What do you call a U.S. Federal Government initiative that has been succinctly introduced, relatively widely supported, and arguably well-coordinated with other job-spurring initiatives in today’s constantly changing political and uncertain economic environment?
While it may sound like the punch line of an over-done Tea Party advertisement - interestingly, this is no political joke. The Obama Administration’s “National Export Initiative” (“NEI”), which was announced last January at President Obama's State of the Union address and implemented by Executive Order in March 2010, has survived and thrived over this past year of divisive partisan politics in Washington and now confronts new leadership in the House, just as the GOP is confronting shifting dynamics within its own party. Believe it or not, the NEI has been called a “bright spot” in a year of political turmoil and gridlock.
So what is the NEI, and what does it mean for small and large U.S. businesses alike? The NEI outlines the ways in which the U.S. government can expand its efforts to assist businesses to win more foreign government contracts, receive more export financing, and learn new ways to sell their goods overseas with the goal of doubling U.S. exports by 2015. The initiative recognizes that approximately 95 percent of the world’s customers lie outside the United States, and that current U.S. export controls still exist in the context of post-Cold War era realities and thus require major reform.
Current U.S. exporters will have undoubtedly noticed the succession of Proposed and Final Rules issued reforming U.S. export controls laws and regulations to reflect “a system where higher walls are placed around fewer, more critical items.” Since last year, lawmakers have begun transforming the legal system governing exports through the issuance of Executive Orders and agency rulemaking, including: rules fundamentally altering classification and licensing requirements for “dual use” and “defense” articles, and technology governed by the U.S. Departments of Commerce and State; relaxing of controls regarding exports of “encryption items;” removal of various defense and space-related entities in India from controls in furtherance of U.S.-Indian commitments to strengthen global nonproliferation and bilateral export control cooperation between the countries; and the tightening of various U.S. embargoes implemented by the U.S. Department of the Treasury. U.S. exporters must monitor these changes to the basic laws and regulations governing their export business in order to ensure that they remain in compliance and as efficient as possible.
Another central focus of the NEI is the provision of additional assistance to small and medium-sized businesses, which are major drivers of new job creation. Recently, the U.S. Export-Import Bank announced a new initiative aimed at assisting small businesses export their products. The Bank is looking to double its transaction volume with small businesses, which would include increased access to credit lines, and assistance to insurers and small suppliers that sell parts and other materials to larger exporters, also by 2015. The Bank's new programs were endorsed by both the top Democrat and Republican on the Senate Small Business Committee. Additional overlap of the goals of this export initiative are seen, for example, in support for the Trans-Pacific Partnership, which is a pan-Asian free trade agreement aimed at Asia-Pacific regional economic integration.
Given the relationship between these international trade issues and domestic economic policy, we expect international trade and U.S. export control reform to remain key issues in the 112th Congress regardless of who is in control of the House and/or Senate.
Venable's Legislative and International Trade Practices are closely following these events and are well-situated to assist U.S. companies interested in the NEI. Expect more focus on expanding U.S. exports and how that might translate into new jobs - only this time, it may be more than just the same old politics.