The coronavirus’ effect on world trade has highlighted the work of organizations that small and medium businesses in Arkansas need to know about: District Export Councils.
Members of the councils volunteer to help businesses in their communities establish or increase export sales, contributing to the country’s economic growth and creating new and higher paying jobs. DEC members also sponsor and participate in trade promotion activities, as well as advocate for effective trade policy positions.
Closely affiliated with the U.S. Commerce Department’s Export Assistance Centers and the U.S. & Foreign Commercial Service, the more than 60 DEC organizations throughout the country support the government’s export promotion efforts.
Nationwide, there are about 1,500 DEC members, 35 of whom are in Arkansas.
The councils can help develop an effective export assistance network and coordinate the activities of trade assistance partners to leverage resources. DECs also serve as a communications link between the business community and the U.S. & Foreign Commercial Service.
Although DECs are a government creation and individual DEC members receive appointments, neither DECs nor members represent the federal government.
Every year at the Governor’s Awards for Excellence in Global Trade event at the Governor’s Mansion, the Arkansas District Export Council recognizes companies that have made significant strides in increasing their exports.
Why have District Export Councils sprung to mind now? Well, one reason is the coronavirus, COVID-19.
The Arkansas District Export Council, as well as the National Association of District Export Councils, puts out continuous guidance to its members and the general exporting community on many trade topics. Most recently, we discussed the effects of the virus.
In addition to China, the problem has also materialized in Hong Kong, Singapore and other regions. In Wuhan alone, 60 million people have been quarantined, which has affected inland transportation as well as transportation into and out of China. This has led to the shutdown of factories and is already causing global supply chain disruptions. One has to remember that the vast majority of coronavirus cases are in China, and China exports $2.7 trillion worth of products to the world, a significant portion of which goes to the United States.
So far, the U.S. sectors most affected have been the high-tech industries, but the pharmaceutical and automotive industries are facing significant impacts. Arkansas, of course, has companies in these industries, and it’s only a matter of time before they feel the effects of the coronavirus.
Even in terms of U.S. exports to China, we’re going to see negative effects on U.S. companies soon as sales decrease because the Chinese aren’t buying what they can’t handle at this time. As a consequence, we will see a slowdown of U.S. sales to China and other locales, such as Hong Kong and Singapore.
Supply chain analysts are pointing out that the decoupling — which has been occurring because of tariffs, intellectual property theft, forced technology transfers, etc. — is now actually accelerating because of coronavirus-related supply chain issues.
For those who hoped things would “normalize” and return to pre-tariff days, this should be a clarion call. The need to diversify one’s supply chain has never been clearer and more important than it is now. And that is something that District Export Councils can help small and medium-sized business in Arkansas address.
Mission of the DECs
The mission of the District Export Councils is supported through the following:
- Counseling and mentoring of local businesses in exporting;
- Identifying export financing sources for businesses;
- Creating greater export awareness in the local business community;
- Identifying issues affecting export trade and implementation of suggestions for improvement;
- Advocating trade policy and legislation supporting exporters and the U.S. export sector;
- Backing the programs and services of the U.S. Export Assistance Centers;
- Building local export assistance partnerships with other trade-related organizations; and
- Providing export training and education through Export University programs.
While DECs and individual DEC members engage in legislative advocacy and outreach on trade issues, DEC members are prohibited from being registered lobbyists, and neither DECs nor DEC members engage in any activity that requires lobbying registration.
Rudy Ortiz is manager of client service at Arkansas Economic Development Commission and chairman of the Arkansas District Export Council. Email him at ROrtiz@ArkansasEDC.com.
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