Maine exports drop 14%, but trade expert predicts 2021 rebound

Courtesy / Maine International Trade Center Maine International Trade Center said Maine exports have dropped 14.4% year-to-date decline versus 2019. But export opportunities are expected to grow.

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By Laurie Schreiber

Maine companies exported $1.5 billion of products to 153 countries from January through August, which represents a 14.4% year-to-date decline versus 2019, according to U.S. Census Bureau data provided by the Maine International Trade Center in Portland.

But the opportunities for small businesses to grow by exporting are substantial, especially during this unprecedented time, the center believes.

Wade Merritt, MITC president and the state’s director of international trade, told Mainebiz the international market should rebound in 2021.

“Global trade is down. There’s no question about that,” Merritt said. “But one of the things we’re excited about, and that we’ve been encouraging companies to think about, is that, as sharp as the downturn has been, the international market is expected to rebound quite substantially in 2021.”

He added, “I think a good part of the recovery strategy for companies is to be thinking about global markets, and to think about investing in contacts and connections overseas, so that when the rebound comes, they’ll be confident in taking advantage of it.”

The data

According to MITC:

• Maine’s top exports remain aircraft parts, semiconductors, seafood and forest products. Shipments of petroleum to Canada are also significant exports from Maine.

• Maine’s top trade partner remains Canada. In total, 49.5% of Maine exports went to Canada in 2019.

• In 2020, Maine exports to Canada through August posted a modest decrease of 4.6% over the same time period in 2019.

• Nationally, exports year-to-date declined 16.1%, due to the pandemic.

However, World Trade Organization economists now believe trade volumes will register about a 10% decline in 2020, with a partial rebound in global markets likely in 2021, according to Merritt.

His observations came on the heels of the latest award to MITC of $461,000 from the U.S. Small Business Administration through its State Trade Expansion Program, or STEP.

The program is designed to support export growth among small businesses.

This year’s award represented an increase of over $116,000 in funding compared to last year.

Through 2019, over 40 Maine small businesses have received STEP Financial Assistance Awards, resulting in $2.9 million in actual sales with an additional $19.7 million projected in the next 12 to 18 months. The figures represent a 22:1 immediate return and a projected 144:1 future return on grant funds.

Recipients of the last round of STEP funds include Planson International in New Gloucester and VETRO FiberMap in Portland.

Planson is a specialized global IT solutions provider to international organizations focused on development, sustainability and emergency response. The company used STEP funds for a project to optimize its website needs to for customers with low bandwidth and poor internet connections.

VETRO, which provides mapping tools for small and mid-size Internet Service Providers, used STEP funds to establish a market presence in the United Kingdom, European Union and South Africa.

Paradigm shift

The pandemic has resulted in a paradigm shift to increased web-based sales and virtual trade missions to reach the world’s consumers located outside the United States, Merritt said.

PHOTO / JIM NEUGER

Wade Merritt, president of the Maine International Trade Center and the state’s director of international trade, predicts a rebound in foreign trade in 2021.

The additional funding will allow MITC to help Maine companies pursue virtual export market development opportunities now and prepare for future growth in the years ahead, he added. That includes participation in foreign trade missions and foreign market sales trips, obtaining services provided by the U.S. Department of Commerce, accessing expertise in designing international marketing campaigns and export trade show exhibits, and participating in training workshops

MITC finds that much of the work it’s done in-person has translated well to the virtual world, Merritt said.

The center has moved its educational seminar series online, allowing companies to access it no matter where they are. Some overseas trade events have also moved online.

“So Maine companies are participating with matchmaking activities and meeting foreign buyers over Zoom,” making the events more accessible and easier to participate in with regard to the time and expense of traveling overseas, he said.

Merritt cited a virtual forest products trade mission with Finland as an example. Before the pandemic, MITC had planned on a mission to Finland in June. The virtual mission included webinars for Maine and Finnish companies to learn about each other and develop contacts.

Directly related to the STEP grant, MITC is seeing considerable interest from companies in improving their web presence, marketing collateral and other virtual capabilities.

“The grant will allow us to help those companies make that shift,” he said.

New trade opportunities

STEP is designed to increase the number of small businesses that export, the value of their exports and the number of small businesses that explore significant new trade opportunities.

Eligible Maine companies may receive up to $20,000 per year in financial reimbursements to cover costs associated with:

• Virtual B2B matchmaking and trade show participation

• Workforce development

• Compliance testing, certification and labeling

• E-commerce and digital marketing

Since the creation of the STEP program 10 years ago, SBA has awarded approximately $157 million in grants to fund export opportunities to increase the footprint of small businesses in countries all over the world.

STEP awards are managed and provided at the local level by state government organizations. The program is managed at the national level by the SBA’s Office of International Trade.

MITC is now accepting applications from eligible Maine companies for STEP financial assistance awards. For more information, click here.