Tuesday, Aug 21, 2012
Arkansas Companies See Increase in Exports
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LITTLE ROCK - Arkansas companies that export products to foreign countries saw a 36 percent increase in business for the first half of 2012, according to a government agency that keeps track of international commerce.
The value of Arkansas exports increased from $2.8 billion in the first half of last year to $3.8 billion for the first half of 2012. Several countries sharply increased their demand for Arkansas products - Indonesia by 228 percent, Germany by 178 percent, Brazil by 170 percent and France by 116 percent.
Arkansas firms shipped transportation equipment, chemicals, food, agricultural products and machinery, according to the International Trade Administration (ITA), a branch of the federal Commerce Department. The ITA reports that 1,472 Arkansas companies export products overseas and the overwhelming majority of them, 79 percent, were small and medium-sized businesses.
The Arkansas Economic Development Commission (AEDC) promotes foreign trade, as well as foreign investment in firms based in Arkansas. Companies controlled by foreign interests employ an estimated 33,500 Arkansans. France, Great Britain, Japan and Switzerland are major investors in Arkansas businesses.
Last week the AEDC opened an office in China to promote trade. China is the third largest importer of Arkansas products, behind Canada and Mexico. Chinese purchases of Arkansas products have boomed over the past 10 years. In 1999 China bought $15 million of Arkansas products. Last year the value of Arkansas goods sold in China was $413 million.
Canadian firms bought $1.4 billion worth of Arkansas products and Mexican firms bought $679 million worth. After China, Japan ($214 million) and Korea ($195 million) are the next largest consumers of Arkansas goods and services.
The AEDC also encourages foreign companies to invest in Arkansas and to hire Arkansas workers. Now, foreign-owned companies employ 3.5 percent of the private sector workers in Arkansas.
The AEDC has an office in Japan, and an employee based in Little Rock who often travels to recruit industries in Europe. Also, the agency partners with the World Trade Center of Rogers, a non-profit governmental organization affiliated with the University of Arkansas that since 2007 has been helping Arkansas companies expand their international presence.
Exports represent a sector of the American economy that is growing steadily. From 2009 through 2011 American companies increased their exports by more than 15 percent a year. Last year 9.7 million Americans worked in businesses that depend on exporting goods and services overseas. That is up by 1.2 million workers in 2009.
In addition to fostering international business, the AEDC offers 11 separate incentive program designed to create jobs and promote investment in companies that locate in Arkansas. Most of the incentives require companies to create a certain number of jobs, and invest a certain amount of money, in order to qualify for tax breaks.
Incentives may depend on the type of business - technology, research, tourism or manufacturing. They also may depend on the location of the company. Some incentives are greater if the company creates new full-time jobs in a part of Arkansas that has higher than average unemployment rates.