Chapter 3:
Export Promotion Services 


US companies seeking to expand export sales already can draw on
governmental networks of domestic and overseas trade specialists,
Washington-centered sources of information and assistance, and many
state/local and private services.  The TPCC in the spirit of reinventing
government aims to better coordinate and expand these services to make
them more useful to private sector clients.

This chapter discusses the strengths and weaknesses of 1) the current
domestic network for trade promotion, 2) Washington-based trade
promotion services, 3) overseas network, 4) coordination with state
export promotion activities, 5) efforts by the US government to play an
advocacy role on behalf of US exporters, and 6) efforts to promote
environmental technology exports.  Each section describes what is
already in place, sets goals for improvement, and recommends changes in
approach and process to achieve these goals.


DOMESTIC FIELD NETWORK


The domestic field network that provides export promotion services now
consists of a wide range of federal and state government agencies and a
variety of private sector providers, including trade associations and
chambers of commerce.  Each of these entities plays an important role in
helping US firms sell abroad.

However, there is duplication of effort and a need for greater
coordination and leveraging of resources among public and private sector
export service providers.  The domestic export service network is
deficient in two primary respects:  (1) domestic export services are not
readily available to clients in one centralized place; and (2) trade
finance assistance is not fully integrated with information, marketing,
and counseling services.

To contribute to a more effective export-facilitation network, it is
important that the federal government improve the coordination of export
services among its agencies.  This section gives a brief description of
the current role of each of the providers of export promotion services
and then describes the steps that the federal government should take to
improve the delivery of its services in the field.


Federal Government Role:  Federal government activities in the field are
carried out primarily by the US&FCS, SBA, Eximbank, and USDA.

o         The US&FCS maintains a national network of 69 export facilitation
          offices in industrial and commercial centers.  District offices
          provide counseling to export-ready businesses and deliver a wide
          range of programs and information to facilitate exporting.  Since
          1990, they have focused their resources solely on export-ready
          businesses.  The Minority Business Development Agency (MBDA), a
          sister agency of the International Trade Administration (ITA), has a
          field network of 100 Minority Business Development Centers (MBDCs). 
          These centers serve as points of contacts for small, minority
          businesses which are in the developmental stage of business planning.

          MBDCs serve as referral points for nonexport-ready clients who need
          start-up assistance. 

o         SBA, in conjunction with its Office of International Trade and its
          more than 100 field offices, promotes sales and joint venture
          opportunities for American small business goods and services abroad. 
          In addition to a variety of export promotion activities, SBA offers
          international trade loan guarantee programs, including long-term and
          working capital financing.  SBA also assists small business exporters
          in locating other export financing sources.  

o         Eximbank, which has five regional offices, offers insurance, loans,
          and guarantees to assist US exporters in financing the sale of their
          goods and services to creditworthy overseas purchasers.  Eximbank's
          working capital guarantee program enables private financial
          institutions to provide necessary capital to produce goods and
          services for export.  Eximbank uses commercial financial
          institutions, insurance brokers, and city/state partners as delivery
          systems for its product line.

o         USDA uses the resources of state departments of agriculture to
          service exporters at the state and local levels.  It provides these
          departments with export program and service information and
          coordinates the delivery of export education seminars, trade events,
          and related information and services.


State and Local Government Role:  As a result of the dramatic increase
in international trade over the last two decades, state governments have
made trade promotion an integral component of their economic development
programs.  States now are major international service providers and
significant players in export promotion, collectively spending more than
$100 million each year on trade development.  States provide a wide
range of services, including counseling, market assistance, financing
information, financial support in certain cases, evaluation of
opportunities, information on markets, and product placements.  (See
section on State Export Promotion Activities.)

In an effort to coordinate and streamline the delivery of export
promotion services, several states and federal agencies have begun to
co-locate their offices.  States and the federal government also have
established numerous joint activities, which include co-sponsorship of
trade events, seminars, and the constant exchange of trade materials and
data.  States want the US&FCS district offices to coordinate their
activities more closely with state offices in order to use scarce
resources more effectively and to avoid duplication.  US&FCS has
instructed district offices to coordinate their work with their state
counterparts, agreeing on actions and responsibilities that each will
undertake.


Private Sector Role:  The private sector provides the full range of
export facilitation services.  It fills a critical role in export
development, although the capabilities, resources, and export
orientation of private organizations vary widely from locality to
locality.

Private sector export service providers include nonprofit business
associations and other organizations (e.g., chambers of commerce, trade
and industry associations, economic development councils, universities,
small business development centers, and those world trade centers
organized as nonprofit entities).  Nonprofit organizations are generally
active in export promotion activities involving export education, basic
business assistance, referral to appropriate export service providers,
and organization of industry-specific trade events. 

There is a full range of for-profit direct export service providers
(e.g., banks, export management and export trading companies, consulting
firms, world trade centers, law firms, and freight consolidation and
transportation services).  For-profit export service businesses offer a
virtually unlimited range of direct business services at market prices. 
Other public and private nonprofit service providers complement and
supplement the services of for-profit businesses, with services oriented
particularly to small and intermediate-sized businesses that are not yet
prepared for or financially able to afford the generally more
sophisticated fully market-priced services.

An example of a unique form of private sector trade development activity
is that of the Market Development Cooperator Program -- a joint venture
of the federal government and the private sector.  The program is
designed, through a financial grant arrangement, to assist trade
associations and nonprofit industry organizations working together with
the Commerce Department to develop, maintain, and expand foreign markets
for nonagricultural US goods and services.

On the international front, our foreign competitor nations, particularly
in Western Europe, have been successful in channeling export promotion
services through private and quasi-private organizations such as local
and regional chambers of commerce, in close cooperation with national
government agencies.  (See Appendix A for a description of the export
promotion activities of five industrial nation competitors.)


GOALS


1.        Develop a more rational, efficient, and coordinated delivery network
          through the establishment of one-stop shops. 

2.        Streamline the federal government's role in export promotion and
          trade finance.

3.        Assure the delivery of consistent, high-quality, export-related
          information, trade leads, country and sectoral analysis and
          counseling.

4.        Provide guidance and assistance involving export finance strategies,
          programs, and resources.

5.        Assist in matching client needs with the range of available public
          and private sector export service providers.

6.        Support a network of export facilitation services that is competitive
          with those of US trading partners.


RECOMMENDATIONS


With a proper client focus, clear export facilitation priorities, cross-
training among agencies, and careful coordination with other public and
private export service providers, the following recommendations can
test, at minimal cost, the ability of the federal government to improve
its delivery of export services.


1.        Establish one-stop shops to provide local export communities a single
          point of contact for all federal export promotion and finance
          programs.


One-stop shops will provide the US exporting community with a single
point of contact for all federal export promotion and finance programs. 
Designed to deliver services directly or refer clients to appropriate
public and private sector partners, the centers will integrate primarily
representatives of the Department of Commerce, SBA, and/or Eximbank. 
Depending upon site-specific needs and feasibility, efforts will be made
to co-locate one-stop shops convenient to or in facilities where private
and other public sector partners servicing the exporting community exist.

Co-located federal agencies in one-stop shops will focus on assisting
export-ready firms in all areas of export promotion and trade finance. 
A company will be assessed and serviced in accordance with standard
criteria determining its stage of export readiness and not on the basis
of its size.

Among the three co-located federal agencies, the Department of Commerce
will be the primary provider of export promotion counseling and services
to export-ready firms; SBA will promote and provide export capital and
finance counseling; and Eximbank will focus exclusively on trade finance
for exporters.

Nonexport-ready firms seeking assistance from one-stop shops will be
handled by the SBA representative at that location, either through
direct counseling and/or referral of the client to appropriate partners
from the public and private sectors.  SBA's Export Trade Assistance
Partnership (ETAP) program is an example of the type of referral program
offered nonexport-ready firms.  Although not yet available nationwide,
this program identifies groups of nonexport-ready businesses and gives
them the appropriate personalized training and counseling that
culminates in active participation in an international trade show or
mission.

In markets where one-stop shops are established, all export
promotion/finance counseling and programs will be provided by federal
agencies in accordance with these guidelines.  Consultation with one-
stop shops will go far toward eliminating inconsistent or competing
federal counseling and/or programs.

It is further recommended that by January 1994, one-stop shops be
established in Miami, Los Angeles, Chicago, and Baltimore.  One of the
participating agencies -- US&FCS, SBA, or Eximbank --  will take the
lead for each selected pilot site.

In recognition that no single design for one-stop shops is likely to
work nationally, the TPCC has developed three separate and distinct
models to determine the impact of consolidation of federal export-
related resources in single sites.  These models were discussed at each
pilot site with exporters and key local public and private partners. 
The idea is to test several practical approaches and select the best
features for designing and extending one-stop shops to additional sites. 
The models are as follows.

o         Model A:  Co-locate all of the export-related resources of US&FCS,
          SBA, and Eximbank into an existing US&FCS district office.

o         Model B:  Relocate and consolidate all export-related resources of
          US&FCS, SBA, and Eximbank into a world trade center (or comparable
          facility) with other public and private export service providers.

o         Model C:  Co-locate all of the export-related resources of US&FCS,
          SBA, and Eximbank at a mutually-agreed upon site, and over a 3-year
          period shift the approach of the office from one providing direct
          client services (retailing) to one providing strictly indirect
          services (wholesaling) via local trade intermediary organizations,
          such as state offices and private sector providers of export
          promotion services.


Model C will be an attempt to allow one-stop shops to become more fully
integrated with other export service providers.  The federal government
could reduce its involvement in direct client counseling (retailing
services) and channel its export information and services increasingly
through other public and private sector intermediaries (wholesaling).

