihsan 
Muderrisoglu, from the Commercial Service office in Ankara, 
Turkey, worked with our Turkish dealer at a military defense 
exhibit and then worked with us during our visit to the U.S. 
embassy with our dealer that same year.
    Chile, 2006: While attending a defense exhibit in Santiago 
with our representatives there, we visited the U.S. Commercial 
Service personnel at the show. The experience helped us to 
begin to realize the international presence of the Commercial 
Service.
    Kazakhstan, 2007: Oil and gas exhibit in Almaty, 
Kazakhstan, Mattracks was again involved in visiting the U.S. 
Commercial Service personnel, reinforcing the presence of the 
Commercial Service internationally.
    In 2007, the U.S. Commercial Service Fargo office began 
working with northwest Minnesota territories. Commercial 
Service representative Heather Ranck and Sharon May, visited 
Mattracks. They made a sales call and explained the services 
available to Mattracks. One of the services that we have 
employed is the Gold Key Service. This service allows a small 
company such as Mattracks to use the resources of the U.S. 
Commerce Department to review potential markets, potential 
buyers, agents, dealers, and distribution channels for a 
nominal fee.
    Here are some of the examples of how Mattracks used the 
Gold Key Service. In Ankara, Turkey in 2008, Commercial Service 
helped find new customers for our current dealer in Turkey. 
This has led to an expanded interest by, and demonstrations to, 
oil and gas companies, one of our biggest sectors, as well as 
the military in Turkey.
    Russia, 2009: Commercial Service helped find--locate 
distributors for Mattracks product. This has led to three new 
additional dealers for us in an area that we did not have 
before.
    South Africa, 2009: Commercial Service personnel helped us 
review the potential for new markets in South Africa. This led 
to Mattracks' work in developing new products to better match 
this area and other potential markets internationally.
    China, 2009: Network with Commercial Service personnel. 
Mattracks met with Commercial Service officer from China who 
was in our region for the Big Iron Agricultural Show in Fargo, 
North Dakota. The strategy session that we had with them proved 
to be beneficial, and Mattracks and the Commercial Service 
office in Shenyang are working on the establishment of a 
significant distribution channel for Mattracks in China.
    Another service Mattracks has used is the International 
Company Profile. The ICP provides basic due diligence on 
potential customers, dealers, and partners. The information 
gathered by the Commercial Service is relevant and fresh. A 
site visit can be made with the country to verify the 
information provided via other media.
    Mattracks has representatives on the North Dakota Export 
Council, as well. The DEC provides a fantastic forum for the 
exchange of ideas and the mentoring of companies new to 
exporting or companies looking to enhance their export growth. 
The DEC chapters around the country need to be supportive, 
because you need to be supported to provide this valuable 
resource to as many companies as possible.
    Even with the success listed above, there are roadblocks 
for U.S. companies, big and small, when they export their 
products internationally. Tariffs, duties, value-added taxes 
can make the cost of products in the U.S.--U.S. products 
extremely prohibitive overseas. For example, our own product, 
an American product that has a dealer cost of $35,000 when it 
leaves our shores, can have a final cost reaching $60- to 
$70,000 when it reaches its destination. But again, the 
Commercial Service has helped us in finding the correct and the 
most beneficial product code listing so that the tariffs are 
reduced as much as possible for our dealers and our product 
overseas.
    International Sales Growth helps Mattracks sustain the 
growth and the expansion of the company, allowing Mattracks to 
continue to provide stable, quality employment opportunities in 
northwest Minnesota. Providing stable employment in the region 
is important to the future of Mattracks, their employees, and 
the Minnesota communities where our employees live.
    Mattracks is located in a region in Minnesota that 
experiences business closing and out-migration of the labor 
force, creating a very fragile economy. The economic viability 
of Mattracks, companies like Mattracks, and the region we call 
home are directly linked to the ability to retain quality 
employees and attract new employees. International Sales Growth 
is integral to the Mattracks plan for success.
    These services and resources, offered by the Commercial 
Service locally and around the world, have been extremely 
valuable to the growth of Mattracks' international business. We 
know other companies, like us, using these resources have the 
opportunity to duplicate our success. Members of this 
subcommittee, as a small business we need all the tools 
possible to build strong business, businesses that will support 
our employees, their families, our communities. Do not put a 
lock on that toolbox. Do not take away these tools out of our 
hands. Allow us to build our dreams, and then our employees, 
their families, their communities will live their dreams.
    Thank you.
    [The prepared statement of Mr. Wollin follows:]

            Prepared Statement of Tom J. Wollin, Director, 
          International and Government Sales, Mattracks, Inc.
    Thank you for the opportunity to join in this discussion regarding 
the opportunities available for ``Promoting Export Success for Small 
and Medium-Sized Businesses.'' I am Tom Wollin. I have been involved in 
International and Governmental Sales at Mattracks since June of 2000.
    Mattracks was started by entrepreneur Glen Brazier, but the idea 
for the Mattracks product came from a drawing by his 11-year-old son, 
Matt. The first rubber track conversion system was manufactured in 
1992. The ``Mattracks Rubber Track Conversion Systems'' are rubber 
tracked ``corners'' that can replace the tire and wheel combination on 
four wheel drive vehicles and other machines. Mattracks provides extra 
traction, floatation, and year-round mobility in all types of off road 
conditions and terrain. Mattracks, Inc. is located in the community of 
Karlstad, in northwest Minnesota.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mattracks, Inc. was incorporated in 1995. At that time, the company 
employed six people, manufacturing and marketing the original model of 
the Mattracks rubber track conversion system. Currently, Mattracks 
employs over 40 people and offers over 40 models of track conversion 
systems for vehicles as small as All Terrain Vehicles (ATV's) to 
vehicles exceeding 20,000 pounds.
    Mattracks innovative track conversion system caught the attention 
of media in the early 1990s and the 2000s, featured in magazine 
stories, on the news and on television programs such as ``The History 
Channel'', ``The Discovery Channel'', CNN, and even movies.
    Mattracks use of the Internet in marketing has proven to reach 
North American markets, as well as exposing Mattracks to an 
international market. The Mattracks website has had visitors from 155 
countries; the LiteFoot ATV Product website has had visitors from 134 
countries. Global exposure through media and the Internet has produced 
significant international market growth over the years.
    In 2000 when I started with Mattracks approximately 15 percent of 
sales were outside of the United States and Canada. Currently, 
Mattracks' international business comprises over 50 percent of sales, 
experiencing sales growth into over 55 international markets, with 
track systems in use on all 7 continents.
    So, how does a small manufacturing company with a very ``unique'' 
product get to this point? Can our success be replicated by other 
companies looking for growth internationally? We think it can. Here is 
the path we took.
    We were introduced to the U.S. Commercial Service's Minneapolis 
Office in late 1990s as international interest and requests for the 
Mattracks Product were becoming more frequent. But Mattracks didn't 
take advantage of all the services that were available.
    But later, we became even more aware of the international exposure 
of the U.S. Commercial Service as we and our Dealers became involved in 
international shows and exhibitions. Some examples:

   Turkey 2005. Ihsan Muderrisoglu, from the Commercial Service 
        Office in Ankara, Turkey worked with our Turkish Dealer at a 
        military defense exhibit, and then with Mattracks during our 
        visit to the U.S. Embassy with our dealer that same year.

   Chile 2006. While attending a defense exhibit in Santiago, 
        Chile with our representative, we visited with the Commercial 
        Service personnel at the show. This experience helped us begin 
        to realize the international presence of the Commercial 
        Service.

