US Targets World's Emerging Markets for Business
THE United States is launching an offensive to win markets in countries where economic growth outpaces that of the industrialized world.
Washington is eager to claim a commercial stake in the world's fastest-growing nations, including some previously off-limits to American industry. But many of these nations have been abusive of human rights and pose prickly problems for US policymakers.
Keenly aware of fiercely competitive global suppliers and the importance of US exports to domestic job growth, the Clinton administration is dispensing with the approach of predicating commercial ties on how foreign governments measure up to democratic standards.
In its place is a major interagency effort, with the Central Intelligence Agency providing important economic analysis for investment, the US Export-Import Bank targeting small and mid-sized American firms for government assistance in exporting their goods and services, and the Commerce Department directing business traffic abroad and removing obstacles in the way.
``Governments can sign treaties and open the door between countries, but who goes through that door? Business does,'' says David Rothkopf, Commerce Department deputy undersecretary for international trade, emerging markets, and policy development.
``Business is a communicator of ideals, values, and culture,'' says Mr. Rothkopf, who is on a whirlwind 12-day, six-country trip to Asia. ``The best way to influence economic and political reforms,'' he says, ``is at the joint-venture level, creating investment programs, partnerships'' and lucrative markets for US business.
Export-Import Bank chairman Kenneth Brody, whose institution spent $15 billion financing and guaranteeing US export sales in 1993, is seemingly unbridled in his quest for new markets. He wants to see smaller firms join Ex-Im's corporate clients in the fight for overseas contracts. Among the most promising, he says, are big infrastructure needs, from electric service to the most sophisticated telecommunications networks.
Emerging marketeers have a list of top 10 prospects: Argentina, Brazil, Mexico, Poland, South Africa, India, Turkey, South Korea, Indonesia, and the so-called economic zone of China, Hong Kong, and Taiwan. But other profoundly changing economies, such as Russia, Vietnam, and the Israeli-occupied West Bank and Gaza Strip, are also in their focus.
``In each country we have 10 to 12 meetings a day with CEOs, government officials, with people who can do the deals,'' says Rothkopf of his trips. ``Every place we go, we sit down with the American Chamber of Commerce and with locals to see how they view the local market opportunties.'' US firms anxiously eye Indonesia, where 188 million people who live on 13,000 islands ``have to be linked by telephone and power grids,'' he says.
The biggest prize is an entree for US entrepreneurs in the world's most populous nation and fastest-growing economy, China. President Clinton has supplanted his focus on human rights there with an effort to secure a commercial foothold. But in the near term, China's importance is as an export platform to east Asia.
``Each one of the markets we've picked is a regional driver'' of economic change in its vicinity, Rothkopf says. China, an economic giant, for example, or South Africa, which represents 45 percent of the African continent's gross domestic product, will both have an immense impact on their respective regions, he says.
Vietnam embargo lifted
The administration's most recent decision to lift the trade embargo against Vietnam, a country where foreign investors have been lured by abundant natural resources, cheap and hard-working labor, and more than 70 million consumers.
But to many troubled by unresolved prisoner-of-war issues and tyrannical behavior by the Communist-led Vietnamese government, Washington is selling its democratic soul. Others, such as the National Association of Manufacturers, regard the opening as a positive sign that Washington is removing the shackles from US industry.
Pressure is mounting to forge ahead in emerging markets where major global challengers are already present.
Trade maven and House majority leader Richard Gephardt (D) of Missouri expressed astonishment recently after his own tour through Indonesia, Thailand, and China. ``The amount of Japanese investment in these countries is staggering, much more than ours!,'' he said. ``All five Japanese car manufacturers are in Thailand, for example; we have no one there. In terms of competing, we are AWOL. We need to encourage our companies to be more aggressive ... to be concerned more about American investment. Half of the world's population is in Asia.''
Representative Gephardt says his ``greatest worry about our export promise is we're a country of small and medium-sized businesses. It's pretty hard for small companies to go to places like Vietnam. We need government to help....''
The White House must move faster to eliminate unilateral export sanctions and boost spending on export promotion, prods a new report issued by the Council on Competitiveness, a group of business, education, and labor leaders. While the ``Clinton administration has placed a priority on America's global competitiveness ... a lingering cold war mentality has produced foreign policy decisions that are costing the nation's economy millions of dollars and thousands of jobs a year.''