An intensive training effort covering all appropriate agency employees
who will be staffing the one-stop shops will also be conducted.  These
employees (US&FCS, SBA, and/or Eximbank) will be trained in all aspects
of federal export and multi-lateral development bank promotion and
financing programs prior to their assignment/participation.  Complete
and inclusive training is a key element in the one-stop shop concept. 
As these centers are opened, trained personnel will be available and can
be readily positioned to provide assistance.  Training demands will be a
continuing and ongoing process to upgrade staff knowledge and to take
into account staff turnover, various program enhancements, and other
changes.

As the pilot one-stop shops are being created, the TPCC will review
other cities throughout the United States to determine the potential for
future sites.  Selection will be based primarily upon an analysis of
state-by-state export data and other measures of current and projected
economic activity as well as substantial input from concerned agencies. 
The committee aims to identify 10 new sites by June 1994 and establish
them in CY 1995.  

Finally, the one-stop shops will go through a rather rigorous evaluation
process including self-assessments, regular field meetings and user
surveys.  All sites will be evaluated at least on a quarterly and annual
basis.  These self-assessments will help the TPCC committee evaluate
operational start-up issues, concerns, and problems.  


2.        Assist the export-ready firms in all areas of export promotion and
          trade finance.


In the short-term, the most effective way to increase the overall level
of American exports and thus create new jobs is to focus on companies
that are ready to export.  The pool of export-ready firms must be
constantly replenished.  To be considered export-ready, a firm should: 

o         Produce a product or offer a service that is competitive in the US
          market or is being sold successfully overseas. 

o         Possess the capacity and flexibility to respond to new market
          opportunities.

o         Have the appropriate financial resources to support its export
          objectives.

o         Understand the export process and have a management team that is
          committed to the export objective and communicates that message to
          all its employees.


A nonexport-ready firm is one that lacks any one of these
characteristics.


3.        Expand joint USDA-state department of agriculture outreach efforts
          and focus on new-to-market small and medium-sized exporters; and
          improve the USDA information delivery system by enhancing the quality
          and distribution of statistical trade data to include better state
          and regional trade information.


USDA will focus its efforts through a continuing partnership with state
departments of agriculture that conduct export marketing seminars, and
actively solicit use of USDA services (e.g., trade leads, shows and
missions, statistical trade data, country specific information, market
research information, information on transportation/shipping and trade
barriers, quality inspection, and use of the agricultural attache
network).  USDA field networks are expected to solicit exporter input,
evaluate ongoing programs to determine their effectiveness, and measure
changing customer needs.  A more effective automated system should be
developed to include information on US companies for prospective foreign
buyers, on foreign companies and markets for US exporters, and a list of
available export-related market research.


4.        Establish a pilot program of private sector networks of export
          counselors, to be known as trade assistance centers, that would help
          small businesses overcome obstacles to completing export
          transactions.


Small companies are an important segment of American business, and their
needs cannot always be met through one-stop shops or other public and
private sector export service providers.  The trade assistance centers,
which would be run by the private sector, could provide needed services
for these companies.  The facilities could be staffed by a small group
of professionals who possess a full range of exporting expertise. 
Through a program of matching grants from federal and state sources,
these centers would provide technical export services at costs
acceptable to small enterprises.  Services would include financial
services and loan packaging, product modification for selected markets,
overseas product and company market research, and assistance in
completing transactions.  Local networks (including one-stop shops)
would refer interested clients to the trade assistance centers, which
also would work closely with other local export service providers.  

The trade assistance centers could offset the costs of their operations
through commissions from client export sales.  Although companies would
become independent of the centers over time, this program would
encourage a larger segment of US small businesses to pursue export
sales.



WASHINGTON-BASED SERVICES

                                                                                
                            
Commercial Information

BACKGROUND


The US government gathers an abundance of commercial information,
including market research on industries, subsectors, and products;
economic analyses of more than 100 countries; trade leads; and
buyer/seller contact information.  US exporters, especially small and
medium-sized firms, rely extensively on this information, and, in some
cases, it is the critical element in securing an export sale.

Although several agencies participate in the collection of commercial
information, responsibility for obtaining much of this information
(which only can be obtained overseas) falls to the Departments of
Commerce and Agriculture or State (in those countries where these
agencies do not have a presence).  Requests by USG agencies for
commercial information from the posts are submitted haphazardly and are,
in some instances, duplicative.

A lack of coordination also hinders the efficient and effective
dissemination of commercial information.  Frequently the information
most needed is buried or lost in a mass of printed material.  Customers
often are confused and have difficulty accessing the specific
information they need.  Small and medium-sized firms, in particular,
find it difficult to penetrate the vast USG export information
bureaucracy to obtain the specific information that they require.

The National Trade Data Bank (NTDB), created pursuant to the Omnibus
Trade and Competitiveness Act of 1988, is designed to serve as a
centralized source of international market research and other
information products of the US government.  The variety of perspectives
and broad coverage of trade topics are NTDB's greatest assets; there is
little redundancy and overlap.  All agencies do not contribute to the
NTDB.  The Agriculture Department, for example, has a separate system
for information dissemination, but its trade leads are published along
with those of the Commerce Department in the Journal of Commerce.  NTDB
subscriptions are available for the modest cost of $360 per year.  Few
businesses subscribe, in large part because most do not use CD-ROM
technology or because they find the NTDB CD-ROM difficult to use.The
public remains generally unaware of the existence of the NTDB, and it is
only generally accessible through federal depository libraries or
Commerce district offices.

Commercial information and information on US government export promotion
programs also is disseminated through the Trade Information Center
(TIC).  The TIC, which responds to more than 1,000 calls a week from US
firms, represents a step forward in improving the US business
community's access to USG export promotion information.  However, the
effectiveness of the TIC is being undermined by the proliferation of
similar general information hotlines.  Too frequently, exporters' calls
are bounced around to several different federal offices before the
necessary information is provided.  To date, the TPCC has fallen short
of its objective to create a single referral point for USG export
programs.


GOALS


1.        Expand the distribution of specific and accurate analytic information
          that meets the needs of the client. 


2.        Streamline information collection and dissemination.


3.        Disseminate information in a more timely fashion.


4.        Improve the accessibility of commercial information, especially for
          small and medium-sized firms.


RECOMMENDATIONS


1.        Replace more than one dozen country-specific reports currently
          produced by TPCC agencies with one comprehensive country-specific
          commercial guide for each country.


These guides would incorporate the information needs of all TPCC
agencies and would be made available through the NTDB.  Clients then
would have access to all country information in one place from one
source.  


2.        Initiate a rational system for tasking overseas posts for country
          commercial information.
 

At the beginning of each year, Commerce would request all TPCC agencies
to submit their country information needs to be addressed in the country
commercial guides.  These requests would be culled to eliminate any
duplications and then forwarded to all US embassies, using a standard
format for information reporting.  The country commercial guide would
incorporate in one document information previously reported in economic
trends reports, country marketing plans, overseas business reports, and
trade and investment barriers reports.  This information would be
available through the NTDB or in printed form.  Ad hoc alert reports,
market research reports, or Congressionally mandated reports would not
be included.


3.        Streamline the collection and dissemination of commercial information
          contained in the National Trade Data Bank.


a.        Establish interagency information management guidelines and quality
          standards to ensure that NTDB contents are accurate, current, timely,
          relevant, and comprehensive.


b.        Designate the NTDB as the primary depository of USG trade-related
          information and require all agencies to provide such information to
          the NTDB.  


c.        Coordinate agency-specific information dissemination systems and
          incorporate existing agency-specific databases into the NTDB as it
          evolves into a user-friendly export counseling tool and trade
          information resource.


d.        Increase dramatically marketing dissemination efforts through direct
          subscriptions and the expanding public-private partner network, which
          includes NASDA, chambers of commerce, world trade centers, industry
          associations, SBA, Exim-bank, and more than 800 federal depository
          libraries. 


e.        Enhance user-friendliness to simplify retrievals and promote usage. 
          This action means improvement in coverage, presentation, and software
          capabilities to meet the needs of a wide range of NTDB users,
          including US business, public-private partners, and intermediaries.


4.        Expand current distribution of trade leads through outlets such as
          NTIS, Dialog, Compuserve, and trade associations.  Explore ways to
          link private sector intermediaries and end-users directly with trade
          leads information from overseas posts.


5.        Designate the Trade Information Center (1-800-USA-TRADE), situated in
          Commerce, as the single TPCC-wide information office that will
          coordinate existing specialized nonagricultural export information
          offices.


As the initial point of contact for US firms seeking information on US
government export promotion and finance programs, the center will direct
inquirers to regional, functional, or industry specialists as needed.


a.        Develop a means to electronically link regional, functional, and
          industry hotlines/centers with the TIC.


b.        Share, and combine when possible, TPCC agency databases with the TIC.


c.        Undertake technical enhancement as the technology becomes practical,
          to disseminate marketing information and development of an
          interactive on-line computer link with the private sector.


6.        Raise awareness of the Trade Information Center within the US
          business community.


Undertake a major promotional campaign to publicize the services
available from the TIC, through trade associations, state and local
trade offices, and the business press.


7.        Conduct periodic reviews of regional information centers and the
          business demand for their services, and phase out centers when demand
          subsides.  


Trade Events and Seminars

BACKGROUND 


At least eight federal agencies organize and manage more than 200 trade
events annually.  These events include trade missions 1/; reverse trade
missions 1/; trade shows and fairs /2; and trade seminars and
conferences 1/.  State and local governments and the private sector also
devote significant resources to trade events and seminars.

Some have questioned the value of the federal government's participation
in such activities and expressed skepticism about the effectiveness of
certain types of seminars and trade events.  For example, some
government-sponsored domestic trade seminars have been described as
little more than a pep talk for firms that are not really ready to
export.  Some overseas events are repeated year after year, often
bringing the same group of firms back to the same market and not
attracting new exporters.

The recent interagency TPCC review indicated, however, that the US
government does have a legitimate role in the trade promotion event
arena.  What is needed is a better targeting of US efforts.  Domestic
activities must be sharply focused, i.e., industry and/or market
specific to truly export-ready firms.  Overseas events are appropriately
undertaken by the USG when they are limited to markets and/or industries
that truly need USG support, and when private sector alternatives are
not available.