   Kazakhstan 2007. Oil and Gas Exhibit in Almaty, Kazakhstan. 
        Mattracks was again involved in visiting with Commercial 
        Service personnel, reinforcing the presence of Commercial 
        Service internationally.

    In 2007, the U.S. Commercial Service's Fargo Office begins working 
with the Northwest Minnesota territory. Commercial Service 
Representatives Heather Ranck and Sharon May, visited Mattracks and 
explain the services available to Mattracks.
    One of the services Mattracks has employed is the Gold Key Service. 
This service allows a small company, such as Mattracks to use the 
resources of the U.S. Commerce Department to review potential markets, 
and potential partners, agents, dealers, or distributors for a nominal 
fee. Here are some examples of how Mattracks has used the Gold Key 
Service:

   Ankara Turkey, 2008: Commercial Service helped find new 
        customers for our current dealer in Turkey.

     This has led to expanded interest by and 
            demonstrations to oil and gas companies and the military.

   Russia, 2009: Commercial Service helped find local 
        distributors for Mattracks Product.

     This led to the addition of three new Mattracks 
            Product Dealers.

   South Africa, 2009: Commercial Service Personnel helped us 
        review the potential for a new market in South Africa.

     This led to Mattracks work developing new products to 
            better match this and other potential markets.

   China, 2009: Network with Commercial Service Personnel.

     Mattracks met with a Commercial Service Officer from 
            China who was in the region for the Big Iron Agriculture 
            Show in Fargo, ND. The strategy session proved to be 
            beneficial and Mattracks and the Commercial Service office 
            in Shanyang are working on the establishment of a 
            significant distribution channel in China.

    Another service Mattracks has used is the International Company 
Profile (ICP). The ICP provides basic due diligence on potential 
customers, dealers and partners. The information gathered by the 
Commercial Service is relevant and fresh. A site visit can be made in 
country to verify information provided via other media.
    Mattracks has a representative on the North Dakota Export Council 
(DEC). The DEC provides a fantastic forum for the exchange of ideas and 
the mentoring of companies new to exporting or companies looking to 
enhance their export growth. The DEC chapters around the country need 
to be supported to provide this valuable resource to as many companies 
as possible.
    Even with the successes listed above, there are roadblocks for U.S. 
Companies big and small when they export products internationally. 
Tariffs, duties, and value added taxes can make the costs of U.S. 
Products extremely prohibitive. For example, an American product that 
has a dealer cost of $35,000.00 when it leaves our shores can have a 
final cost reaching $60,000 to $70,000.00 when it reached its 
destination! U.S. innovation and product quality can overcome many 
obstacles, but a doubling in price can be crippling. The removal of 
these types of trade barriers are also needed to insure new and 
continued sales growth internationally.
    International sales growth helps Mattracks sustain the growth and 
expansion of the company, allowing Mattracks to continue to provide 
stable, quality employment opportunities in Northwest Minnesota. 
Providing stable employment in the region is important to the future of 
Mattracks, their employees and the Minnesota communities where their 
employees live. Mattracks is located in a region of Minnesota that 
experiences business closings and out-migration of the labor force, 
creating a fragile economy. The economic viability of Mattracks, 
companies like Mattracks, and the region we call our home are directly 
linked to the ability to retain quality employees and attract new 
employees. International sales growth is integral to Mattracks ``plan 
for success''.
    These services and resources offered by the Commercial Service 
locally and around the world have been extremely valuable to the growth 
of Mattracks' international business. We know other companies like us, 
using these resources have the opportunity to duplicate our success. 
Members of this Subcommittee, as a small business we need all the tools 
possible to build strong business; businesses that will support our 
employees, their families, and our communities. Do not put a lock on 
this toolbox; do not take these tools out of our hands. Allow us to 
build our dreams, and then our employees, their families, and their 
communities will live their dreams.
    Thank you.

    Senator Klobuchar. Thank you very much.
    Mr. Pierce?

           STATEMENT OF BRADLEY E. PIERCE, PRESIDENT,

            RESTAURANT EQUIPMENT WORLDTM

                   (A PIERCE SALES CO., INC.)

    Mr. Pierce. Yes, good afternoon. I would like to thank both 
you, Chairwoman Klobuchar, as well as the other Members of the 
Subcommittee. I would also like to personally thank Senator 
LeMieux for inviting me here today.
    I'm speaking to you today on behalf of the National 
Federation of Independent Businesses. I--my name is Brad 
Pierce, and I'm President of a small business, called 
Restaurant Equipment World, which sells commercial restaurant 
equipment and supplies. We're a family-owned company, based in 
Orlando, Florida, with approximately 45 employees. Over the 
past 33 years our company has sold goods to more than 75,000 
customers in all 50 states and 100 countries internationally.
    Our primary method of going to market is through the 
Internet, using the e-commerce business model, although we also 
utilize a small, privately owned aircraft, which allows us to 
travel safely and efficiently for frequent face-to-face 
meetings with our customers and with our suppliers. This is a 
method that I refer to as a high-tech, high-touch approach.
    Exporting has been a vital part to our business. And just 
this past week, actually, I returned from a business meeting in 
Dubai, where I had meetings with a number of clients to 
actually sell more U.S. goods. In the case of our company, we 
haven't actually used any of the government export programs, 
and have instead--we've forged this road on our own. This is 
really the area that I wanted to talk with you today.
    It seems that there's a lack of communication with small 
businesses that these programs are even available to us. I 
think that the majority of small businesses in this country 
view these types of government assistance programs as really 
only being catered toward the large businesses and these 
multinational corporations. It's certainly a shame, considering 
there are 24 million small businesses in this country, and 
approximately 80 percent of the new jobs in this country are 
created by small business.
    The really good news in this story is that we've found that 
the ability for a company such as ours to export goods to 
another country is a process which isn't broken. We've never 
run into a single issue exporting to any country where our 
customers have asked us to. With the help of knowledgeable 
freight forwarders and customs agents it's actually quite a 
palatable process, which has paid huge dividends to our 
company.
    The only real caveats we've run into in regards to 
exporting is the lack of protection for intellectual property 
and fraud that has been experienced in these dealings. That 
problem, however, runs deeper and really even exists 
domestically, with law enforcement agencies being ill-equipped 
to handle the needs of small business in that regard. Aside 
from these issues, though, however, overall, the ability for 
U.S. companies to actually move products and goods globally 
works extremely well.
    While we've been exporting through the trials and 
tribulations of doing it ourselves, I think that many other 
small businesses, as we've seen with this meeting here today, 
haven't been quite so fortunate; and in many cases, I don't 
think the small businesses really even know where to begin. To 
change this tide, I would certainly like to see the U.S. 
Government take a much more proactive role. In this troubled 
company--I see how much our business has been aided by exports, 
not only to survive but actually to grow as a company, and 
would like to certainly see other companies benefit in the same 
manner.
    I believe the best way to accomplish this is by developing 
outreach programs through groups such as the NFIB and local 
business licensing organizations, the Chamber of Commerce 
associations. It's important for us to publicize that these 
programs are readily accessible to small businesses, that they 
are very effective, and that they're going to be very easy for 
us to engage.
    I feel that many small business operators in this country 
generally view government assistance programs as being laden 
with red tape and additional burdens, including countless forms 
and procedures, thereby causing companies to just simply shy 
away from them and spend their time doing more efficient 
activities instead. This perception really needs to be changed. 
Small-business operators need to be informed that these 
government programs are here to help you, and to partner with 
you, to make your business stronger, and, in turn, our entire 
nation stronger. That message will help people, such as myself 
and other small businesses, to actually embrace what you're 
promoting, rather than just writing off the idea of 
participating. Providing meaningful testimonials and metrics 
with success stories and any promotional materials that are 
developed will certainly aid, as well, in developing a feeling 
that these programs are worthwhile for us to engage.
    I truly believe that the government as partners with us, 
working hand in hand together, we can certainly increase our 
export trade. This will save U.S. jobs, it will provide an 
increase in revenue, it will help us to recover faster from the 
current economic downturn, and it will make us stronger as a 
nation together.
    Thank you for allowing me to address you today.
    [The prepared statement of Mr. Pierce follows:]

