YSU International Trade Center Promotes Exports

YOUNGSTOWN, Ohio — No longer is international business dominated by cities such as New York, Zurich, Chicago, London, Hong Kong or Tokyo.

Joining or increasing their participation in international business are Newton Falls, Girard, Goshen Township, Ashtabula and Youngstown – along with hundreds of other small towns and cities like them – where manufacturers look to find markets for their products and at the same time attract new international investment.

Indeed, northeastern Ohio is emerging as an important conduit to the world, says Mousa Kassis, international trade adviser at the International Trade Assistance Center at Youngstown State University. The center is a component of the Ohio Small Business Development Center.

Nearly $105 million worth of goods and services were exported last year from companies in Mahoning, Trumbull, Columbiana and Ashtabula counties, Kassis reports. “We’re working with metal-forming companies, steel companies, plastics, machinery manufacturers, electronics, auto-parts suppliers,” he says. “And, we’ve just started to work with some food companies.”

The international market for products manufactured in this region of northeastern Ohio and western Pennsylvania is growing at a rapid pace, according to Kassis. In the four-county region alone, 17% of all sales last year came through exports, well above the 12% national average. “We have in this area companies of which there are very few like them in the world,” he says. “And they’re our clients.”

Kassis, an adjunct professor of economics 16 years at the university, has worked in international trade throughout his professional life. He says International Trade Assistance Center helps companies with the preparations they need to sell abroad.

“We provide a huge amount of research, some of it is highly technical,” Kassis says. Compliance manuals, cultural research, economic studies, interpreting tax structures and tariff policies – all are part of a comprehensive service the center provides companies that want to break into the global market. “These reports on their own would cost thousands of dollars,” he says. “We provide them for free.”

The center works with 70 companies that represent a range of businesses and services throughout the region, Kassis notes.

Todd Olson, president of BOC Water Hydraulics in Goshen Township, says the center has proven invaluable to his company’s entry into the world market. “Without them, you wouldn’t know where to begin,” he says. “We don’t have the money to spend on consultants.”

BOC manufactures high-end water hydraulic systems for the maritime industry, directional valves, descale systems, power units and pumps. Over the last five years, Olson’s company has found success in marketing and selling its products in Mexico, Brazil, Chile, Colombia, Australia, India and Indonesia.

“Working with Mousa [Kassis] and his contacts with the State and Commerce departments allows us to explore the potential for business expansion overseas,” Olson says. “You need these professional resources.”

This year, the U.S. Small Business Administration awarded the Ohio Small Business Development Center network $700,000 to fund the Image program, Kassis says. Image reimburses Ohio companies half their expense, up to $10,000, for international marketing and administration.  “It could be used to offset trade missions, printing material, translation of websites, international trade shows. Image would pay for a lot of that,” he adds.

More and more, companies in the region are taking note of opportunities through international trade, Kassis says. For example, more than $43.5 million worth of products were shipped abroad from Mahoning County alone last year, while $37.8 million were shipped from Trumbull County. Another $22.6 million in goods and services originated from Columbiana County.

The majority of Kassis’ 70 clients are manufacturers and exporters, although some use the center to coordinate imported products they modify through value-added processes before redistributing them.

“Mexico and Canada are the most popular trading partners,” Kassis says of the local market. However, Germany, Brazil, the United Kingdom, Australia, China and Thailand are favorite destinations for products made here.

Most companies use over-the-road trucks to haul their products to ports on the East Coast where they are shipped to overseas markets, Kassis says. The second-most popular form of transportation is rail, while a third option that could prove attractive to local companies are water assets such as the Ohio River and the Great Lakes. “We’re trying to introduce our exporters to waterways through the Columbiana County Port Authority and the Cleveland Port Authority,” he says.

The Cleveland Port Authority, for example, has a partnership with a shipping line that feeds directly into Rotterdam via the St. Lawrence Seaway. “Instead of trucking your product all the way to the East Coast, you can truck it to Cleveland as your port of departure,” he notes.

As American companies seek additional export markets, some firms that have maintained production operations overseas have found it more efficient and cost-effective to “re-shore” a portion of their manufacturing processes back to Ohio, Kassis says.

“I have eight companies doing that now,” he says. One reason manufacturers are returning to the United States is that the cost of labor in many foreign countries – especially China – has steadily increased over the last six years.

“Since 2009, wages have risen in China 14.6% annually, compared to a 2.4% increase annually in the U.S. during the same period,” he says.  While the average American wage is still eight times higher than China’s, production costs here have declined as a result of automation and technology, offsetting part of the wage imbalance. Plus, this region has a skilled labor force, a proximity to large markets, and low-cost energy services. Collectively, these factors allow manufacturing operations to remain competitive in the world market, he says.

Meanwhile, the International Trade Assistance Center has partnered with the Youngstown Warren Regional Chamber in an export push that has broadened to 10 counties, four in Ohio and six in western Pennsylvania.  “Hopefully, next year, we’ll have a plan for next steps,” says Sarah Boyarko, the chamber vice president of economic development.

Surveys were sent to companies that operate from Mahoning, Trumbull, Columbiana and Ashtabula counties in Ohio and Erie, Crawford, Mercer, Lawrence, Beaver and Butler counties in Pennsylvania, Boyarko says. “Between 100 and 120 surveys have been completed,” she relates. “It will help us to create a plan of action and work directly with them, to help them overcome challenges, get into new markets, and help those who aren’t exporting to export their products.”

These counties combined rack up more than $10 billion in annual export sales, Kassis reports. “It makes sense to develop synergies to develop global exports,” he says.

The effort, known as the OH-PA Stateline Export Initiative, would help companies in the region realize their market potential by identifying potential trade partners, developing a comprehensive international supply chain, and presenting opportunities to build long-term global relationships through trade shows, trade missions and other forms of support.

In August, the chamber hosted a delegation from Cuba so local companies could explore the exporting opportunities to that country as its relations with the United States improve. U.S. Rep. Tim Ryan D-13 Ohio, and state Rep. Sean O’Brien, D-63 Bazetta, visited Cuba this month to ascertain what mutual benefits can be gleaned as a result.

Kassis says Cuba is an extremely important market that local companies should pay attention to. “Cuba is a doorway to 600 million people living in Latin America,” he says. The U.S. boycott against Cuba had stirred up animosity in most of the Latin world against American business, so improved trade relations with that country would in turn pave the way for growth in additional Central American markets.

“We export to Canada, which has 30 million people,” Kassis says. “Latin America has 600 million. Why aren’t we focused on this? It doesn’t make sense.”

The emerging market that Kassis sees as the real prize is Africa.

“It’s going to be a huge market,” Kassis says, one that at the moment is slipping through the fingers of the United States. “The attention to Africa is disappointing from Ohio and the country. Last year, Ohio exported $52 billion worth of goods and less than 1% went to Africa.”

China and Japan are aggressively pursuing this market, and Kassis is perplexed why the United States isn’t moving forward with similar initiatives.

For example, trade with countries such as Tanzania and Kenya have the potential to unlock access to a market of 300 million people, Kassis adds. “The problem is that we treat Africa as one nation,” he says. “Africa is made up of 54 countries. Seven of the top-10 countries in terms of GDP percentage growth are in Africa. “

Pictured: Mousa Kassis, international trade adviser at the International Trade Assistance Center at Youngstown State University.

Copyright 2022 The Business Journal, Youngstown, Ohio.