The review also revealed that there is considerable overlap and
duplication in the US government trade event program.  Several different
USG agencies organize trade events.  However, there is no formalized
coordination mechanism to ensure that the US government does not offer
duplicative events and that resources are being spent on those events
most likely to yield the most exports.  No overarching strategy guides
trade event decisions.  The absence of a central point of coordination
also precludes US firms from being able to contact one source to obtain
information on all the trade events offered by the US government.


GOALS


1.        Streamline the USG-sponsored trade event process and direct event
          resources toward our most promising markets.


2.        Leverage state and local government and private sector resources by
          increasing their participation in event planning and implementation.


RECOMMENDATIONS


1.        Reduce the number of trade events organized by the federal government
          by eliminating duplicative events and encouraging greater
          participation in the planning of events by states and the private
          sector.


2.        Establish a centralized trade event process to ensure that all
          proposed events, including those from states and the private sector,
          are considered at one time for a given year.  Only by viewing them
          together can rational decisions on the number and mix of events be
          made. 


Ensure that TPCC agencies assist in the overall trade event schedule,
but do not operate their own independent trade event programs.

Representatives from those TPCC agencies that conduct events would
participate in the event process.  They would agree on and develop a
unified event program for the year.  This process would eliminate
duplicative events and themes, ensure proper timing of events, and focus
on those industry sectors and overseas markets that offer the best sales
potential.

Once the TPCC approves a unified event program, federal agencies would
encourage state and local entities and private sector providers to
become actively involved in organizing the events.


3.        Place responsibility for managing all federal trade events, approved
          by the TPCC Trade Events Board or working group, in one unit in
          Commerce (or Agriculture, as appropriate).  This maximizes efficiency
          and improves user accessibility by centralizing operations in one
          location.

Commerce (or Agriculture as appropriate) would organize and carry out
the events agreed upon by the TPCC board or trade events working group,
with input as needed by other agencies.  Reverse trade missions
coordinated through the TPCC would be organized and carried out by the
proposing agency.


4.        Use an informational navigation system to guide the planning of
          programs and events.  This system should include basic statistics on
          US exporting companies (number, size, industry sector, and geographic
          location) and data on state and local export performance (export
          value, product composition, and key markets).


5.        As a pilot project, announce the TPCC event program in the Federal
          Register and invite qualified private sector organizers to bid for
          those events they desire to handle.  The qualified organizer (based
          on TPCC-approved criteria) that would provide the necessary space and
          services to participants for the lowest cost would be certified to
          handle the event.  The announcement and selection period would last
          no longer than 60 days after the TPCC approves the event program so
          that preparation for any event can take place in a timely fashion.


6.        Focus limited federal government resources on targeted trade events
          for truly export-ready firms, rather than on general, motivational
          conferences.  As appropriate, support -- but not directly implement
          or lead -- local efforts to conduct trade seminars and conferences.


STATE EXPORT PROMOTION ACTIVITIES

BACKGROUND


The Export Enhancement Act requires that the TPCC shall: 


. . .  review efforts by States . . .  to promote United States exports
and propose means of developing cooperation between State and Federal
efforts, including co-location, cost sharing between Federal and State
export promotion programs and sharing of market research data.


To assess states' role in export promotion and identify ways to improve
federal-state cooperation, a number of states that have a variety of
export promotion programs were consulted.  Information was obtained
primarily through contacts with members of state development agencies. 
The states that were examined were California, Colorado, Florida,
Georgia, Maryland, Minnesota, Mississippi, New York, Oklahoma, and
Texas.  Other sources also were consulted, such as NASDA, which is the
national umbrella organization for state development agencies, and the
Port Authority of New York and New Jersey.  (See box for survey
questions.)

As a result of the dramatic increase in international trade over the
last two decades and the growing need for increased federal assistance,
international trade has been accepted as an integral component of state
economic development programs. Prior to the mid-1980s, however, neither
the states nor the federal government made export promotion one of their
priorities.  State international offices were originally created to
attract foreign investment.  Only since the mid-1980s have states
shifted their focus from foreign investment to make trade promotion a
major economic development priority.  As a result, states have developed
strong and innovative export promotion programs and have maintained
international trade offices as part of their economic development or
commerce departments.

Today, states are major international trade service providers and
significant players in export promotion, collectively spending more than
$100 million each year on trade development, of which $20 million is
spent to support more than 300 employees in 137 foreign offices.  Forty
states now maintain offices/representatives in 18 different countries. 
When US-based employees are included, total state employment in trade
development includes more than 900 people worldwide.

Although each state's international trade activities are fashioned to
meet its distinct needs, states share common objectives.  One is to help
broaden the state's economic base by creating an awareness of, and
demand for, state-produced goods and services, both domestically and
abroad.  Once markets and demand exist, the primary goal of a state's
trade office is to encourage, promote, and assist state-based companies
in starting and/or expanding their export activities. 


Existing State Export Activities

State trade and development officials are keenly aware of the needs of
the companies within their state.  This knowledge enables them to assist
companies through each stage of the export process.  The range of
services provided to companies includes:  counseling services, market
assistance and financing information, evaluation of opportunities,
information on markets, and product placement.  States also provide
technical assistance, including seminars, conferences, and publications
to inform businesses of opportunities overseas.

---------------------
Box 12
Survey Questions


A series of questions were asked to elicit states' perspectives on
export promotion and trade development in a fashion consistent with the
Export Enhancement Act.  Recommendations for improvement in federal
export programs and coordinated federal/state export promotion efforts
also were solicited from the states contacted.  The survey questions
were as follows.


1.        What is your state doing to promote international trade and increase
          exports?


2.        Are improvements needed to existing state programs/services?  If so,
          what new programs/services should be added?
          

3.        Are there specific revisions you would make to existing federal
          trade-related programs?  If so, what programs would you eliminate
          and/or what programs would you add?  Why?


4.        How do you measure program performance?  What are your most
          successful programs?


5.        Could your state use some specific support that it is not currently
          receiving from the federal government?


6.        Does your state's program target specific industry sectors?  Should
          federal and state programs cooperatively target specific industry
          sectors?


7.        Should there be formal coordination between federal and state trade
          promotion efforts?  Should the Department of Commerce implement a
          permanent federal-state partnership?



8.        What could the federal government do to improve coordination with the
          states?  What could the states do to improve coordination with the
          federal government?


9.        What actions could be taken to better clarify the role of state and
          federal government in export promotion and development efforts?

10.              What are the areas of comparative strength and weakness in
federal
                 and state program delivery?


11.              What can the federal government do differently to help your
state
                 in its export promotion and development efforts?

12.              Where should the federal government focus its resources? 
Where
                 should the states focus their resources?

13.              Should the federal government expand the availability of trade
                 finance through state channels?  Do you have a state finance
                 program?  If so, how active is it?  

14.              Should the federal government serve in a wholesaling capacity
while
                 the state and private entities serve in a retail capacity?

15.             If the federal government established one-stop shops for export
                 promotion by combining the Commerce Department, Small Business
                 Administration (SBA), and the Export-Import Bank (Eximbank),   
                 would this aid your state in its export promotion efforts?     
                Would your state participate in such an organization?
------------------------


States ensure that businesses are aware of trade opportunities by
disseminating trade leads generated by in-house research, the Department
of Commerce, other overseas US agencies, professional international
trade database services, and personal contacts.  States also provide
information through newsletters and electronic systems.  Among the
programs that give state companies direct access to potential foreign
customers are state-sponsored trade missions and shows.  States try to
match foreign buyers with in-state companies.  These matching programs
often are used in conjunction with federal government programs or with
state trade promotion efforts, such as trade missions and trade shows. 
States also have the added ability to bring together entrepreneurs,
trade associations, universities, and government officials active in
international trade issues, and encourage them to pool their expertise.

To provide small businesses with an  alternative to federal and private
financing, several states have developed their own export finance
programs.  According to NASDA's 1992 State Export Program Database, 20
states maintain funded and operational export finance programs.  These
states are Arkansas, California, Connecticut, Illinois, Indiana, Kansas,
Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New
Hampshire, New York, Oklahoma, South Carolina, Texas, Virginia,
Washington, and Wisconsin.  Whether or not a state has its own finance
programs, state trade offices usually are equipped to refer exporters to
additional sources of financial assistance. 

Generally, state export finance programs, either directly or with the
assistance of federal agencies, furnish pre-shipment guarantees for
working capital finance for small companies located in the state.  In
addition, a number of states provide post-shipment export finance
support underwritten by the federal government's export credit insurance
program.  Pre-shipment guarantees often persuade banks to extend working
capital financing to small companies that the banks otherwise would not
provide.  A few state export finance programs even provide actual loans
to businesses.

State export finance programs vary in effectiveness and use.  For
example, California has developed an active program.  The California
Export Finance Office reports that in its first 6 years of operation it
provided about 354 guarantees that accounted for roughly $450 million in
exports.  Notably, only 7 of the 354 guarantees ended in default.

The Texas Department of Commerce has a financial assistance program that
is specifically targeted to exporters.  The Texas Exporters Loan Fund
helps small and medium-sized companies acquire capital by guaranteeing
loans made by commercial lenders.  Under this program the Texas
Department of Commerce may guarantee up to 90 percent of a loan made by
an eligible lender.  The maximum term of a loan is 1 year, with a
minimum of $10,000 and a maximum of $350,000 eligible funding.

The City/State Program of Eximbank provides an example of how state and
federal finance programs can successfully work together.  This program
is a partnership designed to encourage financing to state exporters by
allowing the states to structure and package loan requests using
Eximbank resources.  Through this program, the federal government uses
the participating states as vehicles to expand company access to
Eximbank's programs that Eximbank does not have the resources to reach
on its own.
 