          Prepared Statement of Bradley E. Pierce, President, 
   Restaurant Equipment WorldTM (A Pierce Sales Co., Inc.)
    Good afternoon and thank you for the honor of allowing me to 
testify before you today. My name is Brad Pierce and I'm speaking to 
you on behalf of the National Federation of Independent Businesses. I 
am President of a small business called Restaurant Equipment World 
which sells commercial restaurant equipment and supplies. We are a 
family owned company based in Orlando, Florida and have approximately 
45 employees. Over the past 33 years, our company has sold goods to 
more than 75,000 customers in all 50 states and more than 100 countries 
internationally. Exporting has become a vital part of our business and 
just last week I returned from Dubai where I had meetings with clients 
to sell more U.S. made goods. In the case of our company, we haven't 
used any of the government export programs and have instead forged this 
road on our own. This was the area which I wanted to talk with you 
today. It seems that there is a lack of communication with small 
businesses that these programs are even available. I think that the 
view of a majority of small business operators is that government 
assistance programs of this type are only focused toward large 
businesses. That is certainly a shame considering there are 24 million 
small businesses which create approximately 80 percent of the new jobs 
in this country.
    The good news is the ability to export goods from our county is a 
process which isn't broken, since we've yet to have any issues 
exporting to wherever our customers have asked us to. With the help of 
knowledgeable freight forwarders and customs agents, it's quite a 
palatable process which has paid huge dividends to our company. The 
only real caveat we've run into is in regards to the lack of protection 
against fraud and intellectual property when dealing internationally. 
That problem however runs deeper and even exists domestically as well 
with law enforcement agencies being ill-equipped to assist small 
businesses. Aside from these issues, overall, the ability for U.S. 
companies to actually move goods and export products globally works 
very well.
    While we've been successful in exporting through the trials and 
tribulations of doing it ourselves, many other small businesses haven't 
been so fortunate and in many cases don't even know where to begin. To 
change this tide, I would like to see the U.S. government take a more 
proactive role in regards of exporting. In this troubled economy I see 
how much our business has been aided by exports, to not only survive, 
but to grow as a business. I would certainly like to see other 
companies benefit in this same manner.
    I believe the best way to accomplish this is by developing outreach 
programs through groups such as the NFIB and local business licensing 
organizations. It's important to publicize that assistance programs are 
readily accessible to small businesses, effective, and are easy process 
to engage. I feel many small business operators in this country 
generally view government assistance program as being laden with red 
tape and additional burdens including countless forms and procedures, 
thereby causing companies to shy away from them to spend time on more 
efficient activities. This perception needs to be changed. Small 
business operators need to be informed that these government programs 
are truly here to help you and partner with you to make your businesses 
stronger and in turn our entire nation stronger. That message will make 
people such as myself and other small business operators actually 
embrace what you're promoting rather than writing off the idea of 
participating. Providing meaningful testimonials and metrics with 
success stories in any promotional materials will certainly aid in 
developing a feeling that these programs are worthwhile to engage. I 
truly believe that as partners with the U.S. Government working hand in 
hand together, we can certainly increase our export trade. This will 
save U.S. jobs, provide an increase in revenue, help for us to recover 
faster from the current economic downturn, and make us strong as a 
nation. Thank you for allowing me to address you today.

    Senator Klobuchar. Thank you very much.
    Do you want to start with questions, Senator LeMieux?
    Senator LeMieux. I'd be happy to. Thank you very much, 
Madam Chair.
    I think that the contrast in the experience that Mattracks 
has had and Mr. Pierce's company is an interesting point for us 
to start our questions.
    Mr. Wollin talked about this partnership that really 
happened between the Commercial Service and his company. And 
then Mr. Pierce's company is sort of out there on their own, 
doing good work, trading in all these countries around the 
world, without the benefit of the Commerce Department.
    So, I guess my first question for Ms. Lipsitz is, you know, 
What do you do in the Commerce Department to make sure that you 
are uniformly getting good results across the country? You 
could have a crackerjack person working in Wisconsin, and maybe 
not the best person working in Florida. So, what metrics do you 
use, what performance measurements do you use, how do you, you 
know, track your folks in your different states and communities 
to make sure that you're getting the best result for the 
American people?
    Ms. Lipsitz. Thank you very much for that question. Let me 
just add a clarifying point, and that is, with regards to the 
National Restaurant Association, we may not be visible in 
helping them from this end, but we certainly are from the other 
end. So, for example, we have a global team that is dedicated 
toward franchising. And this team is comprised of franchising 
experts from around the world, from our USEACS to our overseas 
offices, and they follow the global trends and work with 
companies that are looking at exporting and opening franchises 
overseas.
    And our franchising operation, as they grow, as they go 
overseas, they take U.S. manufacturers and service providers 
with them. So, for example, with Mr. Pierce's company, we did 
help them in 2004 in Saudi Arabia in making a sale to a pizza 
company. So, even though we may not be helping them on this 
end, we are helping them on the other end.
    With regards to your question, we have performance measures 
as to how many new-to-export companies we assist, how many new-
to-market companies we assist, how many increase-to-market we 
assist, and we follow those and divide those goals and those 
performance measures among our networks, among our offices.
    Senator LeMieux. And then your managers follow up with your 
various folks in different states, and say, you know, ``Joe in 
this State, Susie in that State, you're not doing as well as 
someone in another State, or we're not seeing the kind of 
results out of you that we're getting in Wisconsin,'' for 
example?
    Ms. Lipsitz. That's right, and we give them goals and we 
give them targets.
    Senator LeMieux. OK.
    Ms. Lipsitz. So, and we have 300 trade professionals in the 
United States, and that's what they spend most of their time 
on. They go out there, and they try to knock on doors, they try 
to get the word out, and try to reach those companies that we 
have not done business with yet.
    Senator LeMieux. It seems like such low-hanging fruit for 
this country to be focused on this.
    Ms. Lipsitz. I couldn't agree with you more.
    Senator LeMieux. You know, my experience in Florida is, we 
have Enterprise Florida, which is sort of our State arm. And we 
work--businesses really work hand-in-hand with--whether it's 
the Chamber, or NFIB--with Enterprise Florida, putting these 
trade missions together. The Governor leads them. And they're 
really wonderful opportunities for small, mid-, and large-size 
companies. So, to the extent that you work with them, or you 
can increase your presence in a State like Florida, I think 
it's tremendous.
    We've heard these numbers about the return on investment 
that you get for every dollar that you spend, whether it's $50 
or $75. No matter what it is it's a fantastic result. And if 
just--you know, if there are 24 million small businesses in 
America and they hired one more person each, we wouldn't have 
an--you know, as much of an unemployment problem in this 
country, so your work's very important.
    And, to that, I want to go to the larger topic, which I 
mentioned in my opening statement, which is these trade 
agreements, and trying to get a trade agreement with Colombia 
and other countries. It makes so much sense to me for 
Americans, and especially Floridians, to have the opportunity 
to have trade with these other countries. It's going to create 
more jobs. It's going to get more people hired. It's going to 
give the opportunity for more people to have health insurance, 
since we have employment-based health insurance, currently, in 
this country. So, can you tell us what the Administration's 
view is on trying to get these free trade agreements--the three 
that I mentioned--off the blocks and before the Congress?
    Ms. Lipsitz. Yes, Senator, I am here to talk about trade 
promotion, so I would--I wrote down your comments on the free 
trade agreements. I'd leave that to the policy arm within the 
International Trade Administration, and to the U.S. Trade 
Representative Office. So, if I can take that for the record, 
and we will get back to you on that.
    [The information referred to follows:]

