US export firms: updating America's role as Yankee trader
In the 1800s, the clipper ships of Yankee traders, swift as greyhounds, swept out of New England ports, carrying lumber, cotton, and American-made machines to exchange for the riches of the East.
Soon, the cargo ships of a new generation of Yankee traders will be plying the seven seas, carrying to foreign ports such exemplary United States products as catfish, orthodontist's pliers, and preppy clothing.
These modern versions of the China trade firms of old are called export trading companies. Basically, they take someone else's products, find a ripe foreign market, and then make sure the goods are delivered safely.
Congress last year passed a bill making it much easier to form these trade companies. So far, the action has piqued the interest of organizations from the city of Philadelphia to fish farmers.
The catfish farmers of America are convinced that the time is ripe, so to speak, for catfish to conquer the world. So on June 9, the day the Department of Commerce began accepting applications, a consortium of 400 catfish farmers and four catfish processors filed to form an export trading firm - the US Farm-Raised Fish Trading Company.
''We grow the product in a controlled environment. It goes from live to frozen in 21/2 minutes. We're dealing here with the best quality fish product there is,'' Seymour Johnson, president of the proposed firm, says from his Indianola, Miss., office.
Currently catfish exports are minuscule. But Western Europe and the Far East both consume much more fish, per capita, than the US does, making them prime potential markets. Mr. Johnson says he has already made a marketing swing through Europe, including a stop at a Paris food show, and received much positive reaction.
''We think we can compete with Dover sole, lemon sole,'' says Johnson. ''You've just got to overcome the name.''
In Philadelphia, the city itself wants to dabble in foreign trade. The Philadelphia Industrial Development Corporation (PIDC), a semi-public economic development agency, is planning to start an export trading company.
''The Philadelphia area economy has a very large percentage of small to medium-sized companies that don't have the resources to export on their own,'' says Jim Petkovits, PIDC manager of international marketing.
A local firm that makes high-quality orthodonist's pliers, for instance, wants to expand its exports, but doesn't have the necessary money or expertise. A Philadelphia candy machine manufacturer's product is ''just dandy for export, '' says Mr. Petkovits, as is locally made preppy-style clothing, which ''is very popular in Japan.''
The PIDC expects eventually to back out of the City of Brotherly Love's trading company, turning it over to the private sector. Farther north, the Port of New York and New Jersey is also forming an export trading firm.
At BankAmerica, in San Francisco, consultant Susan Stafford is working 12 -hour days in an effort to get their trading company up and running by November. ''I just dream about weekends,'' she sighs.
Last year's bill allowed bank holding companies to join in export trading firms for the first time. So far, only a handful of large banks, such as Bank of America, have announced plans to participate.
Initially, BankAmerica, Bank of America's holding company, will concentrate on helping export California agricultural products, such as rice and dried fruit , and a range of Silicon Valley electronics products, says Ms. Stafford.
Their first target area will be the Pacific Basin. BankAmerica's still unofficial trade arm has opened offices in Singapore, Manila, Tokyo, and Hong Kong, though its president, Peter M. Nelson, is currently out ''slicing up Europe,'' laughs his compatriot, Ms. Stafford.
All these US export efforts are being patterned after the proud champions of international trade - Japan's ''sogo shosha,'' or general trading companies. These heavyweight Japanese firms - Mitsui, Mitsubishi, and C. Itoh & Co., among others - are so large that they handle about 9 percent of merchandise exports from the US alone.
One type of export company has existed in the US for some time. Called ''export management companies,'' these firms often don't have the financing muscle of Mitsui, Mitsubishi, and others. Most of them don't offer a full range of exporting services, and few scour international markets for new deals.
So Congress, in the face of stiffening international economic competition, last year passed the Export Trading Company Act of 1982. Among its more significant aspects, the bill allows competitors that band together for export purposes protection from antitrust laws. For the first time, it also allows banks, with their rich financial resources, to join US export ventures.
The bill has apparently sparked much interest in export trading firms, though some recently announced ventures - such as Sears World Trade - probably would have been legal without the new law. Commerce Department officials refuse to divulge how many export trading company applications have been filed so far.
''There's not a big bank in the country without an internal task force studying this,'' says Richard Cooper, an economist with Coopers & Lybrand. ''I can see the entire spectrum of the American economy participating.''