States also have built extensive networks of local entities to help
develop a strong overall strategy toward trade development and to
promote international trade.  Most states, for example, have established
networks with local offices of economic development agencies, small
business development centers, world trade centers/associations, chambers
of commerce, port authorities, trade education centers, export/trade
councils, city governments, and local colleges.  These networks ensure
greater participation in export promotion efforts at the grassroots
level, help share the cost of providing services to exporters, and allow
each organization to focus on its respective strengths.

Texas, California, and New York are prime examples of states that work
closely with local development entities.  The Texas Department of
Commerce's Texas Marketplace Program, announced in March 1992, works as
a cooperative agreement with the 56 small business development centers
located throughout the state and offers business counseling and an on-
line electronic bulletin board system to Texas businesses.  

The California World Trade Commission relies on local associations to
disseminate region-specific information, organize how-to-export
seminars, and maintain trade and program information that is easily
accessible to the members of the more than 200 associations.  California
also uses the Automated Trade Library Service (ATLS), which is an on-
line information system that provides trade leads, trade data, and
market intelligence, and which is developed through the University of
California's system around the state.  Any company has local dial-in
access to international trade information electronically through ATLS. 

The involvement of the Port Authority of New York and New Jersey in
export promotion provides another example of how state and local
governments are helping to promote exports.  The Port Authority's
services complement state programs.  More specifically, the Port
Authority runs a public trading company called XPORT, which helps small
and medium-sized companies, over an extended period of time, to compete
in the international marketplace.  XPORT establishes a contractual
relationship with its clients which typically lasts for about 3 years. 
XPORT assists its clients in all aspects of the export process,
including finding overseas distributors and buyers; securing financing,
insurance, and export licenses; and gathering information.  XPORT has
assisted more than 400 companies generating more than $150 million in
export sales.  To keep up with globalization, the Port Authority also
maintains offices in London and Tokyo and provides training programs in
international trade and finance through its World Trade Institute. 


Existing State and Federal Cooperation

State trade development and federal export agencies have a common
objective -- to encourage, promote, and assist US companies in entering
and expanding their presence in foreign markets.  The synergy between
the programs of these state and federal agencies has steadily improved
over the years.  States have maintained cooperative relationships with
federal agencies such as Commerce, Eximbank, SBA, and USAID.  The types
of cooperative endeavors vary from state to state and among the
agencies, but generally involve joint efforts in tracking trade leads,
general information dissemination, joint publications, provisions for
technical assistance, export financing, and joint sponsorship of trade
shows, conferences, and seminars.

State trade development agencies rely heavily on federal agencies for
information that would be impossible for them to develop themselves
given their resources and mandates.  Such information includes market
research and investment and commercial climate reports.  The role of the
federal government as an information provider needs to be enhanced.

The mandate of the US&FCS is to help US businesses expand sales around
the world.  Similarly, states have comparable responsibilities to their
respective state-based companies.  Accordingly, states have indicated
that US&FCS district offices should coordinate activities with state
offices so that scarce resources could be used more effectively and that
duplication of effort could be avoided.  The US&FCS's most recent
strategic review specifically instructed the district offices to make an
agreement with state counterparts specifying a division of labor,
including a delineation of specific actions, responsibilities, and
strategies for cooperation.

Historically, the US&FCS district offices were responsible for many of
the same trade promotion activities as the state trade offices -- one-
on-one counseling, export seminars, conferences and workshops, and the
distribution of trade leads.  Today, however, after the strategic
review, the district offices' activities are becoming narrower in scope,
covering only export-ready exporters, and leaving to the states and
other entities the responsibility of identifying and assisting
prospective new-to-export and other firms and conducting overseas
activities for them.  

Various types of cooperative arrangements exist between state and
federal agencies.  At one end of the spectrum are state trade
development offices with limited interaction with the federal district
offices.  Mississippi and Maryland are examples of states with such
arrangements.  These states rely on independent efforts to accomplish
their goals and use federal resources only when necessary.  At the other
end of the spectrum are the states where offices have co-located with
the federal district offices.  For example, Oklahoma and the federal
district office have established a joint program of international trade
development and support by which the export promotion and development
programs, resources, and staffs of both agencies work together to
accomplish mutual objectives.  Oklahoma's overseas offices also
complement the work of the US&FCS offices in assisting Oklahoma
exporters aboard. 

The remaining state arrangements fall somewhere in the middle of the
spectrum.  These state development agencies have not co-located but have
a working relationship with their federal counterparts.  Florida and New
York, for instance, have very good working relationships with their
respective district offices.  Their joint activities include co-
sponsoring of numerous events and seminars and exchange of trade
materials and information.  Texas, Georgia, and Minnesota have formal
cooperative agreements with their respective district offices.  This
relationship includes effective communication concerning programs, co-
sponsoring of events, and joint marketing of numerous projects. 
California's trade development operation is conducted independently from
US&FCS offices, but unlike Mississippi and Maryland, operations are
coordinated.  Colorado shares the same office suite with the district
office and cooperates in sponsoring seminars, conferences, and
occasional trade shows.

Greater state and federal collaboration is needed urgently in export
promotion efforts.  The lack of coordination has led to confusion for
exporters, duplication of services among federal and state agencies, and
gaps in service.  Ultimately, exporters are not concerned whether the
federal government or their state provides the necessary services.  The
important point is that these services should be made available on a
timely basis to exporters.

States have a working knowledge of the needs of their exporting
companies but lack the resources of the federal government.  However,
states often have more effective network and delivery mechanisms than
Washington.  To aid exporters in a more effective manner, state, local,
and federal entities should capitalize on their strengths and pool their
extensive resources in a more coordinated fashion.  


GOAL


Create a greatly enhanced communication and coordination system between
state and federal agencies.


RECOMMENDATIONS 


The following recommendations to improve federal-state cooperation can
be grouped in three basic categories:

o         General export promotion activities (1-3);

o         Finance issues (4-5); and

o         Trade and market information (6).


1.        Co-locate state offices with federal district offices when
          appropriate, including in the one-stop shop pilot program.


Co-location enables states and federal entities to work together to
accomplish mutual objectives.  The TPCC is recommending the
establishment of one-stop shops by integrating the activities of federal
export service providers.  Most states are receptive to becoming
partners with the federal agencies and being included in the one-stop
shops.  A new federal-state partnership would enable states to expand
their role as clearinghouses of federal assistance and program
information.  However, states do not want any cookie-cutter models
forced upon them.  They want the one-stop shop to simplify the process
and not become an added layer of bureaucracy.  


2.               Create or expand formal lines of communication between state
and
                 federal export promotion entities.


To implement this recommendation, one person should be designated in
each district office as the liaison between state and federal trade
offices.  If a designated liaison has been assigned, the states should
be informed of that person's responsibilities so that state entities can
make use of this line of communication.  This liaison would provide
states with a central location to funnel their concerns, comments, and
suggestions.  In turn, the states would provide information on their
activities to district offices.  The use of this permanent line of
communication should generate greater coordination of export promotion
activities through improved communication lines.  State officials and
their federal counterparts might find it beneficial to meet on a regular
basis (if they do not already) to discuss joint activities or concerns. 
These arrangements could vary from state to state.


3.               Reach cooperative agreements between federal agency field
offices
                 and state trade offices that delineate specific joint
activities,
                 expected accomplishments, strategic directions, and the
                 responsibilities of the partners.


As an example of a similar past agreement, NASDA managed a pilot program
from 1987 to 1989 that called for signed MOUs between 18 state trade
offices and US&FCS district offices.  These MOUs identified specific
cooperative activities, identified the parties' respective roles, and
committed the parties to regular monitoring and evaluation.  More
recently, the US&FCS has instructed its district offices to reach
agreements with their state counterparts specifying a clear division of
labor, including specific activities and responsibilities. 

4.        Expand and improve Eximbank's City/State Program.


This program is an example of how state and federal finance programs can
successfully work together and should be expanded to include more than
the 26 state and local entities that are current participants.  The
program is a partnership designed to encourage financing to state
exporters by allowing state and local export finance and development
agencies to structure and package loan requests using Eximbank's export
financing resources.

State and local entities offer export counseling and financial
assistance to small and medium-sized businesses in their jurisdiction,
assist Eximbank in marketing its programs, and do much of the pre-
application processing to speed up the turn-around time for acquiring
financing.  Eximbank provides expedited turn-around time for loan
applications that have been packaged by states and cities.  If the
program is expanded, more exporters will have easier access to finance
programs.  

5.        Create risk co-financing agreements between federal financing
          agencies (Eximbank and SBA) and qualified state and local finance
          entities.


Implementation of this recommendation would give state and local finance
entities a greater role in export finance by increasing their capacity
to offer loan guarantees directly to more exporters.  The agreements
would allow federal finance agencies to share the risks equally with
their state and local counterparts or to provide more comprehensive
guarantees.  (See Chapter 4 for further discussion of and
recommendations on enhancing the role of qualified state and local
export financing entities.)


6.               Improve the accuracy, acquisition, and dissemination of trade-
                 related information.


States rely on federal trade data and information when dealing with
international trade.  The overwhelming majority of states stress the
need for improvement in the acquisition and dissemination of trade-
related information, such as trade leads, market information, and export
data.  In general, states emphasized the need for trade intelligence to
be more current, more accurate, and more widely available to US
businesses.  

The collection and distribution of trade leads by the Commerce
Department's Trade Opportunities Program (TOP) is an important service
provided to prospective exporters.  TOP is designed to provide US
companies with high-quality leads on private and public sector tenders
in overseas markets.  States have overwhelmingly agreed that TOP needs
to be improved.  The federal government needs to deliver trade leads to
more exporters more 
quickly.

The National Trade Data Bank (NTDB) is a centralized source of
international market research and data.  States stress the need for
improvement in the quality and timeliness of the information in the
NTDB.  For example, the NTDB is limited in its supply of industry and
subsector analyses, which are of great use to exporters.  States also
stress the need for a marketing campaign to promote the NTDB and make it
more accessible to end-users.  States should play a central role in this
marketing effort because of their close relationships with exporters and
their need for international market data.  (See section on Washington-
Based Services for further discussion of and recommendations on the
NTDB.) 