            Question for the Record: Senator LeMieux (R-FL)
    Question. What's the latest Administration thinking on submitting 
the completed FTAs (Panama, Colombia and Korea) for Congressional 
consideration?
    Answer. Panama, Colombia, and South Korea are valued economic and 
political partners of the United States. Approval and implementation of 
the pending FTAs is an important priority in the Administration's trade 
policy agenda. The agreements have the potential to create significant 
new economic opportunities for our workers, manufacturers, farmers, 
ranchers, and service providers. The Administration is working to 
address outstanding concerns relating to each of the pending FTAs.
    Panama: In the case of Panama, we are seeking to address concerns 
with certain aspects of Panamanian laws, including its labor regime. 
Successfully addressing these concerns will be an important step in 
determining when, in close consultation with the Congress, this 
agreement should be considered.
    Colombia: Colombia is a friend and ally, and the Administration is 
committed to deepening our economic relationship. The U.S. Government 
is working with the Colombian Government, the U.S. Congress and key 
stakeholders to identify the further steps that Colombia needs to take 
to ensure that workers' fundamental labor rights are protected in law 
and practice. Successfully addressing these concerns will be an 
important step in determining when, in close consultation with the 
Congress, the agreement should be considered.
    Korea: The KORUS FTA is the most commercially significant free 
trade agreement the United States has concluded with another country in 
16 years. President Obama and President Lee committed in their November 
summit meeting to work together to move the FTA forward. In his State 
of the Union and in recent remarks to House Republicans, President 
Obama noted the close alliance with Korea and the need to seize market 
opening opportunities. The KORUS FTA could provide a much-needed boost 
to the economies of both South Korea and the United States during a 
time of economic uncertainty. While the KORUS FTA has the potential to 
provide significant benefits to the United States, I also recognize 
that concerns remain with the Agreement, particularly with respect to 
autos and beef. The Obama Administration will be consulting extensively 
with Congress and other stakeholders to understand fully the exact 
nature of any concerns and how they can be addressed. Addressing these 
concerns will determine when, in close consultation with Congress, this 
agreement should be considered.

