EDR and International Trade

International Trade

Globalization has made International Trade a key component of any region’s economic development efforts. With the nation’s two largest ports and proximity to Asia, South America and our two leading markets, Mexico and Canada, businesses in Southern California enjoy substantial export advantages – and cities and regions that promote International Trade for their businesses will reap the benefits.

EDR team members have significant experience in three key components of an International Trade strategy: Trade Promotion, Foreign Direct Investment and Exporting. Led by Executive Director Vance Baugham, the EDR team brings decades of experience and personal contacts in numerous countries, including China, Japan, Korea, Germany, the United Kingdom and Mexico.

Trade Promotion

Promoting trade, identifying markets and facilitating investments is crucial to a successful International Trade strategy. Marketing regions, providing special support for initiatives and assistance to firms are the backbone of a trade initiative. A trade promotion program includes:

• Approaching government agencies, companies and business organizations for trade and investment targets
• Identifying compatible markets and opportunities
• Organizing trade and investment mission program workshops
• Supporting a trade mission to promote trade and investment expansion
• Following-up on trade and investment opportunities generated

EDR will provide a full range of professional services and its management team has decades of successful business and marketing experience, including organizing and leading over 20 successful trade missions.

Foreign Direct Investment

Foreign Direct Investment (FDI) is a direct investment into production or a business by a company from another country. Foreign direct investment is different from portfolio investment, which is a passive investment in the securities of another country such as stocks and bonds.

Because the United States is an open economy with few barriers and an enormous market, there is significant FDI activity here – over $194 billion in 2010. The countries of Switzerland, the United Kingdom, Japan, France, Germany, Luxembourg, the Netherlands, and Canada represented 84 percent of FDI in 2010.

Does FDI have an impact on our economy? In 2011, facilities dependent on FDI employed 5.7 million workers – including 13 percent of the American manufacturing workforce. According to a federal report, the average pay of these jobs was about $70,000 per worker, over 30 percent higher than the average pay across the entire U.S. workforce. Familiar examples of FDI include the automakers Toyota, Honda, Nissan and Daimler-Benz.

The local and regional benefits to FDI are significant in terms of jobs and business growth. Southern California is one of the world’s major markets, and in today’s global market, attracting FDI is a sound economic development strategy.

Exporting

In a global economy, exporting goods and services can be key to a region’s prosperity. The U.S. export record pales in comparison to other countries. Just over 50 percent of Germany’s GDP results from exports; in comparison, exports represent only 14 percent of the U.S. GDP. The rapidly developing economies in Asia and Latin America offer enormous markets for local firms. With the nation’s two largest ports and proximity to Asia, South America and our two leading markets, Mexico and Canada, businesses in Southern California enjoy substantial export advantages – and cities and regions that promote exporting for their businesses will reap the benefits.

The national effort to increase exports is having an effect. In 2011, U.S. exports in goods and services hit a record $2.1 trillion. An additional 1.2 million jobs were created in 2011 as a result of exporting. Over 293,000 U.S. firms export, including 287,000 small and medium sized enterprises. The EDR team has substantial export experience that can leverage regional and national resources to promote additional international trade.