States agree that there is a need to coordinate and strengthen the
access to and distribution of information on foreign businesses,
including trade leads that are collected by federal agencies, and to
integrate these efforts with in-place state systems.  Current
collaboration among state/federal/private agencies is inconsistent, and
information that is gathered is insufficiently shared.  This disarray
obstructs the efficient operation of all export assistance agencies.  If
state and federal offices are co-located and their cooperation is
enhanced, states would be able to share in and have access to the
national data that they need.


OVERSEAS NETWORK

BACKGROUND 


The overseas network is an integral part of the USG export promotion
network.  The role of the US mission abroad is to identify projects and
market opportunities, conduct market research, provide export
counseling, assist in making government and private sector contacts, and
provide high-level advocacy.  The United States now delivers commercial
services to US business at 170 missions abroad.  Although all USG
agencies on the mission's country team contribute to our commercial
efforts, Commerce, Agriculture, and State provide most US export
promotion services.  

Commerce's US&FCS is present in 70 countries, which comprise 94 percent
of the world market for US manufactured exports.  State Department
economic officers are present in all of those countries and are
responsible for the commercial function in the 100 countries without
US&FCS offices that comprise the remaining 6 percent of the world market
for manufactured exports.  USDA's overseas presence includes 79 offices
covering about 120 countries.  These offices include 12 agricultural
trade offices that have co-located in the USDA facilities 15 nonprofit
commodity associations representing US export interests in each. 
Agricultural products account for about 10 percent of total US exports. 
In addition to USG trade promotion activities (see table), 40 states
have a total of 300 trade promotion personnel in 137 offices located in
18 countries.


@@@@@@Table found on page 28@@@@@@@ 

Historically, US missions have placed more emphasis on political and
national security concerns than on commercial interests.  Compared with
its foreign competition, the United States has fewer staff resources
dedicated to export promotion and trade development.  A 1990 comparison
of export promotion staff in major competitor countries reveals that the
United States has 1.56 persons for every $1 billion in exports, compared
with 8.05 persons in the United Kingdom, 5.87 in France, and 2.28 in
Germany (see chart, p. 2). 

Since the end of the Cold War, there has been widespread and growing
recognition of the need to upgrade US economic and commercial priorities
and efforts abroad.  Simply put, our competitiveness and exports
overseas have assumed equal or greater importance in many areas of the
world than the political/military concerns that have traditionally
dominated our thinking.  Recognizing President Clinton's priorities to
increase exponentially our successes in all areas of export . . . and
. . . build export markets abroad requires imaginative and demonstrative
vision to increase US export sales and strengthen our competitive
position. 

Although much has been done to assist US businesses, the USG now must
assign top priority to mission export promotion efforts and find ways to
do more, particularly for small and medium-sized US companies.  Many US
missions have adopted a more aggressive approach to assisting US
business.  The challenge facing us is to bring all US missions to a
common high standard in trade promotion activities, thereby allowing the
United States to compete more successfully with countries that have
adopted more active programs.


GOALS

  
The US government needs to:

o         Create a concise and well-coordinated strategic plan for each foreign
          country.  Missions need to aggressively identify and pursue major
          projects and trade opportunities that would help increase the amount
          of US export sales.  They also should monitor the effectiveness of
          their trade development and export promotion activities.

o         Enhance trade promotion coordination among the agencies.  The
          Departments of State, Commerce, and Agriculture have the primary
          responsibility for providing export promotion programs.  However,
          many other agencies also support US trade interests.  Traditionally,
          agencies have managed export promotion programs with their own
          mandates foremost in mind. Better coordination will lead to enhanced
          results.

o         Within existing resource constraints, allocate resources for overseas
          counseling to key target markets.

o         Increase communication between the foreign and domestic fields and
          Washington.  Mission sections should be encouraged to highlight
          commercial leads in their reporting.  Some agencies at the overseas
          missions now use communication equipment that is incompatible with
          Washington and domestic field offices.  Such technical problems limit
          the distribution of valuable commercial information among agencies
          and to all potential clients.  

o         Provide more coordinated and consistent training programs among USG
          agencies.  Several agencies have developed their own training
          programs, which have created duplication and inconsistencies among
          products and services delivered to US exporters.  Although training
          programs have been expanded in recent years, there is a need to
          provide a more coordinated trade development training program for
          export promotion personnel.

o         Cooperate more with the private sector and state/local government. 
          Overseas missions need to fully develop opportunities to involve US
          private sector partners, industry associations, American chambers of
          commerce (AMCHAMS), state and local government agencies, and in-
          country business groups.  Although there is generally a satisfactory
          level of cooperation between state offices overseas and US missions,
          there is still room for closer coordination of mission and state
          government commercial plans. 

o         Establish performance measures that adequately assess the value of
          promotion activities.  There is now no uniform process of quantified
          goal setting, results measurement, analysis, and sharing of results,
          and such a process should be established.


PRIORITIES


1.        Develop a well-integrated and streamlined Country Team approach to
          export promotion, which ensures that all members on the Country Team
          understand their roles and the mission's goals.

2.        Identify and quantify export levels; develop a strategic commercial
          plan to reach those goals; and work with energy, flexibility, and
          imagination to implement those plans.

3.        Improve information gathering, reporting, and distribution to ensure
          that the information reported to Washington and distributed will help
          US business compete in the world's markets.

4.        Provide better financial information and assistance.

5.        Develop systems, wherever feasible, to measure export promotion
          results and identify specific needs for improvement, adjusting export
          promotion strategies accordingly.

6.        Increase Foreign Service National responsibilities in US&FCS offices
          and develop a regional approach to FSN assignments.

7.        Coordinate more effectively trade development and export promotion
          activities with state offices.

     
8.        Assist US business in winning more major projects and procurement
          opportunities overseas.


9.        Train officers and export promotion personnel more effectively.


RECOMMENDATIONS


The primary foreign commercial challenge can and will be met by US
private enterprise.  However, the overseas network now must gear up to
meet a new challenge.  The United States must raise trade development
and export promotion assistance at all our overseas missions to a common
high standard.  The following recommendations are designed to achieve
this end.

1.        Create a commercial strategic plan for each country with significant
          market potential that is cleared by the Country Team and approved by
          the Ambassador and that links the overall Mission Program Plan and
          the former Country Marketing Plan. 5/ 


Such a document would strengthen overseas export promotion services by
ensuring that: 

o         Missions take a coordinated interagency approach to commercial
          planning.

o         All officers in our overseas missions fully understand the top
          priority attached to export growth and develop a heightened export
          mentality.
 
o         The full Country Team's resources are appropriately marshalled in
          pursuit of our high-priority trade objectives. 

o         Improved trade information collection, advocacy, leveraging, and
          matching of US suppliers and foreign buyers, plus increased demand
          for US products, would become Embassy-wide objectives.  


The plan's primary components would include:

o         An overall assessment of the commercial prospects and major
          commercial issues faced by US business in the host market.  This
          assessment would address attitudes toward US and foreign business,
          trade and investment obstacles and issues, the competitive
          environment, and best trade and investment prospects and
          opportunities.


o         A quantified statement of goals and objectives incorporating basic
          economic assumptions.

o         A marketing strategy describing interagency efforts to achieve goals.

          The strategic plan would identify information needs; schedule a
          timetable of activities; outline anticipated USG advocacy
          requirements; recommend official financial support; allocate
          responsibilities for commercial promotion among all elements of
          overseas missions; and incorporate plans for public relations and
          special events (e.g., trade events).


In addition to the strategic plan, missions also will be asked to
develop performance measurements and assessments of achievements,
analyze results, and incorporate lessons learned and results into the
next year's planning cycle.

As the mission's chief commercial proponent, the Ambassador will be
responsible for overall direction of these efforts.  The senior officers
of the Departments of Commerce and Agriculture will be the country
team's senior advisors in their areas and will coordinate the support of
all agencies for mission trade activities, including development of the
strategic and country marketing plans.  Where Commerce and Agriculture
are not represented, State Department officers, working with all
agencies, will assume these responsibilities.  Mission plans from around
the world not only will be useful to promote trade in individual
countries, but also will be designed to drive regional and global
strategic planning in Washington.  

2.        Enhance the role of the Country Team in commercial activities. 


The Country Team concept -- in which the heads of all agencies at post
coordinate their efforts to achieve a defined goal -- is a proven
instrument for ensuring maximum mission-wide participation and optimal
results across the board.  All missions should use the Country Team more
effectively for commercial purposes.  Missions may wish to create a
mission core commercial group, chaired by the Senior Commercial Officer
and including other trade-related agencies at post, under the overall
direction of the Ambassador, to plan and prepare the annual strategic
planning document. 

In accord with increased commercial priorities, the country team
mechanism should be employed worldwide to serve these interests and to
ensure that:

o         Goals and plans are understood and contributed to by all.

o         All mission agencies and sections participate and contribute
          appropriately to the commercial effort.

o         Commercial information is widely shared and built upon.

o         Synergistic benefits are captured.


All USG agencies that are not members of the Country Team (i.e.,
agencies based out of the country) should coordinate any new trade
development and export promotion initiative with the mission's
Ambassador and Country Team.     

3.        Promote the United States as a country that produces quality
          products.


USIA should promote US exports abroad through its Worldnet interactives,
speakers, wireless file articles, VOA broadcasts, teleconferences, and
magazine articles, by explaining US trade policy, the high productivity
of the US workplace and the quality of products it produces, technology
and various aspects of the US free enterprise system, and US standards
and procedures, and by facilitating export promotion efforts.

4.        Improve the collection and dissemination of market research and
          country-specific information.  


Missions should highlight commercial information in political, economic,
and military reports, and emphasize commercial and agricultural
reporting.  On a more technical level, missions should establish
interagency electronic mail connections at missions and in Washington in
an effort to maximize the utilization of resources.  