    Senator LeMieux. OK, I appreciate that. It's a very 
important issue for Florida.
    And if I have some more time, which I think I do, I'll just 
quickly ask a question of Ms. Reilly.
    Tell us about what successes you've had in doing your 
information--communication with various businesses. What works 
the best? Educate us on your models that have worked really 
well, so we can use that for other companies around the 
country.
    Ms. Reilly. Well, the TradeRoots division, which is what I 
run, is actually a trade education program that--we partner 
specifically with all of the resources that are available. So, 
when we go into communities, we really localize it for wherever 
we're going.
    So, for example, last year I was in over 300 Congressional 
districts, doing these trade education programs, and every 
district is different and has different challenges and 
different businesses. So, we really localize that. We like to 
find good companies, like Mattracks, that are finding success, 
and use them as sort of the role model, but, then again, be the 
matchmaker for all of the resources that are available.
    But, we can't do that--again, we're the U.S. Chamber, we're 
here in D.C. So we really strongly rely on all of our partners 
and our chamber network. So we have over 3,000 chambers that 
are out there, throughout the country, that are there to--happy 
to be our partner and facilitate these programs, where we can 
then bring in the local export assistance center, bring in 
whoever the regional rep is for Ex-Im Bank, or bring in the 
regional rep for SBA.
    And I have to say, all together, those programs are very 
successful, but we just wish we could do more.
    Senator LeMieux. Well, thank you for doing what you do.
    And in closing, Madam Chair, I want to say that there is 
a--there is definitely a sports-enthusiast application for 
Mattracks in Florida, so--I saw on there about swamps--we have 
a lot of hunters and others who like to go out there. They use 
track vehicles now, but they're not--they're old-style, half 
track and full track, so you may have a market in Florida.
    Mr. Wollin. We do have a market there already, and it's 
been quite successful.
    [Laughter.]
    Senator LeMieux. Great. Thank you.
    Thank you, Madam Chair.
    Senator Klobuchar. All right, very good.
    Senator Begich?
    Senator Begich. Thank you very much, Madam Chair.
    Again, thank you all for your testimony. It gave me some 
questions and enlightened me on a few of the programs.
    What I want to ask--Mr. Pierce, you--your testimony was 
interesting, because you've kind of done it on your own, in 
essence. And I guess, not to get you into the debate of trade 
agreements, but did trade agreements have any impact in your 
business capacity?
    Mr. Pierce. I really think, in our particular case, they 
didn't, as overall we're essentially a wholesaler, and we then 
will work with the export agents. They really deal with a lot 
of that nitty-gritty of what can be done, what can't be done. 
We essentially get the products to them and they work with 
locals within the countries, whoever--whether you need a local 
citizen, like you need in some countries, to be involved in 
this--they really handle that aspect, which is really why I say 
it's quite easy, from a small-business perspective.
    Senator Begich. Very good.
    Ms. Albright, you had mentioned--I appreciate your coming 
here, and as you noted, you don't do this that often--but, I 
would be very interested, from our State, to inquire--maybe you 
can get us off the record at a different time--how we could 
work with your agency to set up a trade expo potential--of 
education. You may have done that already, in Alaska, but I 
think there's a lot of opportunity that we see, especially in 
our raw material products, but also some of our finished final 
product. So, maybe we could have that discussion.
    You mentioned that you assist in some states in regards to 
trade expos. I think that would be a--you know, part of it's 
educating people on what's available. And is that something 
that would be of interest, or is that something we can follow 
up at a later time with?
    Ms. Albright. Yes, absolutely, Senator. And thank you very 
much for the question. We are--a number of us have come into 
the organization, over the last few months as part of the 
Administration, to work with what is already a very capable 
staff at Ex-Im Bank, and one of the things that we're looking 
at is how we can expand the reach of the Bank throughout the 
country, particularly in areas that we measure by having a high 
job intensity, meaning the extent to which the business creates 
jobs.
    And one of the reasons why we're doing, currently, our 
eight-city tour is to reach out to an initial set of cities. 
One of those set of--one of those cities is Seattle, and we'll 
be there over the next few weeks. In particular, our Chairman, 
Fred Hochberg. It may very well make sense to extend that trip 
up to Alaska, and--you know, but short of that we'd be happy to 
send some of our staff out to visit with particular exporters 
in your state to see where the opportunities are, or to have 
conference calls, or what have you.
    So----
    Senator Begich. Fantastic.
    Ms. Albright.--we're a small organization, but we're 
immediately ready to reach out and speak to whoever in your 
state thinks would the--would benefit from our services.
    Senator Begich. Great. I will do some follow up on that. 
That's very good.
    Ms. Albright. Love to do that.
    Senator Begich. Thank you very much.
    And if I--is it Ms. Lipsitz?
    Ms. Lipsitz. Lipsitz.
    Senator Begich. Lipsitz. You had mentioned CommerceConnect. 
Can you expand on that just a little bit? It is being announced 
now, or in the process of being announced?
    Ms. Lipsitz. Yes. Secretary Locke is in Detroit right know, 
announcing the first pilot, which is basically a one-stop 
shop----
    Senator Begich. OK.
    Ms. Lipsitz.--for Federal business. So, when he came 
onboard, he recognized that U.S. businesses had a hard time 
navigating the Federal system, and he thought, by bringing them 
all together in one place and having one resource available to 
them, it would be extremely useful for U.S. businesses.
    Senator Begich. Very good.
    And the question that was asked earlier regarding, ``How do 
you determine the results of your work, in essence, with medium 
and small businesses?''--do you do--you know, I get these 
things all the time from the Census Bureau--which I don't think 
they do anything with, to be very frank with you--you know, 
six, seven, eight-page things I get as a landlord and an 
apartment owner. They ask me all kinds of questions, which--I 
never really see the data later, that I can ever use. But, how 
do you use--in the sense of growing people to utilize your 
services, what's the material that you get back, and how do you 
send that back out into the community? Or, do you do some sort 
of information-gathering survey? I know there was a little 
discussion on it. But, how do you feed it back? Does that make 
sense?
    In other words, if you are delivering services, to 
determine if what you are delivering to the small businesses 
and medium-sized businesses, is actually being used and getting 
a benefit out of--in other words----
    Ms. Lipsitz. Yes, Senator----
    Senator Begich.--you may be delivering it, but they may not 
be seeing a benefit. How do you measure that component?
    Ms. Lipsitz. We do do surveys. We have a customer-relations 
management division within the Commercial Service, and they 
survey every single company with whom we have some interaction.
    Senator Begich. Great.
    Ms. Lipsitz. We have 16 services that we offer, be it from 
trade missions to international buyer program to the Gold Key, 
you've heard, to helping companies at trade-show events. And we 
survey our customers, and we get responses back.
    Senator Begich. Great.
    Ms. Lipsitz. And we take that into consideration in our 
analysis on how we determine which companies to go after, or 
which markets to go after.
    Senator Begich. Can you share that, at least with me? I'd 
be very interested in, kind of, what the latest results of that 
survey or surveys that you've done, just some of that data 
collected.
    Ms. Lipsitz. I will take that on record and get you some 
information, yes.
    Senator Begich. Fantastic.
    Last question. What would you say, out of all that 
information, is the one, two, or three top hurdles that the 
small business or medium-sized businesses identify? Maybe you 
can't answer that right now, but I'd be very interested in, 
What are those three things they identify, through this data, 
that, ``These are the struggles that we have''?
    Ms. Lipsitz. The hurdles vary. You know, I mean, first of 
all, the biggest hurdle that we have right now is getting the 
information out. And so, you have heard that repeatedly through 
here, that----
    Senator Begich. OK.
    Ms. Lipsitz.--we need to do more outreach, and we need to 
figure out how to do more of that.
    This hearing is a wonderful way for us to get exporting on 
the front pages of the newspapers and for U.S. companies to 
recognize our services.
    Do I keep going?
    Senator Begich. No, go--yup. That's not your buzzer. 
That's--they're just telling us all kinds of things through 
little coded signals. Pay no attention.
    [Laughter.]
    Ms. Lipsitz. The reason why we claim that we try to broaden 
our mandate is to broaden and deepen the base of U.S. 
exporters. We broaden it because we've tried to go after those 
companies that have never exported before.
    Senator Begich. Yes.
    Ms. Lipsitz. They have different hurdles and different 
issues to deal with than those companies that are expanding 
into new markets. So, it really depends on the product and the 
market.
    Senator Begich. Very good.
    Thank you very much for all your testimony.
    Senator Klobuchar. Thank you.
    I know Mr. Pierce had mentioned this idea of testimonials 
and metrics to get the information out there. Do you have that 
for people, so they can see that this as more than just a long 
name of a government program?
    And could you talk a little bit, Ms. Lipsitz, in detail 
about what Secretary Locke is proposing? Because it does seem 
to me--with so many different agencies working on this, to try 
to cut through that red tape, and figure out who they call, and 
how they get the kind of help that Mr. Wollin got.
    Ms. Lipsitz. Well, Secretary Locke has gone on record 
saying that one of his top priorities is trade promotion. And 
to that end, he is convening, as I mentioned in my oral 
testimony, the Trade Promotion Coordinating Committee, which is 
comprised of 20 Federal agencies, though the heads of those 20 
agencies are getting together later this month to talk about a 
strategy and coordinate the trade promotion efforts of the U.S. 
Government.
    Senator Klobuchar. And I asked about, sort of, some 
details----
    Ms. Lipsitz. On the Commerce----
    Senator Klobuchar.--the testimonials----
    Ms. Lipsitz. On the CommerceConnect?
    Senator Klobuchar. Yes.
    Ms. Lipsitz. It's basically a one-stop shop. There are 20 
