D.C. shutdown ‘really gumming up works’ for some small biz
Last year, the Detroit metro area exported more than $55 billion worth of goods to the world — a 12 percent increase from the previous year, according to the U.S. Department of Commerce’s International Trade Administration.
But if the federal government shutdown wears on, growth in exports could be stifled — and small businesses could be hamstrung in their efforts to expand internationally.
Nobody is at work to approve new export permits or commodity classifications, for example. The United States Commercial Service is unable to provide market research or matchmaking services. Embassies are not open, putting government-sponsored or affiliated trade missions in limbo. Agency websites, including the trade administration, aren’t functioning, preventing mission organizers from accessing historical data.
“It’s really gumming up the works,” said Noel Nevshehir, director of international business services at Troy-based Automation Alley, which has led 19 trade missions worth $282 million in sales for local companies.
Particularly annoying to him is the lack of access to government websites.
“We got an inquiry from the lieutenant governor’s office today,” Nevshehir said. “He’s meeting with the consul general from Poland, and he asked us for trade statistics. But you go on these websites and you can’t find the information.
“We’re trying to plan our strategies in terms of what countries we’re going to take trade missions to and get our business plan approved, but I can’t get any information on Mexico and Saudi Arabia because everything is shut down.”
So far, the pinch hasn’t extended to local firms that already export or that recently returned from trade missions, such as the 10-day trip to China and Japan that Gov. Rick Snyder led in September. Business organizations, including Automation Alley, the Michigan Economic Development Corp. and the Detroit Regional Chamber of Commerce, have yet to hear from members about problems with the exporting process.
Yet the national organization that represents importers and exporters is awash in struggles.
“Let me give you an example,” said Marianne Rowden, president and CEO of the Washington, D.C.-based American Association of Exporters and Importers. “We have a member company that exports nutritional supplements. The company had to get a USDA veterinary certificate because the importing country wants something from the USDA. But with the shutdown, that company’s shipments are dead in the water; they literally could not ship them.”
Another problem, she said, is that the basic exporting license expires after two years, so the longer the shutdown lingers, the more companies could get trapped in limbo. Even a small stone could make a big ripple in the country’s $2.2 trillion export industry.
“I think people will be surprised how much exports will be affected,” Rowden said.
One agency that is functioning close to normally is the U.S. Customs and Border Protection because its duties are essential to national security. That means the nation’s ports — including the port of Detroit — are open for business.
“The shutdown has not affected the port,” said John Jamian, executive director of the Detroit/Wayne County Port Authority. “We’re fortunate; it hasn’t affected cargo yet. But it has affected us in a weird way. We were expecting the new Saint Lawrence Seaway Development Corp. administrator to come and speak. We had a very large crowd for a breakfast with the chamber, but unfortunately the shutdown did affect her so she couldn’t attend.”
For Jeff Jorge, the shutdown has had a huge impact on his business. A positive one. His Royal Oak-based Global Development Partners acts as a private matchmaker for firms seeking to expand into foreign markets, performing due diligence for clients, including market researching and finding and vetting potential trade partners. Now his phone is buzzing with new clients.
“It’s been going off the hook,” said Jorge. “We already grew just this year, we had already blown all of our metrics for 2012 by April, and that’s without a government shutdown.”
Even though this could be lucrative for Jorge, he’s been offering some pro bono consulting.
“There is no one to help these companies,” Jorge said. “When you have a company that went on a trade mission, and they have a deal in the works but they are depending on U.S. Commercial Services or an embassy to get documents to and from, or to assist perhaps in foreign trade financing or that kind of thing, it’s going to come to a halt.
“These workers are wonderful people and they want to help, but by law they are not allowed to.”