5.        Enhance the role and responsibilities of Foreign Service Nationals in
          countries where there are no US&FCS officers.

a.        Adopt a US&FCS regional strategy to address scarcity of resources by
          creating regional US&FCS offices and assigning US&FCS Foreign Service
          nationals to missions served by US&FCS regional posts.

b.        Assess job requirements of FSNs and develop training courses that
          reflect the duties of FSNs at missions without US&FCS officers.

c.        Assess FSN classification procedures to assure that regional and
          management responsibilities are correctly reflected in position
          classification and wage scales.

6.        Develop a comprehensive and consistent training program for export
          promotion personnel at each stage of personnel development.


The Foreign Service Institute, which will become the National Foreign
Affairs Training Center (NFATC), has initiated diplomacy for global
competitiveness as a central organizing theme that will run like a
thread through all its courses.  NFATC is encouraged to expand the
number of TPCC agencies in the design and development of the curriculum;
and to expand training in export promotion, trade development, and trade
finance.  The flow of information on the availability of training
programs that support trade promotion will be improved.  The private
sector will be involved by forming public/private partnerships to
promote US trade promotion training.  This approach will enable NFATC to
train USG personnel in making the operational connection between what is
done overseas and the needs of the US business community.  All TPCC
agencies are encouraged to: 

a.        Promote interagency exchange assignments for trade promotion
          personnel, including domestic assignments to US&FCS district offices,
          as well as executive exchange assignments to the private sector.

b.        Provide advanced management training for federal senior personnel at
          institutions and universities (e.g. Federal Executive Institute,
          Public Policy Education Program for Government Executives at the
          Brookings Institution, USDA Graduate School).

c.        Enroll trade promotion personnel in Commerce's regional business
          counseling, export promotion assistance, and overseas market research
          training programs.

d.        Participate in regional training programs in international trade
          finance for all US trade promotion personnel overseas, with the
          coordination of Commerce and Eximbank.

e.        Expand training opportunities for FSNs who support trade promotion
          operations, including increasing the number of FSNs enrolled in the
          Commerce Department's Introductory Commercial Correspondence Course. 

          

7.        Expand contacts and develop training programs with private sector
          organizations and associations to improve the exchange of information
          between federal trade promotion personnel and US exporters overseas. 
          Initiatives should include efforts to:

a.        Encourage private sector organizations, especially high-tech
          industries, to provide and sponsor training programs for trade
          promotion personnel, including Foreign Service nationals.

b.        Develop greater contact with executive-level personnel in private
          sector groups and associations along the model of the Business
          Council of International Understanding (BCIU).

c.        Explore ways to increase cooperation among NFATC, San Diego, trade
          associations, and state/local governments in providing training in
          trade finance and development and export promotion.

8.        Develop and implement a regular mechanism for evaluating performance
measures.


The Strategic Commercial Plan should provide a basis for assessing the
contribution made by the post during the year.  It should describe
specific accomplishments and the means established by the post to
document and track accomplishments.  As a corollary to the strategic
plan, there should be a year-end quantified evaluation by the domestic
field, the overseas mission, and Washington to incorporate the
performance results and a variance analysis into the next year's
planning cycle.  

9.        Upgrade the mission's awareness and knowledge of USG agencies and
          private sector financial needs and requirements, and improve the
          mission's ability to report and make useful recommendations to
          Washington.


Mission members should be more knowledgeable about the trade financing
programs that are available and willing to coordinate and focus their
recommendations to Washington agencies and US exporters regarding the
best finance programs available for given export opportunities.  The
following recommendations are designed to increase US businesses' access
to USG financial resources:

a.        Improve Washington agencies' guidance to missions regarding trade and
          project financing available to US businesses.

b.        Expand mission reporting on alternate sources of trade financing
          (i.e., international banks, multilateral development banks, and
          third-country financing sources). 

c.        Develop regional training programs in international trade finance,
          which would be available to all trade promotion personnel assigned
          overseas.  Commerce and Eximbank should coordinate this effort.      

10.              States for consultations with the business community, and
                 brief/update TPCC representatives on mission activities.  


The visits would help bridge the communications gap between private
sector companies and USG agencies and convince US firms to expand
overseas.  Both business and governmental organizational support and
funding should be sought for these visits.  The purpose of these visits
can range from creating an awareness of general opportunities to
discussing specific strategies.    


11.              Coordinate mission trade promotion activities with state
                 development offices located overseas.


Missions should be encouraged to use the resources available from these
state development offices and to expand their contacts with such groups. 
USG agencies should encourage state development offices to coordinate
their activities with the overseas missions by initiating pilot
programs, such as the proposed NASDA program to place state
representatives in selected overseas locations.




ADVOCACY

BACKGROUND


In this context, advocacy is the support provided by governments to
their firms to create and take advantage of overseas market
opportunities.  Historically, the use of advocacy as an export promotion
tool by the US government has largely been on an ad hoc, if asked basis. 
But a review of a small sample of 26 cases dating back to 1987 indicates
that the potential for increasing exports through a more intensive and
organized advocacy system could be substantial.  The review showed that
where the US government supported US bidders encountering aggressive
foreign government lobbying or questionable competitive practices in
bidding for international contracts, US firms were awarded contracts in
70 percent of the cases (just for these 26 instances).  This resulted in
about $5 billion dollars worth of business.  Using the rule of thumb
that every $1 billion of exports creates almost 20,000 jobs, these
actions led to 100,000 new jobs. 

The governments of our strongest international competitors are
aggressive advocates for their firms' efforts to win foreign project or
procurement contracts.  These governments rank such export support among
their highest foreign policy objectives and use all possible means of
leverage, including military sales, political support, and financial
pressure, to achieve their national economic goals.  

Common advocacy techniques of competitor nations include visits by high-
level government officials, coupled with attractive financial packages
including concessional loans and tied-aid grant elements.  These
countries' advocacy efforts have focused on key high-tech industries
(e.g., telecommunications, environmental protection) in that group of
high-growth, newly industrialized countries that offer the greatest
long-term commercial opportunities, e.g., Association of Southeast Asian
Nations (ASEAN) countries and China.  Below is a sample of some of the
advocacy practices of various competitor nations:  


Japan:  The government has stated that it no longer engages in the
practice of advocacy.  Through administrative guidance, the Japanese
government led a strong exporting drive for decades that advanced
Japanese entry into foreign markets, while protecting the domestic
market from foreign competition.  The government since has eliminated
overt support programs for Japanese exporters.  Implicit support of
Japanese exporting firms continues, however.

In one instance, Tokyo asked the government of Indonesia to award a
telecommunications digital switching project to NEC instead of AT&T,
citing Japanese aid to Indonesia.  The panel charged with evaluating the
bids recommended AT&T.  Top US officials, including President Bush,
intervened to support the AT&T bid.  Indonesia decided to split the
contract between NEC and AT&T.


Germany:  Advocacy by high-ranking German government officials on behalf
of German companies is used occasionally in bilateral relations on a
political level.  In most cases, advocacy is not company-specific, but
of a more general nature stressing the high technology and superior
standards of German products.

However, strong ties exist between the German avionics and aerospace
industries and the Economics Ministry.  Germany is often a participant
in European consortia of manufacturers, which are favored in EC
contracts.       


United Kingdom:  All British officials (including the Royal Family and
prime minister) who either travel abroad or meet with overseas visitors,
actively pursue the role of trade advocates as a normal part of their
official duties.  High-level state visits often coincide with major
trade promotion efforts in targeted markets.  For example, a state visit
by Prince Charles and the Princess of Wales to Seoul in November 1992
coincided with the biggest concentration of British business events ever
held in South Korea.

Moreover, direct intervention by the prime minister on behalf of British
companies involved in specific bids is not un-usual.  For example, both
the Prime Minister and Foreign Secretary successfully lobbied the Saudi
government to award large portions of the Al Yamama defense contracts to
UK firms.  A former Prime Minister intervened with the Turkish
government in support of a British firm's bid for a bridge construction
contract.    

France:  France is an aggressive practitioner of advocacy on behalf of
its firms in obtaining foreign contracts.  The French President and
cabinet officials successfully urged the Turkish government to award the
$300 million TURKSAT project to the French company Aerospatiale.  

In another example, the French Industry and Foreign Trade Minister
strongly urged the government of Morocco to purchase Airbus A320
aircraft rather than similar Boeing or McDonnell Douglas aircraft.  The
US government made a representation objecting to the French advocacy
practice in this case.  In January 1993, Royal Air Maroc signed a
contract with Boeing for twelve 737s valued at $525 million.


Canada:  The federal government, through the Department of External
Affairs and International Trade Canada (EAITC), uses advocacy in its
export promotion efforts.  Trade commissioners located abroad intervene
in trade disputes and assist Canadian companies in gaining equal access
to foreign contracts.  The department also has intervened in export
promotion activities abroad where it feels the political situation is
detrimental to trade promotion.  The federal government restricts its
use of advocacy for export promotion to Canadian corporations that have
a minimum of 50 percent Canadian-resident ownership, or that provide
substantial employment in Canada.


Italy:  The Italian government frequently employs government-to-
government presentations on behalf of its companies.  Typically, the
government advocates on behalf of firms attempting large projects (e.g.,
construction).  The government also acts on behalf of particular
industries.  For example, in an effort to curb Chinese silk exports, the
Italian government recently urged China to favor the Italian Como silk
industry.   



United States:  The US government, by contrast, has used advocacy
largely as a reactive export promotion tool.  This limited advocacy has
had some interagency coordination, but it has been inconsistent. 
Decisions regarding when and how to provide advocacy are not based on
any overarching USG commercial strategy.  Currently, because there
exists no information network or method for prioritizing action across
relevant agencies, numerous opportunities are lost where USG advocacy
could be decisive in enhancing US firms' competitiveness.  Furthermore,
advocacy by high-level US leaders has been exceedingly rare compared
with foreign competitors.  While ambassadorial-level advocacy is
certainly useful and important, the United States often is outgunned by
Cabinet-level officials or even heads of state of other nations.  