agencies, as I said, that are involved in Federal--in trade 
promotion. And a company comes in to CommerceConnect; they're 
going to look for, ``How do I protect my trademark?'' So, we 
will have access to Patent and Trademark Office. ``How do I 
increase my competitiveness?'' We'll have representatives or 
direct--or be able to guide people how to help that. We'll find 
ways to get them to Export-Import, and OPIC, and trade 
development agencies, so they have access to financing. So, 
it's basically a one-stop-shop for the Federal Government and 
for the Department of Commerce.
    Senator Klobuchar. OK. You know, and once--the thing that 
most interested me about Mr. Wollin's story, just being up 
there, is--you know, they are really in an isolated area.
    What do you call it, Begich? ``Extreme rural,'' that's what 
he calls it. It's not just ``rural,'' it's ``extreme rural.''
    [Laughter.]
    Senator Klobuchar. And so, when I heard his story, what 
captivated me about this was that, having been to Asia only a 
few weeks before--I was there with--I went with Senator McCain 
and Senator Graham--and just meeting with some of the Chamber 
of Commerce people there, and it was a lot of major 
corporations and people that obviously had major roles to play 
in these countries--but, just the thought of being a small 
business and trying to figure out how to find potential 
customers there is very daunting. So, what is your breakdown of 
people that you have in foreign countries and people you have 
in the United States, in terms of working with these? And I 
don't necessarily have a direction I want to go with this. I'm 
just trying to figure out what's the best way to help them to 
get new customers.
    Ms. Lipsitz. Well, I don't have the exact numbers with me 
right now, but we--I can guarantee you that we have many more 
people overseas than we do domestically. And--I'm sorry, can 
you repeat----
    Senator Klobuchar. So, I'm just wondering, does--you know, 
he----
    Mr. Wollin, maybe you want to say how you did this. You 
went--did you go to the--you went to the Fargo people first? Or 
did you go to trade shows, and you met people from Commerce 
there? Or how did it work?
    Mr. Wollin. Initially, the office that was responsible for 
our area was out of Minneapolis, and they visited us and 
discussed with us what was available to us.
    Senator Klobuchar. So, I would think you would need that 
initial help before you just landed in a foreign country. With 
your----
    Mr. Wollin. It makes----
    Senator Klobuchar.--big trucks.
    Mr. Wollin.--it so much smoother. We are told----
    Senator Klobuchar. Yes.
    Mr. Wollin.--constantly to work smarter, not harder. And in 
that instance, finding that information out first is 
worthwhile. For us, the information that comes to us from 
potential marketplaces through the Internet, through mail, 
through phone calls, we take and we gather. And when we find an 
area that is experiencing an unusual amount of interest in our 
product, many times we have set up where we will go, now, to 
the U.S. Commercial Service. Going there blank----
    Senator Klobuchar. So, when you go to that country, then 
you go to the U.S. Commercial Service there?
    Mr. Wollin. Correct. We work through our--at this point, 
the Fargo office, which is responsible now for Northwest 
Minnesota, we contact them, express to them an interest in, let 
us say, South Africa. And so, the country that the U.S. 
Commercial Service is in, that we're looking at, South Africa, 
the Fargo office will contact them, provide them with 
information on our product and the type of markets that we 
market to right now. Is--and ask them, Is there--look out 
there. Is there potential places for this product there? Is 
there potential interest? Do you know of dealers that would be 
a good match for this product?
    They will get together with us on a conference call. We 
will visit. We will go over items that we are looking for in 
dealers. And then they provide us--all of a sudden, they will 
provide us with a list of potential clients.
    Is there the interest? ``Yes, there is.'' Who would be best 
matched to sell our product overseas? ``Here is a portfolio of 
eight customers. Take a look at them.'' We will go through that 
Gold Key portfolio, sort out the ones that we want to visit 
with further, and then go overseas, and, with the help of 
Commercial Service' office, the embassies, interview those 
potential candidates----
    Senator Klobuchar. OK.
    Mr. Wollin.--and look at the marketplace, as well.
    Senator Klobuchar. OK.
    Ms. Lipsitz?
    Ms. Lipsitz. So, to answer your question, companies find 
us, or we find them----
    Senator Klobuchar. Yes.
    Ms. Lipsitz.--through a variety of ways, Through our trade 
specialists in the United States that are knocking on doors, 
going to Chamber events, going to townhall meetings, the 
seminar--the export seminar program that Ms. Albright talked 
about yesterday, I participated in, in New York. And we go out 
and we reach companies. We have partnership programs with 
private-sector companies.
    One of our partners is in this room today. They have helped 
us reach out to over a million companies. And once they enter, 
here in the United States, we seamlessly pass them over to our 
offices overseas.
    We also operate the Trade Information Center, which is a 
hotline. They receive 36,000 calls a year. Most of them are 
from small and medium-sized companies. They can get into our 
system that way.
    Senator Klobuchar. Very good.
    Ms. Albright, I know that, under Federal law, the Export-
Import Bank can have outstanding, at any one time, $100 billion 
in loans to U.S. exporters. Is that right?
    Ms. Albright. Yes, that is, Senator.
    Senator Klobuchar. OK. And right now there's only about $65 
billion out there, and the remaining 35 billion is an untapped 
resource for small businesses. So, how do we try to use some of 
that money? As you've explained, it's not at the taxpayer 
expense. These are loans, and so, that means you must be 
getting the money back. How do we best make that money 
accessible to small and medium-sized businesses?
    Ms. Albright. Thank you for the question, Senator. You're 
absolutely right. Right now, our maximum capacity that we could 
live up to is $100 billion, and we use about $65 billion. And 
typically, between 15 and 20 billion of that rolls over 
annually, although the year that we've just concluded, the 
number is closer to 21, because of the financial crisis. So 
you're absolutely right.
    You're also absolutely right, in terms of the--what I'll 
call the overall profitability of the organization, in the 
sense that it is self-sustaining. So, once we generate, you 
know, market-based fees for the products that we offer, we're 
able to cover both the cost of our credit reserves as well as 
our administrative expenses, and then return amounts of money 
to the Treasury every year. So, we are self-sustaining, as far 
as the taxpayer is concerned.
    In terms of increase, I think it's a very simple answer. 
And I'm thrilled to be able to hear all the good work that all 
of my colleagues are doing, because I think it's really a 
matter of outreach. Ex-Im Bank has about 385 staff, of which 
about 30 or 40, only, are engaged in small-business outreach.
    And so, we need to work very much with all of what we call 
our ``multiplier friends'' out there, in both the Federal level 
of government, as well as at the State level, to really get the 
story out there about Ex-Im Bank's services. One of the things 
that's really taken me, having principally been a banker in my 
life, but now joined the government, is what a tremendous 
product it is. It's very straightforward, it's very cost-
effective, and it really addresses the needs.
    So, I think it's a matter of outreach. And one of the 
things that the new folks at Ex-Im Bank are going to be doing 
is really looking at how we can expand our outreach efforts 
through things like the TPCC. We've always--also met with the 
U.S. Trade Representative, we are in close touch with the folks 
at the administration, also, at the State and local level, with 
our trade seminars, for example, to just simply get the word 
out there. So, I think it's really just pounding the pavement.
    Senator Klobuchar. Very good. Thank you.
    Senator LeMieux?
    Senator LeMieux. I think the last--the responses to the--
Madam Chair's questions are really illuminating.
    And, you know, I've been going to meetings in Florida, 
Chamber meetings, business group meetings, whether it's at the 
State or local level, for years. And I've never heard of the 
work that you do. The only time that I know of the Commerce 
Department is when I went on trade missions, and we went to the 
embassy. And there was the Commerce Department staff that was 
working with us, once we got there, to get the work done.
    Now, it might be that I missed the meeting that the 
Commerce Department person showed up for. But, what I think 
would be really helpful is to have more of these folks on the 
ground in this country, so that Mr. Wollin and Mr. Pierce--Mr. 
Wollin has the good experience, Mr. Pierce doesn't really hear 
of you; we come to find you got some help overseas, but--so 
that they--these folks, and folks like them, hear about this 
experience. And, you know, whatever help that we can be to help 
you gain more boots on the ground in this country to spread the 
good message, we want to do that.
    And second is, you know, I'd like to have someone from your 
offices down to Florida, that--where we could have a meeting, 
an expo with--bring the Chamber together, associate industries, 
NFIB, and all these folks, have you come to those meetings and 
tell the good work that you're doing, what--you or someone from 
your organizations. Because I know that there are folks in 
Florida who don't know this. And I'm sure it's true in other 
parts of the country.
    So, I'd like to gain your commitment to do that, if you 
would, and----
    Ms. Lipsitz. That was going to be one of my asks of you.
    Senator LeMieux. Right.
    Ms. Lipsitz. Yes, we--yes----
    Senator LeMieux. Good. Thank you. And--well, let us know 
what else we can do to help you.
    And thank you, Madam Chair.
    Senator Klobuchar. Thank you.
    Senator Begich?
    Senator Begich. I just have a couple of quick comments. 
One, we'd love to have someone from the Commerce Department in 
the area of trade to actually be located in Alaska. We don't 
have anybody. So, that's just a--I was listening to what your 
comment was, and it's a very good comment, that there's a lot 
of activity, and Alaska's a vast State. And that is one--just 
to be very frank. We have people from NOAA and so forth, from 
the Commerce Department, because of our fishing industry, which 
is great, because we promote and have, you know--we have 62 
percent of the fishing market of the whole country, in Alaska, 
and a sizable amount is exported. So, I would just give that 
back as an opportunity to see with us. So, thank you for 
triggering my thoughts there.
    The other thing, I guess, if I can expand, just one quick 
one on the data. And I know our time--we're getting close to 
