The U. S. Export Expansion Program and lts Effects on the Northwest Foresf Producfs Industry

by JAMES M. OWENS, Director Forest Products Division, Business ond Defense Services Administrotion, U.S. Deportment of Commerce

Being an qddress presenfed $y Mr. Owens qt theWorld Foresf ProdvctsTrqde Seminar, Oregon Sfclfe College, Corvolfis, Oregon, Jvne 2, 196l

T AM DELIGHTED to have this opportunity to discuss r with you President Kennedy's export expansion program and its efiects on the Northwest forest products industry. Increasing exports of U.S. forest products and, in fact, of all U.S. goods, is of prime interest to the President and to Secretary of Commerce Luther Hodges, who is directing the export promotion program for the White House. It is a program that receives daily attention in our office. Because of this I was delighted to come to the West Coast to discuss with you the opportunities that industry has to increase its foreign business.

Although U.S. exports of forest products are a relatively small percentage of total U.S. output of forest products, these exports are nevertheless big business in terms of dollar value. In 1960, U.S. shipments abroad of lumber and wood manufactures amounted to $193 million, and we sold $410 million of pulp and paper products to our foreign customers. The Pacific Northwest made a significant contribution to this achievement, as evidenced by the fact that out of a total of $94 million of lumber exports, $60 million, or nearly two-thirds, came from this region. While precise figures on West Coast exports of pulp, paper, paperboard and products are not available, the volume is nevertheless a subslantial part of total shipments to world markets. Obviously this foreign trade meant a great deal to this area in improving profits, keeping the industry operating at a higher level than would otherwise have been the case, and providing employment for many workers.

Greater Export Opportunities

It is our firm belief in the Department of Commerce that the decade before us rvill bring new and greater export opportunities to the American forest products industry. This prediction, I might add, is based on continuous discussions we are having with industry and its trade associations. Increased teamwork between industry and Government is indicated. In addition, there is need for more effective marketing, marketing research, and intensified selling efforts on the part of industry to participate profitably in this attractive but competitive business. Ever increasing export opportunities are rising out of the population explosion around the world and out of the growing drive of people everywhere toward an improved standard of living and a better education. It is superfluous to say that housing and paper are basic to the attainment of these goals.

Competitive Position Will Require Adjustments

Now, I do not wish to imply that the road to expanded trade in forest products is going to be as smooth as a super highway. We can already see bumps ahead, even though at this distance it's hard to tell how big they actually are. We know that the industry is apprehensive about the formation of regional economic groupings abroad, such as the European Common Market, the European Free Trade Association, and similar arrangements in Central and South America. These developments will undoubtedly bring about changes and adjustments in the competitive position of American products. In the opinion of some observers, however, the creation of mass markets overseas comparable to what we have in the United States will eventuallv lead to increased demand for American-made goods, altirough our exports may be composed of somewhat different items than they are at present. Meanwhile, it may be of interest to note that discussions are being held at the General Agreement on Tariffs and Trade (GATT) conference in Geneva with a view to minimizing disruptions in trade with the Common Market and the EFTA which might be caused by reductions in the internal tariffs of these two trading blocs. Our Government representatives at Geneva are fully acquainted with the desires of the American forest products industry in this connection.

Inspired by a strong urge to make maximum use of their own natural resources, many of the developing nations of the world are building up domestic forest products industries. As these industries expand and diversifv their production capacity, in some casei under the prote6tion of high tariffs or other devices, traditional suppliers to these markets have occasionally found it increasingly difficult to do business with them. In many instances, however, the over-all growth of a country's ec6nomy is such that domes- tic production is insufficient to meet the enlarged demand in certain lines, with the result that ner,v e*port trade op- portunities are opened up. Further, especially in the case of pulp, paper, paperboard and products, it is most difficult, or for that matter, impossible, for one netv mill or even a few new mills to produce economically all the thousands of specific grades and products required in a country. Your Government is carefully following the economic growth of countries around the world and is attempting to make sure that whenever a country's economy is sound enough to stand on its own, barriers to U.S. exports are rembved. This is a very important matter, and again makes teamwork between industry and Government essential if we are to increase our exports-for who knows better than industry that artificial trade barriers, such as high tariffs and quotas, must be removed before our exports will be increased.