USG advocacy activities generally are undertaken at the request of a US
company, often after it has encountered problems with the purchasing
country, or even after the company has lost the sale or the bids have
closed.  

Advocacy must be a two-way street between the US Government and the
business community.  If firms seek USG assistance early, advocacy
efforts will be most successful.
 
Thirty years ago, US business dominated world markets and did not need
government support to succeed.  With the rise of powerful Asian and
European firms that have the aggressive backing of their governments,
the ability of US firms to access and compete successfully, particularly
in key sectors of critical growth markets, has been challenged.

Priority major projects and procurement contracts constitute immense
export market opportunities, not only for large US firms but for many
that are small and medium-sized.  In fact, a large number and variety of
smaller American companies, acting as suppliers or participants in
consortia, often benefit the most from major overseas infrastructure and
other contracts.  However, the limitations of the current advocacy
process adversely affect the ability of US companies to compete in the
face of aggressive foreign government advocacy.  This has long- and
short-term negative effects on the US economy.  


GOAL


The goal of improved advocacy is, consistent with US interests and
objectives, to provide appropriate US government support to large as
well as small and medium-sized US firms as they face foreign competitors
who are aggressively backed by their governments.  The Administration
will establish a strategically focused interagency TPCC Advocacy
Coordinating Network, led by the Secretary of Commerce.  The Network
will cooperate closely with US business and labor to take a forward
planning approach, seeking to use fully the power and influence of the
US government in supporting American companies competing for overseas
contracts, particularly in winning priority project and procurement
contracts that support US jobs.  

This network, through strategic planning and decision-making based on an
agreed-upon set of criteria, will prioritize USG advocacy activities in
order to achieve a maximum increase in exports to critical markets in
key sectors and maximize job creation for American workers.  It will
ensure that all available USG means for enhancing advocacy effectiveness
are employed in a consistent and coordinated fashion, in close
cooperation with the private sector.  This will strengthen firms' market
presence in key sectors of critical growth markets.  


RECOMMENDATION


Establish the TPCC Advocacy Coordinating Network, chaired by the
Secretary of Commerce or his delegate, to develop an effective system of
aggressive advocacy in close coordination with the private sector and
within the context of overall US foreign policy.


Network agencies will be Commerce, NEC, Energy, State, OPIC,
Transportation, Eximbank, USTR, TDA, USAID, Treasury, Labor, and
Defense.  The Department of Commerce will act as the central contact
point, through an office in the International Trade Administration
designated by the Secretary.  A small staff will be dedicated to
advocacy-related activities. 
 
Each Network agency will designate one primary TPCC contact point for
advocacy-related activities.  All relevant parts of each agency should
work through their agency contact when working with others in the
Network, particularly for time-sensitive issues.  It is important that
agency contacts be able to access the highest levels of their agencies
when necessary for quick response to advocacy requests.   

The mandate of the Network will include the following:

a.        Strategic Planning:  This will involve developing a set of agreed-
          upon criteria to guide decision-making and set priorities, based on
          the information below.  Projects will then be evaluated by the
          appropriate agencies for potential feasibility funding, financing, or
          other services or action to assist US companies.  

Setting criteria to guide prioritization and decision-making is a
critical step.  Criteria to be used for advocacy-related decisions must
logically be connected to larger TPCC objectives and resource allocation
criteria.  The operations of agencies involved, in particular those of
financing agencies (Eximbank, TDA, OPIC), will be affected by the
priorities established through this process.  For example, staff and
financial resources as well as research capabilities must be oriented
toward higher priority projects.

b.        Information Gathering:  New and existing information will be gathered
          on projects and possible project opportunities that concern US
          companies in order to determine who the competition is and how they
          are approaching the project, including analyzing unfair trade
          practices and identifying which projects are likely to require US
          advocacy.  

Information-gathering and analysis required by the advocacy Network will
draw largely on agencies' existing sources and means -- particularly the
overseas offices of Commerce, State, and USAID.  The strategic
commercial plan (see Overseas Network section) to be developed by
embassies overseas will be a key source of information to be used in the
strategic planning process for advocacy.  Project-specific information
will be gathered into an advocacy database at Commerce.

c.        Needs Assessments:  For promising sectors (determined through the
          strategic planning process) relevant agencies should also consider
          providing technical assistance to help countries with project
          preparation and pre-feasibility work.  This could be done through
          feasibility studies or reverse trade missions where key host country
          officials and technicians visit the US to explore US technology and
          capabilities.

d.        Financing:  Following from the strategic planning process, and based
          on the selection criteria and data analysis, targeted projects
          worldwide should be reviewed by relevant agencies to ensure the best
          way to apply available US financing.  The efforts of all US financing
          institutions should take into account the financing available through
          the multilateral development banks.   

e.        High-level Advocacy Contacts:  This network, through the Commerce
          contact point, will act as a strike force that will react quickly to
          calls for personal cabinet and higher level advocacy activity.

f.        Performance Measures:  The TPCC will report to the Secretary of
          Commerce annually on the effectiveness of USG advocacy efforts, using
          agreed upon quantitative performance measures that track actual
          results in terms of increased exports and contracts won by US
          suppliers. 



ENVIRONMENTAL TECHNOLOGIES EXPORTS


BACKGROUND

Process


This section is the product of the TPCC Environmental Trade Working
Group, mandated by Section 2313 of the Export Enhancement Act of 1992. 
The President, in his Earth Day speech, also ordered that an interagency
group, including DOC, DOE, and EPA, assess current environmental
technologies and develop a strategic plan to enhance competitiveness of
the industry; this report is expected in mid-October.  The two groups
have worked closely together, and the mid-October report will provide
detail on policy recommendations and implementation issues consistent
with the framework established by the TPCC Environmental Trade Working
Group.

Critical Role of Technology Development in Trade Competitiveness


Sustained technology development is a key to successful export promotion
and international trade competitiveness.  As President Clinton said, by
working in partnership with industry and international organizations,
and by encouraging both continued technology development and trade
competitiveness, America can maintain our lead in the world economy by
taking the lead to preserve the world environment.

Technological progress also will generate private sector growth and
high-skill, high-wage jobs into the next century.  It is a cornerstone
of sustained job creation.  Spurring technology development is a core
policy goal for this Administration, and a focused and successful
technology policy is critical to effective trade policy.

The USG has significant technology and R&D resources.  The Departments
of Defense, Energy, and Commerce, NASA, and the EPA are notable centers
of an extremely broad array of activities aimed at advanced technology
development.  In the past, these resources were largely uncoordinated,
or only partly focused on specific -- principally national security-
related -- issues.  This Administration believes that better
coordinating these resources can enhance their role in strengthening the
technological base of US industry and make a large contribution to the
international competitiveness of American manufacturing and service
industries now and in the future.

This new technology policy has several strands.  First, it focuses on
the development of precompetitive technologies applicable to civilian
industries.  Second, it stresses easing the transfer of technology and
research to private industry.  Partnership and collaboration between the
private and public sectors -- in the form of partnerships, consortia,
grants, or ongoing dialogue -- are all important components of this
technology transfer.  Another key strand is regulatory revision to both
streamline and ease the transfer of technology and to remove barriers to
private sector trade development.

The new technology policy represents a major investment in the
development and dissemination of new civilian technologies that will pay
dividends well into the 21st century.  Through technology, US industry
can improve its international competitiveness and continue to assert
global industrial leadership.

Environmental Technologies Industry


The market for environmental goods, services, and technologies is one of
the most attractive arenas of USG focus to enhance our international
competitiveness and export performance.  This industry is a technology-
driven one which will create high-wage jobs in the years ahead.  It is a
prime example of the positive connection among trade, technology,
environment, and the business community. 

Any industry discussion is hampered by both definitional and data
issues.  The range of environmental technologies is broad and often
cross-functional; it includes equipment and services.  Key technologies
include pollution control, pollution avoidance (i.e., clean
technologies), monitoring and assessment, infrastructure projects
devoted to environmental objectives, and clean up and remediation. 
Estimates of the current and potential world market for the
environmental services industry vary from $350 billion to $380 billion
in 1992, and it is estimated that worldwide spending on environmental
protection could be as high as $590 billion in the year 2000 (high
compound annual real growth of 6.7 percent).

The US environmental goods and services industry is a significant net
exporter, principally of services.  Estimates of the US industry trade
surplus in 1991 range from $1.1 billion (goods only) to $4 billion
(goods and services).  US environmental technology trade is rapidly
growing; between 1989 and 1991 exports grew 75 percent; imports, 45
percent.

Demand and market characteristics vary greatly from country to country. 
A country's demand for environmental technologies is a function, in
part, of its level of development.  Developed countries have mature
regulatory and enforcement regimes, and currently comprise the bulk of
the market; the United States leads with 35 percent of the global
environmental products market, followed by Western Europe at 25 percent,
and Japan at 5 percent.  Middle-income countries generally have some
regulatory mechanisms in place, with an emerging environmental industry
and technical capability.  Less developed countries lack regulatory
regimes, in-country financial capabilities, or industry/technical
capabilities.

The market for environmentally useful technology is different because,
unlike other markets where demand is driven by consumer preferences,
environmental technologies are primarily driven by the government. 
Applicable regulations drive the required performance of environmental
technologies along with selected local or regional use-based
considerations.

The highest future growth is expected in developing and middle-income
markets.  Pacific Rim countries are expected to double expenditures on
environmental technologies by 2000.  Similar growth is expected in
Mexico and Latin America.  The majority of these countries' short-term
needs are for low-technology projects in solid waste management, water
delivery and treatment, and air pollution control.  Middle-income
markets like Mexico have greater demand for more sophisticated products
and services (e.g., monitoring and consulting).