some votes, potentially. But, how many folks, or volume of 
business--can you measure the volume of business that you've 
been able to expand, or--I know the Export Bank can do that 
very quickly--but, from the Commerce Department, are there data 
points that you can show, that say, ``Here's what we've done; 
and by the way, here's the new business generation of income 
that's been produced in American jobs,'' as well as--obviously 
these companies will have relationships overseas. Do you have 
that kind of data that you could share?
    Ms. Lipsitz. This goes back to your question on the 
surveys.
    Senator Begich. Yes.
    Ms. Lipsitz. And, yes, we have some data that we are 
working on, with regards to our 2009 statistics.
    Senator Begich. OK.
    Ms. Lipsitz. Please recognize that not all companies report 
accurately----
    Senator Begich. Right.
    Ms. Lipsitz.--what they do overseas, on our surveys, so, it 
is the information----
    Senator Begich. I wouldn't venture down that path why, but 
I'll leave that for another----
    Ms. Lipsitz. Right.
    Senator Begich.--discussion. But, there are some data 
points that you can generate for us.
    Ms. Lipsitz. Yes.
    Senator Begich. Excellent.
    Madam Chair, I don't have any additional questions, but I 
just, really--again, it's enlightening, and I'm glad to hear 
some of the efforts to see the marketing is a key component of 
at least your two agencies, and what you can do to get more 
people connected. So, I appreciate your willingness to kind of 
step out there and try new avenues.
    Thank you.
    Ms. Lipsitz. Thank you.
    Senator Klobuchar. Thank you. We are living on borrowed 
time. They haven't called the vote yet.
    So, I thought I would ask each of you just what you think 
would be the most helpful, in terms of promoting more export 
promotion for small and medium-sized businesses. One or two 
ideas.
    I know Senator LeMieux and I are very interested in this. 
If there are ways Congress can help--and Senator Begich, as you 
can see--beyond bringing people to Alaska, what other ideas do 
you think would be helpful in terms of funding, in--and not 
just funding, but just how we get this out there, how we work 
with Secretary Locke? Because I think we see this as a real--in 
a very difficult economic time, it's an untapped resource. And 
all of our comments about not knowing about what everything 
your agency does, it's not necessarily to be seen as a 
negative; it's that we want to promote it more, and we also 
want to see how we can make it work better on a coordinated 
basis.
    So, if each of you could think of a few things. Maybe I'll 
start with you, Ms. Reilly, because you haven't gotten many 
questions. What you would see as things that could be most 
helpful from the government in this regard.
    Ms. Reilly. Right. I refer to, actually, quite a few State 
programs that are going on, in my written testimony, and I 
don't want to belabor what all the details are about those. 
But, there's a series of grants that have been very effective 
in states, specifically for small business. Nevada has an 
interesting program, called the International Representatives 
Program, that actually is no cost to the State, where basically 
people work as salesmen and kind of commission in foreign 
countries to recruit business, and they've found extreme 
success in Nevada, and there has been seven states that have 
replicated that--as well as, there's a wonderful program, 
Export Alabama, that the Governor's been very involved with 
down there, bringing trade missions and business meetings 
together, and that sort of thing. So, I would encourage you to 
look at some of those State programs.
    But, on a Federal level, we would encourage--the three 
suggestions would be basic government coordination, which I 
think we've talked a lot about today. Again the TPCC is 22 
agencies. It's a very big, big entity that--I don't know how 
you navigate that and how you promote that. In addition to 
that, the lack of resources is a real issue. I think when you 
look at the resources that are devoted specifically for export 
promotion, regarding agriculture exports, it's over 600 
million, but when you look at manufactured goods it's a little 
over 300 million. So, just about half.
    And I think with more resources you could have more bodies 
on the ground, more of these export assistance centers, that 
could be more available to the businesses.
    And then the final thing that I would just say for the 
record is obviously opening up new markets for business, 
through things like trade agreements.
    Senator Klobuchar. OK, very good.
    Mr. Pierce?
    Mr. Pierce. Sure. I think that really reaching out, as I 
talked about in my testimony, to groups, and really to where 
businesses are, where businesses are listening.
    One idea that I had was in regards to business licensing. 
Everybody needs an occupational license, everybody needs 
certain things to run their business. Well, there's a point 
that, as the government, you can pop in there and say, ``OK, 
you're getting a business license, and you're doing X, Y, Z 
activity. Have you thought about exporting? Are you interested 
in this? This is something where we can put you together with 
some of these programs.''
    I think, as a small business operator, I'm excited about 
hearing all the good work that these organizations are doing. 
I, unfortunately, had to come to this forum to really hear it--
--
    [Laughter.]
    Mr. Pierce.--and it would be nice that, as you start a 
company, that somebody says, ``This is out here.'' That we 
reach out----
    Senator Klobuchar. So, this would be when you get your 
State license, you're talking about.
    Mr. Pierce. Yes, like a State licensing, or--certainly, I 
think that all of us----
    Senator Klobuchar. It's just--everyone's----
    Mr. Pierce.--as businesses, deal with the IRS, or with 
different government entities. There's--certainly, there's 
enough communication and mediums that latching on to those 
and--that you could latch on and do some promotion.
    Senator Klobuchar. OK, good.
    Mr. Wollin?
    Mr. Wollin. My biggest suggestions would be getting more 
feet on the ground. The office became much more closer to us 
when it was moved to Fargo. We had an opportunity where people 
showed up. Have them do a sales call. Have Commerce Service--
Commercial Service--do a sales call. How do you get more 
business for Commercial Service? Put the feet on the ground. 
Make them do a sales call.
    But, here's another thing that has happened recently. Our 
Commercial Service office sent out an e-mail with regards to 
travel, that they would not be going on a trade mission 
overseas--with a group on a trade mission--because there was a 
travel blockage. Travel was not allowed. How can you take 
somebody that is wanting to promote business and tell them the 
office that they're working with, the people that have directed 
them all this time, all of a sudden, ``Well, you know, you're 
going to go overseas to Kazakhstan, and--but we can't go with 
you.''
    When we had Commercial Service with--on a trip to Turkey, 
from our local office--with the trade group that was there, 
answers were immediate. Negotiations were taking place 
literally at dinner with various businesses. And how else can 
you get that, without having those people on the ground, 
visiting you, telling you what's available, and also available 
to travel with you?
    Senator Klobuchar. So, you're talking about people 
traveling from Fargo, or are you talking about people--when you 
go to Kazakhstan, that people are----
    Mr. Wollin. Both ways, because you still need that 
interaction and I think the local one is very important.
    Senator Klobuchar. OK. Very good.
    Ms. Albright?
    Ms. Albright. I'd very much echo what my colleagues have 
said. I think, certainly, coordination at the Federal level. 
Our biggest challenge at Ex-Im Bank is reach. We're a very 
small organization, and it's very hard to reach all the small 
businesses that we think are out there, throughout the country, 
that need us. And so, any folks that you all know of in your 
states and at the local level that can be helpful to us in 
getting to customers that might be of interest to Ex-Im Bank 
and need Ex-Im Bank, we'd be very grateful for.
    And, Senator LeMieux, we're going to be in Miami, and we'd 
be delighted to meet with whoever you think we should, so I'd 
be happy to follow up with your staff.
    Senator Klobuchar. And so, it's--is the Bank going to be 
part of this group, with the----
    Ms. Albright. Yes.
    Senator Klobuchar.--ConnectCommerce, and the work that 
Locke is doing, then?
    Ms. Albright. Yes.
    Ms. Lipsitz. Yes.
    Senator Klobuchar. OK. Because I would think that would 
be--if we could get one coordinated place, and a website, and 
places people can get information featuring that, these loans, 
and how this works there, would also be a good thing.
    Ms. Albright. Absolutely. We're in close touch with you 
all.
    Senator Klobuchar. OK. And do you want to end there, Ms. 
Lipsitz?
    Ms. Lipsitz. I would be pleased to end.
    Let me just give you some low-hanging fruit. One way that 
you can help is by putting a link on your websites that talk 
about exporting, a link to the U.S. Commercial Service for 
companies that go visit your Website. Another way that you 
might be able to help is if you would allow us to train your 
staff, both here and back in your states, about the services 
that we offer, so that they can go out and they can be 
multipliers for us.
    Senator Klobuchar. Very good idea.
    Ms. Lipsitz. The townhall meetings, back in your home 
states, and----
    Senator Klobuchar. You want to go there, Ms. Lipsitz?
    Ms. Lipsitz. I would be pleased----
    Senator Begich. We'll send you right up there.
    [Laughter.]
    Senator Klobuchar. No, continue on. Continue on.
    Ms. Lipsitz. The townhall meetings and the Exporting 101 
seminars that we put--we host back in your home states would be 
another opportunity for you to come. Use your name, use your 
expertise as a draw to bring companies there, and then we'll 
take it from there. We'll provide the content.
    And when you go overseas--I don't know if you had an 
opportunity to visit with our offices overseas, but we can give 
you--we can pre-brief you, before you go overseas, about the 
opportunities, from a commercial perspective, over there, and 
we can also give you an in-country commercial briefing. So, I 
urge you to take advantage of our services, as well.
    Senator Klobuchar. OK. Very good. Thank you.
    Anything anyone else wants to add?
    [No response.]
    Senator Klobuchar. OK, well, very good. I really 
appreciate--this has been our first hearing on this topic since 
we took over, and we are very excited to be working with all of 
you, and some of the new developments with the coordination, 
and look forward to helping you in any way, so we can get the 
world of opportunity to our small and medium-sized businesses.
    The record for the hearing will remain open for 2 weeks.
    The hearing is adjourned.
    [Whereupon, at 4 p.m., the hearing was adjourned.]
                            A P P E N D I X

