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.
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