Local companies can help balance U.S. trade

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  • | 12:00 p.m. March 2, 2006
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by Bradley Parsons

Staff Writer

America’s trade gap is growing, but the Jacksonville Port Authority is looking south to Latin America to keep local trade more balanced.

Last year, U.S. imports outnumbered exports by $726 billion. The trade deficit means the country consumes more than it produces. It has become a source of worry on Wall Street, but has elicited a shrug of the shoulders from Main Street.

On the docks at the Port, local trade looks a bit more balanced. Director of Communications Robert Peek said the split is about 55 percent to 45 percent between imports and exports, although those figures include trade with Puerto Rico.

The government’s trade figures don’t include Puerto Rico, a U.S. territory. But Puerto Rican trade still benefits the local economy, said Jorge Arce, director of the U.S. Commercial Service’s Jacksonville office. About 70 percent of the Port Authority’s overseas trade runs through Puerto Rico.

“There’s a quirk there in the numbers locally in that we have significant trade with Puerto Rico,” said Arce. “What constitutes foreign trade is in the eyes of the beholder. We still see the benefits.”

Arce’s office helps local businesses wade into the global market. He sees a lot of room for improvement in Jacksonville’s exports. While cheap overseas labor has made it tough for American manufacturers to compete across borders, Arce said the global market has plenty of room for high-end American goods and services.

Americans still hold the high ground in providing services like health care and consultation in business, design and human resources. Local companies like the Haskell Company and Mayo Clinic have found receptive markets abroad, he said.

Arce has some advice for business owners who aren’t yet involved in the global market: smarten up.

“The average American company doesn’t think internationally period, and to be blunt the reason is ignorance. We’ve been at war in Iraq for four years and there are a lot of people who couldn’t point it out on a map,” said Arce.

Businesses that ignore the international market are turning their back on a market growing in size and wealth, said Arce. Most businesses with Web sites don’t realize that 30 percent of their hits are coming from overseas, he said.

“That’s potential business that people are just ignoring,” said Arce. “I don’t know too many businesses that survive by ignoring 30 percent of the market.”

A few clicks on the keyboard can be the first step toward tapping into that market. Arce steers business owners toward www.export.gov, which is sponsored by the U.S. government. The site includes all the core information needed to start shipping across borders, including a basic export primer and CIA profiles on potential markets.

But even CIA intelligence won’t do much good without a good product to peddle. Arce said American’s shouldn’t compete on price. Instead they should sell quality.

“If you manufacture some kind of product that can be reproduced overseas, you’re going to be out of business in five to ten years,” said Arce. “If you’re American, you’re not going to be the cheapest, so don’t go that route. People buy American for quality products, not cheap products.”

Arce sees a particular demand for America’s marketing expertise. Americans know how to build a brand, he said. That’s why the Chinese have lately been in the market for famous American brands like Maytag appliances and IBM’s Thinkpad laptop computers. They don’t know how to build their own, said Arce.

Local proprietors of raw materials will also find a receptive market in China’s explosive manufacturing sector. Arce said local companies could profit by supplying the raw materials to fuel the Chinese manufacturing engine.

“We send them chemicals, grain, cement, wood, capital equipment and high-end machine tools,” said Arce. “We can sell them the things they need to make the goods they sell to us.”