U.S. Export Trading Company: A Model of Export Promotion in the 80’s

Abstract

In order to promote US exports in the 1980’s, it appears that complete reliance on the existing channel of international distribution which consists primarily of the Webb Pomerene Associations (WPA’s) and the Export Management Companies (EMC’s) would be disastrous due to many problems which stem form the organization of those export firms. the “Why bother?” and “Do-it-yourself” attitude of the US manufacturers and the lack of an adequate legal framework which is needed to promote the expansion of a viable US export organization. Lessons of experience gathered from the Japanese Sogo Shosha and European export trading companies (ETC’s) indicate that it is conceivable to formulate and American model of ETC. To be successful, such American model of ETC requires a strong back-up form the US Government in order to provide incentives to US manufacturers to export and to do so through the ETC’s. The government should also provide an adequate legal framwork in order to promulgate the development and growth of US Export Trading Companies. The Webb Pomerene Act of 1918 could be amended and improved in order to allow the US ETC’s to integrate vertically or horizontally and to include exports as well as imports for better economies of scale. Finally, it is even conceivable to make the American ETC a quasi-public institution in order to avoid anti-trust complications.