          Prepared Statement of Hon. John D. Rockefeller IV, 
                    U.S. Senator from West Virginia
    I want to thank all of today's witnesses for their testimony before 
the Subcommittee and for their ongoing work to promote America's 
businesses and products abroad.
    America has always reached out around the globe, through its 
exports. Now, as the world grows ever more connected, exports have 
taken an even greater role in our economic livelihood. For the past 5 
years, American exports have grown at double-digit yearly rates and 
have increased from 9.5 percent to 13 percent of our gross domestic 
product (GDP). U.S. exports now support six million jobs in the 
manufacturing sector and nearly one million jobs in the agricultural 
sector.
    And yet, we could be doing even more to realize America's full 
export potential. Exports account for a smaller portion of American GDP 
than other leading exporting nations. Less than 1 percent of U.S. 
businesses export overseas and nearly 60 percent of these companies 
trade with only one foreign country.
    Small and medium-sized businesses in particular have not taken full 
advantage of potential markets abroad. But that can and should change. 
As our economy continues to struggle, overseas markets for American 
exports represent a tremendous opportunity to spur growth here at home. 
Firms that engage in overseas trade tend to have higher rates of 
productivity growth and pay higher wages to their workers.
    It is a powerful investment that pays great dividends: according to 
the National Association of Manufacturers, one dollar invested in 
export promotion generates $100 in new business. Sometimes the return 
can reach $300 for each $1 invested. By leveraging U.S. competitiveness 
and tapping new markets, we can narrow our trade deficit and create 
quality jobs.
    And the Federal Government plays a key role: its agencies and their 
policies translate that investment into real opportunity for American 
businesses and workers. At least 20 Federal agencies, along with 
countless businesses, trade associations, and even local government 
offices in states like West Virginia are actively working today to 
promote trade abroad. Chief among them are the International Trade 
Administration (ITA) at the Department of Commerce, and the Export-
Import Bank and we must ensure they have the resources to do their job.
    With today's hearing we can examine their work, learn from their 
success, and discuss new ways to maximize their efforts. In particular, 
I want to explore interagency effectiveness, strategies for monitoring 
and enforcing increasingly complex trade rules, and how they apply to 
small and medium-sized businesses.
    I want to thank Senator Klobuchar for chairing this important 
hearing and I look forward to working with our colleagues to make 
export promotion a priority in the months ahead.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Tom Udall to 
                             Liz J. Reilly
    Question. I led a trade delegation in 2006 to explore the 
possibility of opening up trade between the Navajo Nation and Cuba. I 
know the Chamber of Commerce supports efforts to broaden economic 
engagement with Cuba as a way to create commercial and people-to-people 
contacts that will promote a transition to democracy and full civil 
liberties on the island. Ms. Reilly, what are your thoughts on how 
American businesses--in particular small businesses--could take 
advantage of opening trade with Cuba?
    Answer. The U.S. economy as a whole will benefit from lifting the 
embargo. Cuba is a natural market for U.S. products. Prior to the 
embargo, the United States accounted for nearly 70 percent of Cuba's 
international trade. The agricultural, tourism, oil, and mining sectors 
in particular stand to make significant gains from lifting the embargo.
    While current law allows agricultural and medical goods to be 
exported to Cuba, only large multinationals find it worth the effort to 
export to Cuba. A 2007 U.S. International Trade Commission report 
states that small exporters avoid the Cuban market because of the 
complexity of the regulations imposed by the Trade Sanctions Reform and 
Export Enhancement Act (TSRA). Removing restrictions on trade with Cuba 
would provide small and medium-sized enterprises (SMEs) with access to 
a much needed market in these difficult economic times.
    The 2005 Bush Administration amendment of TSRA cash-in-advance 
payment rules leave small and medium-sized exporters out in the cold 
when it comes to doing business in Cuba. Under the embargo, exporters 
to Cuba cannot take advantage of private U.S. financing of the sales, 
direct payments by Cuban banks are prohibited, and all payments must be 
routed through third-country banks. SMEs do not have established 
relationships with foreign banks, so these requirements create an 
additional impediment for sales of U.S. products to Cuba. Additionally, 
requiring payment before goods depart a U.S. port places our exports at 
a significant competitive disadvantage. As a result, U.S. agricultural 
sales to the island decreased by nearly 15 percent in the 2 years 
following the 2005 amendment of TSRA's term payments of cash-in-
advance. Applying the commercial term of cash-inadvance payments to 
require cash on delivery, rather than cash before products leave U.S. 
ports, would reestablish the natural competitive advantage of U.S. 
products.
    Restrictions on the ability to travel for the purpose of 
establishing commercial relationships also significantly impacts the 
ability of U.S. firms to trade with Cuba. U.S. exporters often lose out 
to third-country competitors because of the significant delays travel 
restrictions place on the ability to transact commercial sales. U.S. 
business travel to Cuba to explore the market would create additional 
commercial opportunities. Additionally, lifting the restrictions on 
visits from Cuban officials to confer with U.S. suppliers, inspect 
facilities, and discuss sanitary and phytosanitary issues would greatly 
benefit the sale of U.S. food and agricultural exports to Cuba.
    Dismantling policies that prohibit trade and investment in Cuba 
will reduce the transaction costs that place U.S. agricultural products 
at a competitive disadvantage. Once the embargo is lifted, the U.S. 
Chamber is confident that small businesses will trade as successfully 
with Cuba as they have with the rest of the world. In fact, 97 percent 
of all exporters are SMEs and SMEs account for over 30 percent of all 
U.S. exports ($312 billion).
    In 2001, the International Trade Commission estimated that the 
embargo cost U.S. exporters up to $1.2 billion annually in lost sales. 
The U.S. Chamber recommends that an updated study be conducted to 
evaluate the missed opportunities for U.S. farmers, businesses, and 
workers that are currently being taken up by our allies and trading 
partners.

                                  
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