Montana has benefited immensely from federal free trade agreements, with its number of exports growing at nearly the highest rate in the nation. Tiny businesses and large companies alike are taking advantage of the new markets.
But according to U.S. Chamber of Commerce officials and Sen. Max Baucus, D-Mont., the state has seen only the tip of the iceberg.
At a recent conference in Kalispell’s Red Lion Hotel, Baucus, U.S. Chamber representatives and prominent businesspeople from around the state discussed the successes of existing international trade in the Big Sky state as well as the potential for expanded export markets. The conference, called Business Opportunities for Montana, was organized by the Chamber’s TradeRoots program in conjunction with the Montana and Kalispell chambers of commerce. The seminar was also held in Bozeman.
A common theme throughout the conference was: Even small businesses can enter the global market, as many Montana companies are proving. In an interview, Leslie Schweitzer, senior trade advisor for the U.S. Chamber in Washington D.C., and Liz Reilly, director of TradeRoots, said the majority of the nation’s exporters are small to medium-sized businesses.
“It’s not just for the big guys,” Schweitzer said.
According to U.S. Chamber statistics, 870 companies exported goods in Montana in 2004 and 83 percent of those companies had fewer than 500 employees. Many have fewer than 20 employees, including Timeless Seeds, a specialty organic seed company based in Conrad. David Oien, president of Timeless, told the conference audience that when he began trading internationally he had only one other co-worker.
In the Flathead area, companies such as Timberline Tool, Semitool and CHS, Inc. are already heavily involved in international trade.
Schweitzer said 96 percent of consumers live outside of the U.S. But figuring out how to reach them can be difficult, as Timeless and other Montana companies have found out. Among the obstacles businesses face are figuring out the appropriate global markets, especially without knowing the language of those countries; freight and transportation costs; and adequate financing to get global operations off the ground.
But Curt Pijanowski, founder of The Milky Whey, Inc. dairy company of Missoula, stressed “there are no insurmountable hurdles.” Oien added that there is a large demand for Montana products.
“We really have, at least in some way, capitalized on the Montana mystique,” Oien said.
Kalispell Chamber of Commerce President Joe Unterreiner said in an interview that while many people view Canada as “almost like the 51st state,” it’s the United States’ biggest international trade partner and a logical destination for nearby Montana. Unterreiner said more local business owners are recognizing the viability of Canada, as well as other countries, and shifting their marketing focus accordingly.
“It’s beginning to think internationally,” Untereinner said.
According to figures from the U.S. Chamber, Montana was one of three states that doubled its exports between 2002 and 2006. In that period, the state’s exports jumped in total value from $386 million to $887 million. In 2005, manufactured goods produced within the state generated 5,100 jobs in Montana, while 6,400 Montanans are employed by foreign companies. And since NAFTA was established in 1994, Montana’s exports have increased by 174 percent, with about a quarter of all the state’s agricultural revenue coming from exports.
“The point of all this,” Schweitzer said, “is to point out that international trade is economic development.”
Free trade agreements are the major issue for expanded global business, as they open up new markets and ease the strain of tariffs. At the seminar, Sen. Baucus said that while free trade agreements within the past several years, such as 2005’s U.S.-Australia FTA and others that are pending, are steps in the right direction, the U.S. is falling behind in international trade. Ambassadors from several countries with which the U.S. is negotiating an FTA or already has one attended the conference, including officials from Peru, Colombia, Vietnam and Morocco.
Baucus is the chairman of the U.S. Senate Committee on Finance, which oversees trade. He stressed the importance of expanding foreign trade on a national and local level.
“We’re missing the boat in America,” Baucus said. “We can all tread water, (but) we’ve got to move.”