It is our sincere belief that the American forest products industry today is interested in exports as a long-term proposition. This type of approach is basic to incrEasing export sales, and I can assure you that your Government will give you full cooperation in encouraging continued attention to exports, for unless a sustained effort is made to keep our exports up, our balance of payments difficulties may return in an even more troublesome form.

Program's Goals

You will recall that our national export expansion program was conceived as one of a number of related measures to correct our payments imbalance. This program was ceslgneo to :

1. Maintain the United States position as a leader in tl-re promotion of mutually beneficial international trade ;

2. Strengthen the balance of payments position of the United States to assure its continued abilitv to Durchase supplies from abroad;

3. Extend the benefit of trade to the American people generally, by stimulating in U.S. industry an increased interest in export trade;

4. Assure for American industry the full opportunity to share in the expanding market in the industrially developed conntries of the free world ;

5. fncrease private U.S. business participation in the economies of less developed countries, and thus assist these countries in their development efforts ;

6. Enable U.S. business, both large and small, to increase their sales abroad and thereby add to the growth of the economy.

I should like to mention briefly some of the specific services that the Department of Commerce, as the Government's primary business development agency, is providing to exporters.

Among the services to exporters that are most practical to newcomers and established firms alike are (1) Trade Lists-lists of firms handlring specific commodities in foreign countries; (2) World Trade Directorv reportssummary reports on individual foreign firms, containing the data to determine suitability of these firms as trading connections ; (3) Trade Contact Surveys-specialized consultations by Foreign Service Officers to suggest agents and distributors-which meet an American firm's specific requirements ; and (4) -y agency, the Business and Defense Services Administration (BDSA), which has 25 Industry Divisions representing a broad spectrum of American industry. As you may recall, my Division-Forest Products-follows United States and world trade in all forest products on a day-to-day basis. \Are have information on commodities world-wide. This you can put together with the general economic and political factors that are developed by the country desks in our sister agency in the Department of Commerce-the Bureau of Foreign Commerce. These are well-honed tools for the firm that desires to take the initiative in increasing its exports. These tools are available to industry on the West Coast through the Department of Commerce Field Offices in Portland, Seattle, San Francisco, and Los Angeles. They are also available through my office.

\fue have an equally positive service for the business firm which may not know his goods are wanted abroad-the Trade Opportunity Service. These trade opportunities are specific inquiries for U.S. goods, sent in by our Foreign Service posts around the world, accompaniecl by details on the proposed transaction to assure its bonafides. In 1960 we published about 6,500 of these foreign requests for U.S. goods, an increase of more than 50 percent over 1959. Part of this increase is undoubtedly due to the removal of import restrictions which began to occur in many foreign countries ; but most of it, in my opinion, is due to the irrcreased cooperation between industry and Government in approaching the export markets. Information of this type is published in the Foreign Commerce Weekly, a publication of the Bnreau of Foreign Commerce, available by subscription tl-rrough either our Field Offices or the Superintendent of Documents, LI.S. Government Printing Office, Washington 25, D.C. I clo not know where you can get rnore information on export-import leads. In addition, I call your attention to the Pulp, Paper and Board Industry Report, whicl-r is published quarterlv by our Division. Each issue carries a column highligting export trends. This is also available through subscription to the Superintendent of Documents.

Are You Aware of New Markets?

Many American companies are still unaware that products can today be sold abroad that formerly were practically prohibited because of the restrictions placed on imports from the dollar area by foreign countries ever since World War II. There is constant need for government and busi(Continued, on Page 76)

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