The US environmental technologies industry is highly differentiated by
size and technology with little reliable data on its structure. 
Regional considerations are also important; California has the largest
concentration of the industry ($19.3 billion sales in 1991), followed by
Texas ($8.6 billion), and New York ($8.1 billion).

The US industry faces significant international competition, especially
from Germany and Japan but also from newly industrializing countries. 
While the US leads in some segments, clear-cut American leadership in
this worldwide industry is by no means obvious.  The OECD, for example,
asserts that Germany leads in air pollution control technology, Japan in
water treatment, and the United States in remediation technology. 


Many other countries, including major competitors, have government-run
or funded programs to enhance their exports of environmental goods,
services, and technologies.  These programs range from direct subsidies
for trade fair participation (Germany) to substantial funds for long-
term environmental protection which may indirectly assist the national
industry (Japan).  Some sets of country programs appear to be
considerably more aggressive and extensive than existing USG
involvement.

USG programs encompass a range of market development and market
assessment efforts, as well as export promotion activities to directly
support environmental technology exports.  Also, a number of other
regulatory and technology development programs probably indirectly
relate to export competitiveness.  Major programs by department are as
follows.


Commerce Department:  Export promotion activities consist of export
counseling, market information and trade leads, financing, and technical
assistance.  All of these aim to provide potential exporters with
different types of information and support.  Most programs are part of
more general export promotion activities not restricted to environmental
technologies.

In addition, NIST and NOAA have substantial technological expertise, and
NIST in particular has a major role in environmental technology
development.  NIST has expertise in pollution avoidance technologies
integrated into industrial processes, and the Manufacturing Technology
Center to disseminate technology.  In atmospheric and oceanic sciences
NOAA is heavily involved in environmental technology development.


Environmental Protection Agency:  EPA addresses issues of technology
cooperation with other countries, environmental technology development,
training, and technology demonstration.  Many of these programs
indirectly help US businesses with export promotion.  Such programs
include EPA-conducted training workshops and conferences, technology
testing, data bases, clearinghouses and information centers, and
bilateral and multilateral cooperative agreements between EPA and other
organizations.

Other EPA programs primarily develop demand in potential export markets
by identifying, anticipating, creating, and responding to emerging
overseas needs for existing and future products.  EPA consults with and
advises other countries in establishing their environmental regulatory
and testing standards and protocols.  The form and content of these
standards often substantially affect the international competitiveness
of US environmental technology goods and services.

Another aspect of EPA activity with implications for competitiveness is
the setting of US regulatory standards.  The form and content of US
regulatory standards may have a substantial effect upon the rate and
shape of environmental technology development and the structure of the
US environmental industry, and thus indirectly influence US export
competitiveness.  To date, however, the impact of domestic regulation on
international competitiveness has not been fully addressed.


Export-Import Bank and OPIC:  Eximbank offers loans, guarantees, and
insurance to support the sale of US goods and services overseas.  OPIC
provides loans, guarantees, and insurance to support US foreign direct
investment in developing markets.  Both agencies place increased
emphasis on environmental activities.


Energy Department:  DOE focuses on energy exports, and leads the
Committee on Renewable Energy Commerce and Trade (CORECT), a public-
private working group to promote US energy products and services
internationally.  DOE also holds trade missions and conferences to
promote the energy sector. 


USAID and Multilateral Development Banks:  They play a significant role
in overall market development in developing countries.  In addition,
USAID has programs involving technical assistance, training, and policy
advice to encourage developing countries to open their economies to
international trade and investment, thereby creating new opportunities
for US business.  USAID is the lead in the multi-agency US-ASIA
Environmental Partnership, a program designed to protect Asia's
environment and promote economic development.

The World Bank and the regional multilateral development banks (MDBs)
are now a major source of financing for environmental projects.  In
1992, these banks loaned around $3 billion for environmentally related
projects.  In addition, multilateral agencies and funds are increasingly
active in environmental technologies.  The Global Environment Fund
(GEF), jointly administered by the UN and the World Bank, is designed to
assist less- developed countries deal with the added costs of addressing
global environmental issues.  Through a variety of techniques (e.g.,
financing of prefeasibility studies by a specific country) some
countries attempt to gain competitive advantage for their environmental
technologies industries in bidding for the funded projects.

These are the principal department and agency involvements.  Other
departments with some involvement include TDA, SBA, USTR, and Labor. 
The US Trade Representative, for instance, is concerned with market
access and international standards and regulatory regimes, both of which
have a substantial potential effect on US environmental technology
exports.  The Department of Labor, through the Occupational Safety and
Health Administration and the International Labor Organization, is
involved in establishing international standards to protect workers from
environmental dangers.  


ISSUES


While a range of programs support environmental technology exports,
generally the federal government does not coordinate the development and
diffusion of technology, assistance to the private sector during the
commercialization stage of business development, or export assistance
programs.  Specific problems include:

o         There exist conflicting or uncoordinated policies toward developing
          and middle-income markets, which will have the greatest growth over
          the next decade and represent significant future export
          opportunities. The needs of such markets are different from those of
          established markets because they require long-term market development
          that may not pay back in the short run.  Key issues include the
          appropriate role of development assistance in favoring US commercial
          interests (e.g., tied aid), investment in training, financing of
          demonstration projects, and establishing regulatory and testing
          protocols favorable to US industry. 

o         Much of the industry consists of small and medium-sized firms that
          either are unaware that financing support is available or, because of
          the perceived higher risks associated with projects in this industry,
          find that private financing is less available.  Although both
          agencies have instituted aggressive efforts to widely inform and
          educate the environmental technology industry and banking community
          about USG financing support, each has limited resources with which to
          reach this broad constituency.  (See Export Financing in Chapter 4.)

o         Export promotion activities are poorly coordinated.  This issue
          appears particularly acute for middle-income countries, where
          environmental technology markets already exist and are growing
          rapidly.  DOC, EPA, and DOE activities support exports, including
          trade missions, data bases, and demonstration projects. 

o         No government agencies have targeted or identified the most
          attractive export promotion opportunities. 

o         The extensive range of technology development support programs --
          particularly at DOE and EPA -- exists outside the trade and export
          purview.  EPA and DOE cooperate with industry and universities to
          develop new and innovative environmental technologies with little
          consideration of export potential.  

o         The implications of US regulatory standards for US export performance
          are poorly understood.  Some observers assert that specific point
          source standards have limited the development of US-based
          environmental technology.

o         US participation in international standards setting and multinational
          environmental treaties is poorly coordinated with trade and
          competitiveness considerations.  US export competitiveness can be
          enhanced through international regulatory or testing protocols that
          follow US form or that match technologies where US industry dominates
          (e.g., certain types of continuous monitoring).  (See Product
          Standards and Certification in Chapter 5.)


o         No data exists for tracking and understanding the industry.  Domestic
          data is lacking because of the absence of any single Standard
          Industrial Code (reflecting in part the dual-use nature of much of
          the industry); trade data is inadequate because of similar
          shortcomings in the international trade classification system.  It is
          unclear to what extent this lack of data is perceived as a problem by
          the industry.

o         There is no single coherent source of information available to the
          public about the range of government activities in environmental
          technologies or industry data collected by the government.

o         At virtually all USG agencies there is a lack of knowledge of
          existing programs relating to environmental technologies.
  
o         Small firms that are new to exporting comprise much of the industry. 
          This sector must be addressed in order to enhance export performance.

          Although this challenge is not sector specific, the environmental
          technologies sector may be a good case study for developing effective
          policy.


GOALS 


The environmental technology industry represents a unique opportunity. 
The US market is the world's largest, and American industry is a leading
force in global markets and in many technologies.  The US government
must develop a coordinated and focused set of programs and policies
targeted to achieve:

1.        Short-term growth of US environmental exports through targeted
          advocacy programs.

2.        Longer-term growth of US environmental exports through market
          development that targets exports to developing country and middle-
          income markets.

3.        Continued development of new environmental technologies and the
          application of existing technologies to new markets, for use in US
          and other markets.


4.        An integrated and targeted approach to export promotion for newly
          industrializing and advanced markets in which all agencies understand
          their roles and responsibilities.  Such an approach needs to
          prioritize its objectives and establish measurable performance
          standards.  Financing availability must be provided.


5.        Identification of the types and forms of data needed for effective
          USG policy formulation and measurement and for dissemination to US
          industry to assist in export activities.  Using both USG and private
          sources, help close this information gap.


6.        Integration of US participation in international standards setting
          and environmental treaties to include consideration of the effect on
          domestic export competitiveness.


In addition, these goals must be achieved while:

o         Establishing clearly defined program accountability and performance
          standards. 

o         Continuously upgrading USG program and personnel capabilities to
          support the environmental technologies industries.

o         Advancing the environmental goals established in Agenda 21 by the UN
          Conference on Environment and Development and in other international
          environmental agreements.

7.        Assistance to US firms in incorporating MDB and Global Environment
          Facility financing into the export financing strategies of US
          environmental firms.


NEXT STEPS



Consistent with the framework of problem identification and goals
established here, a set of detailed policy and implementation
recommendations will be outlined in the mid-October report of the
interagency group established by the President's Earth Day speech.  This
group will continue to work closely with the TPCC Environmental Trade
Working Group.

________________________

1/ Business groups, usually organized from within one industry, that
visit one or more countries to meet potential business partners
(agencies, distributors, etc.) to negotiate business arrangements or
explore business opportunities.

2/ Invitations to groups of foreign private sector and government
officials to visit the United States to receive technical assistance and
view US technologies and systems, for the purpose of promoting the sale
of American products and services to those officials/countries.

3/  Large exhibitions in foreign countries where companies display their
products and potential business partners.

4/ These are usually held domestically and typically address the how to
of exporting. 

5/ The Mission Program Plan is the Department of State's annual plan for
each overseas mission that describes goals and objectives, and the
strategies for attaining them.  The Country Marketing Plan is the
Department of Commerce document that is used on a country-by-country
basis providing background and best prospects information for expanding
US exports to the host country.