Exports: Rocket Fuel of US Economy
Selling Sandpaper's 'Sticks' to India: Even small firms now sell abroad, a trend that may change politics of free trade.
WASHINGTON AND TRAVERSE CITY, MICH.
In the mid-1980s, only about 10 percent of Keith Blanford's Traverse City-based abrasives business was outside the United States. And most of that "exporting" was to Big Three automakers' factories located just across the Detroit River in Windsor, Canada.Skip to next paragraph
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This year, 60 percent of Mr. Blanford's business is overseas. And more than half of Bromide Engineered Abrasives' overseas orders come from the Pacific Rim.
Bromide remains a small firm compared with Detroit's industrial giants. But its success in finding foreign markets - success matched by some of its neighbors at the Traverse City Airport Industrial Park - represents a big story for the US.
Simply put, the global economy now reaches into every corner of America, even the edge of Michigan's northern pines-and-sand-dune country. Export growth has become one of the major engines of the country's long economic expansion.
And as more workers experience the benefit of trade first hand, support for tighter export-import ties with the rest of the world could increase. Short term, whether that helps President Clinton in his fight to expand the North American Free
Trade Agreement (NAFTA) remains to be seen. Long term, it could profoundly alter US attitudes toward protectionism and foreign competition.
"Now that I see how overseas trade can help the company and create more jobs, I'm stronger on free trade than I used to be," says Eric Birgy, a Bromides Engineering machine operator.
"Competition - bring it on," adds co-worker Rich Helfrish. "Personally, I think trade is better now than it was a few years ago. From what I see, it is more of a two-way street than a one-way street."
If US trade is a street, then traffic is increasing. Exports and imports of goods and services accounted for a record 28.4 percent of gross domestic product (GDP) in the second quarter of 1997, according to US Commerce Department figures. Five years ago, the comparable figure was less than 21 percent.
Phones from Norway
It isn't just an appetite for imports of Norwegian phones and Japanese cars that's driving that figure. American firms are selling more and more things to the rest of the world. Exports of US goods have increased 24 percent since last fall. It's a surge that accounts for almost half of the overall growth in the US economy over that time period, say economists.
Exports alone still account for a relatively small slice of the overall GDP, about 12 percent. But "at the margin they are growing faster than the rest of the economy," says Robert Z. Lawrence, professor of international trade and investment at Harvard University's Kennedy School of Government in Cambridge, Mass.
Agriculture and capital goods remain the nation's dominant export categories. Boeing, IBM, and other high-tech manufacturers account for much of the US export dollar figure.
But an increasing number of small businesses, facing stiff competition and saturated markets at home, are discovering the opportunity of foreign markets.
Consider the case of Bromide Engineered Abrasives. Bromide employs 35 people to manufacture, sell, and ship what owner Blanford calls "little sticks." These 6-inch-long sticks are used like a file or whetstone to polish and fine-tune the metal molds for plastic parts. To obtain a glossy-smooth finish on your phone, for instance, phone manufacturers have to be fussy about maintaining their steel or aluminum plastic-injection molds. That's where products like Bromide's come in.
For Bromide employees, the benefits of rising US exports are as tangible as their last paychecks. The pros and cons of NAFTA and Mr. Clinton's proposal to expand the agreement to include more countries, however, weigh on these workers' minds about as much as an NFL quarterback thinks about the physics behind a football's flight during a game.