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The advantages of exporting are clear. Increased exports greatly benefit a country's economy because they create jobs, spur growth economic, provide tax revenue, and enable domestic industries to compete in international markets. Firms that export can grow faster because can use the idle capacity, reduce dependence on domestic markets, increased product life cycles, and simply earn more money. Previously, companies Americans, the U.S. market large internal usually provide ample opportunities to grow and remain profitable. Now, domestic market saturation and increasing competition international taking their toll, leaving U.S. companies with tighter margins and little room for growth. This forces many companies to look to international markets for new opportunities. The U.S. government has recognized the importance of exports increased for the overall health of our economy and create an important infrastructure of export assistance programs to help U.S. companies to export successfully. One of the highlights of these efforts is the export Trading Company Act of 1982 ( "ETC Act"). The ETC Act was modeled after the large and powerful Japanese trading intermediaries called Shogo Shosha. These intermediaries helped Japan become one of the major exporting countries of the world, achieving a trade of $ 58 billion surplus with the States USA. While the use of Japanese trading companies as a model, the ETC Act was designed to eliminate two major obstacles that prevent small and medium Success-sized companies developing overseas markets. By creating exceptions in U.S. antitrust laws and banking, the ETC Act created significant opportunities for small and medium businesses to cooperate in their efforts to exploit international markets.

Antitrust immunity

Small and medium-sized exporters do not have the resources to create separate export departments and often necessary to cooperate with competitors, putting pool resources or creating joint ventures. Before the adoption of the ETC Act, these cooperative activities created serious risks of competition as the U.S. antitrust laws prohibit competitors from sharing information and discussing prices. The threat of antitrust litigation, one of the most costly, often prevented U.S. companies development of joint export programs backed by adequate resources.

The ETC Act eliminated this uncertainty by the introduction of a certificate of review program. The program, administered by the Commerce and Justice departments, offers exporters of immunity from government federal and state antitrust prosecution for export activities specified in the Certificate. Although the certificate does not prevent private parties to bring suits defense competition against a certificate holder which provides significant procedural advantages, including a minor limitation. The certificate holder enjoys a presumption legality and can collect attorney's fees of an antitrust plaintiff unsuccessfully. If the plaintiff private antitrust prevails in its lawsuit against the certificate holder, you can obtain only actual damages, not treble damages (three times actual damages), available in most antitrust cases. The Commerce Department requesting the certificate from a study of "insurance policy" against dubious and frivolous suits.

Bank Holding Company participation the U.S. banking system, one of the most sophisticated in the world, has developed considerable experience and a wealth of resources in international trade. Allow U.S. exporters to benefit from this knowledge base and experience, Title II of the ETC Act authorizes bank holding companies ( "BHCs") to make capital investments in companies with export trading (ETCompanies "). To ensure adequate separation between the export trade BHCs' and deposit taking functions, the ETC Act allows BHCs to invest in ETCompanies that meet the legal definition and comply with additional rules issued by the Federal Reserve Board. Equity ownership by BHCs not only provides seed capital or infusion of cash to allow ETCompanies to take off, but offers other advantages important. As mentioned earlier, BHCs can act as an invaluable source of knowledge of international trade. Additionally, many BHCs have branches in several countries and can help in locating ETCompanies foreign distributors and buyers. The Role of Trade Associations

Professional associations can play an important role in the formation of ETCompanies. The broad membership of associations provides an effective mechanism for the creation of large trading houses. Each of these members of the export service companies, bank holding companies, law firms, accounting and consulting firms-can contribute their expertise and experience to form a ETCompany to resist the fierce international competition and succeed in foreign markets.

A number of trade associations have already taken advantage of the ETC Act to secure antitrust immunity for its members. In 2003, the Virginia Association of Apple Growers obtained review certificates of its members, who were VAGA joint venture for exporting U.S. grown apples to foreign markets. During the first year of operation, VAGA generated export sales of over $ 600,000. Other organizations are starting to notice the benefits of the ETC Act and form consortia to explore actively how its members can benefit from the law.

Because U.S. firms have remained largely aware of the advantages of the ETC Act, that have not used their full potential. However, favorable exchange rates, the growing interest in export and the growing awareness of benefits ETC Act are likely to favor the formation of many more successful exporting companies export goods and services in the U.S. to foreign markets.

About the Author:

John Bekian is an associate in the New York office of Berg & Duffy, LLP , which
focuses on
international
business transactions
and international litigation. ©
2005 John Bekian

Article Source: ArticlesBase.com – Is Your Business Benefiting From The Export Trading Company Act
Of 1982?