Carolina Journal News Reports
RALEIGH — North Carolina economic development officials continue to tout overseas trade as an avenue to lift the state from its economic doldrums. But some business owners and elected officials believe federal policy has become an impediment to the growth of exports in manufacturing, which had helped modernize the Tar Heel State’s economy.
For starters, a recent Heritage Foundation report criticized North Carolina’s congressional delegation for failing to support free trade agreements that would help companies export their products. And business owners say federal regulations often hinder the ability of small manufacturers who make custom products for export from finding overseas buyers.
Heritage Foundation senior trade policy analyst Bryan Riley noted that on recent free trade agreements with Panama, Colombia and South Korea, at best the state’s Congressional delegation split its vote, with only two members — Democratic Rep. David Price of the 4th District and Republican Sen. Richard Burr — voting in favor of the Korean trade agreement.
Riley calls North Carolina’s delegation among the most protectionist in the country.
“The anti-trade posture of North Carolina’s legislators in recent years stands in contrast to the state’s free trade roots,” Riley concluded in his report. “North Carolina’s congressional representatives can best represent the interests of all of their constituents by rejecting protectionist policies and returning to the state’s free trade roots.”
While North Carolina elected officials backed protectionism as a reaction to the decline in our core industries — textiles and furniture — Riley notes that the state exports many other products. Commercial engagement with other countries would boost those exports and the jobs they support.
North Carolina is second-largest pork-producing state, for example, and demand will continue as countries such as China and India continue to develop.
State Agriculture Commissioner Steve Troxler has said the Chinese market “is among the fastest-growing in the world, and our farmers produce many commodities that the Chinese are looking to buy.”
In fact, Riley notes that exports are responsible for more jobs than ever in North Carolina, with exports in 2009 totaling $21 billion. During the past decade, the state’s level of exports has increased by nearly 50 percent.
But voting for free trade agreements is only one way to help North Carolina businesses increase exports.
The U.S. House of Representatives Small Business Committee recently held a hearing on strategy for small business exports, focusing on the many bureaucratic obstacles companies face.
Among the business owners testifying was Thomas Crafton, president of Winston-Salem-based Thermcraft Inc., a manufacturer of high-temperature customized furnaces for manufacturers.
As the rest of the world continues to industrialize, the market is wide open for Thermcraft’s products.
But Crafton told the committee “government agencies that regulate or promote exports are not set up to promote small business.”
Crafton also told the committee that the U.S. commerce representatives “have a set agenda and priorities, and if your objectives don’t match that agenda then you don’t get the necessary assistance to accomplish your goals.”
In a phone interview, Crafton said export programs are “structured a certain way, and if don’t fit that structure, then their help is less valuable.”
Crafton cited as an example working with U.S. and state commerce officials in Shanghai as he was further exploring the Chinese market.
Crafton said he went to commerce officials hoping to learn the best places to do business, but instead officials were asking him for the same information.
“They were saying ‘you tell us where you want to be, and we’ll pave the road,’” Crafton said. “But we didn’t even know those areas, and we didn’t know where to begin.
“In general, it reinforces my belief that there is an awful of inefficiencies and bureaucracy. A private industry trying to operate like that wouldn’t survive but about an hour and a half,” Crafton added.
Crafton said communication was a problem. “There is a fair amount of help if you know the right places to go to. The government surprisingly has a bunch of agencies. What isn’t surprising is they don’t talk to each other. If they could coordinate and organize it would be a lot less confusing and a lot more user friendly,” he said.
Rep. Renee Ellmers, R-2nd District, sits on the House Small Business Committee. Based on the testimony of Crafton and other business owners, Ellmers realizes more needs to be done to help them improve the climate for exporting.
Through a spokesman, Ellmers said the Small Business Committee “has made increasing exports a key priority,” noting that “businesses large and small have been suffocating from increased regulations and bureaucratic redundancies being enforced by the federal government.”
Although Ellmers voted against the free trade agreement with South Korea, she voted for the recent FTAs with Colombia and Panama as well as the Securing American Jobs Through Exports Act, which reauthorized and reformed the U.S. Export-Import Bank, which she described as “an essential tool that helps to level the playing field for U.S. companies to compete in the international marketplace.”
Two of Ellmers’ colleagues on the Small Business Committee have sponsored further legislation to further promote exports.
Rep. Sam Graves, R-Mo., the committee’s chairman, introduced legislation that —according to the committee’s website — “will increase coordination between state and federal agencies to make the export process more efficient, while reducing duplication and wasteful spending of federal trade promotion agencies.”
Rep. Scott Tipton, R-Colo., introduced the Transparent Rules Allow Direct Exporting Act, designed to “help small businesses enter new markets by better understanding foreign regulations.”
Such legislation would be welcome news to business owners such as Crafton of Thermcraft, who no doubt are anxious to fix what he described as “kind of a disorganized mishmash in some cases.”
And while he does not play down the efforts of legislators and commerce officials, he and his fellow business owners are dealing with Washington, after all.
“There’s a lot of potential in manufacturing, but the political climate right now in D.C. is not real conducive to that,” he said. “I don’t look for anything to happen quickly or dramatically,” he said.
Sam A. Hieb is a contributor to Carolina Journal.