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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.

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According to Bromide workers, their firm's growing export business has helped produce changes on the shop floor and new attitudes about America's trade relations.

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"I think about the competition," says machine operator Eric Birgy. "We have to constantly cut costs and find ways to work more efficiently because labor is so much cheaper over in China or Mexico."

Improvements aren't motivated so much by concern for losing existing customers. Rather, the firm needs to lower the price of its product to enter new markets. Shop workers have formed teams and found ways to reduce waste and improve productivity on the cutting tools used to slice the "little sticks" from larger blocks of abrasive material, for instance.

Mr. Birgy says he never has held strong protectionist views on trade, but he had some general concerns about NAFTA's effects on the economy when presidential aspirant Ross Perot predicted a "giant sucking sound" of American jobs going to Mexico.

Bromide employees say there is no big secret to their company's success overseas. They attribute the export growth to a high-quality product, "boring reliability" in filling orders, and a guy named Heinz.

Carol Danly, the customer-service representative who handles international orders, said retired vice president Heinz Gfroerer - a German-born Canadian - set up all the distributors overseas. The current sales staff isn't multilingual. Business is conducted in English, and overseas customers aren't treated much differently than domestic ones.

Because of the time differences, international transactions are mostly done by fax.

Overseas customers in 27 different countries buy Bromide's "little sticks," in spite of high tariffs and duties erected to keep American and other foreign products out.

Customers in India, for example, are not allowed to write checks for more than $5,000 to non-Indian companies. Ms. Danly says the customers get around the restriction by asking her to split orders into two or more boxes.

The story of AlcoTec

Bromide isn't the only Traverse City firm with foreign customers. AlcoTec, an industrial-park neighbor that makes aluminum welding wire, has had similar success.

Exports accounted for about 6 percent of AlcoTec's business five years ago, says co-owner Bruce Anderson. Today they account for 30 percent.

Mr. Anderson says much of AlcoTec's overseas growth is the result of its dominance in the US market. But the company has had to develop new tactics to take business abroad, he adds.

"We Americans are fine-tuned business machines, which is not always advantageous," Anderson says. "Before you go overseas, you need to have a full appreciation of their attitudes towards business, and then you have to develop relationships in their comfort zone."

Despite Anderson's international marketing success, reasons for the day-to-day complications of selling overseas are still a bit mystifying for AlcoTec import-export coordinator Cindy Piotrowski. "It's hard to understand why [foreign governments] have so many restrictions," she says. "But the world ... does seem to be working together better."

Does this developing sea change in US attitudes toward exports herald success for Clinton's attempt to expand NAFTA?

Some polls indicate that it might. Fully 78 percent of Americans now favor expanded trade on a reciprocal basis, according to one recent survey.

But it's not clear that such a general attitude translates into support for specific political proposals. Even the president's allies admit he may have a tough time attracting enough Democratic votes to garner the expanded negotiating authority he needs for NAFTA expansion. "It's not going to be easy" to pass so-called "fast-track" trade negotiating authority, says Senate minority leader Tom Daschle (D) of South Dakota.