Don't let 'em scare you. "America's trade deficit is a sign of strength, not weakness," argues Daniel T. Griswold, associate director of the Center for Trade Policy Studies at the Cato Institute, a libertarian think tank in Washington, DC.
Griswold is the author of a recent study that dispels a number of economic myths. "The trade deficit isn't a result of unfair trade barriers," he contends. "What controls the deficit is investment flows. The money flowing out of the United States to buy imports flows back in net investment."
In other words, the cash Americans spend on goods helps drive foreign economies, which export capital back here. That keeps interest rates down, making it easier for U.S. companies to acquire the equipment they need to grow.
"Entrepreneurs should focus on the capital side of the trade deficit issue," Griswold says. "They should realize there's a lot of capital coming into the United States, and that creates more opportunities."
Christopher D. Lancette is a journalist in Atlanta who covers international topics for Hispanic Business and other publications.
Try these on for size.
Internationally minded entrepreneurs may want to get their hands on a pair of recently released resources:
- The Export Institute, a Minneapolis-based export consulting firm, has put "How to Become a Successful Export Agent" on the Internet (http://www.exportagent.com). This 20-page report was designed to teach people the ins and outs of what can be a tricky trade. In addition to the helpful financial resources and business expertise, there's a 10-step action plan for getting started. The best part? It's free.
- On the other end of the fee scale is "Consumer Latin America 1998," a hefty volume of consumer market and socioeconomic information compiled by Euromonitor International. For $850, you get the most up-to-date data on 230 consumer markets as well as tons of economic stats on Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela. The 300-page compendium includes market opportunities, national and regional trends, market trend forecasts and other goodies. To order a copy, call (800) 577-EURO, ext. 222.
Name and age: Craig Vaughn, 44
Company name and description: Craig's Carpets Inc. is a $6 million flooring broker.
Based: Dalton, Georgia
1997 sales: $5.5 million
1998 projections: $6.5 million
Going global: As an experiment, Vaughn placed an ad for his flooring products in a trade magazine in 1996. To his surprise, a company in the United Kingdom called to place an order. Figuring there were more customers where that one came from, Vaughn attended a U.S. Department of Commerce course called "Passport to Export." After learning the basics, Vaughn targeted markets in the United Kingdom, Canada and the Philippines. Those efforts increased his sales by 1 percent the first year and are on track to a 4 percent increase this year.
Paper chase: The biggest challenge Vaughn faced was learning how to shuffle the massive amounts of paperwork involved in international sales. "That's the biggest part of the deal," he says, "and if you get it wrong, you're in trouble."
Let me tell you: "Your company can make money doing business internationally. You've just got to get in there and figure out how to do it."
Craig's Carpets Inc., (800) 535-8789, http://www.kdco.com/craigscarpet