|A GUIDE TO EXPORTING
SOLID WOOD PRODUCTS
USDA EXPORT PROGRAMS
The Foreign Agricultural Service (FAS) administers several programs that promote or assist exporters of U.S. solid wood products. Two of these programs, the Foreign Market Development (FMD) program and Market Access Program (MAP), formerly called the Market Promotion Program (MPP), are conducted via cooperative agreements with the American Forest & Paper Association (AF&PA). The Export Credit Guarantee Program (GSM-102) is available to private U.S. commodity suppliers.
Foreign Market Development Program (FMD)
The goal of the Foreign Market Development Program (FMD), also known as the cooperator program, is to develop, maintain, and expand long-term export markets for U.S. agricultural products.
Created 45 years ago, the program fosters a trade promotion partnership between USDA and U.S. agricultural producers and processors who are represented by nonprofit commodity or trade associations called cooperators. Under this partnership, USDA and the cooperators pool their technical and financial resources to conduct market development activities outside the United States.
Participants in the program include approximately 40 groups representing specific U.S. commodity sectors, including solid wood products. FAS has a cooperative agreement with the American Forest & Paper Association (AF&PA) which has the responsibility for coordinating all of the wood products export market development programs being undertaken with FAS. In turn, AF&PA member trade associations conduct market development activities in cooperation with FAS. Jointly financed export promotional activities include trade servicing, technical training and educational programs, seminars, demonstrations, international trade exhibits, and trade missions to and from the United States. This program is not available to individual companies. More information can be found at http://www.fas.usda.gov/mos/programs/mapprog.html
Market Access Program (MAP)
The Market Access Program (MAP), authorized in 1996, uses funds from USDA's Commodity Credit Corporation (CCC) to help U.S. producers, exporters, and other trade organizations finance promotional activities for U.S. agricultural products. The MAP encourages the development, maintenance, and expansion of commercial export markets for agricultural commodities including solid wood products. Activities financed include consumer promotions, market research, technical assistance, and trade servicing.
Additional information on these programs can be found at and or contact the Forest and Fishery Products Division, 14th & Independence Avenue, S.W., Washington, DC 20250-1047, Tel. (202) 720-0638, Fax (202) 720-8461 or view the FFPD homepage at: http://www.fas.usda.gov/ffpd/fpd.html
Export Credit Guarantee Program (GSM-102)
The Export Credit Guarantee (GSM-102) program, administered by FAS, is designed to facilitate financing for foreign purchases. Credit terms are generally from 180 days or less to 720 days for wood products. With each transaction, the foreign buyer's bank must issue an irrevocable letter of credit covering the port value (f.o.b./f.a.s. value) or, in some cases, cost and freight (c.&f. value) of the commodity exported. The U.S. exporter pays a fee and receives a payment guarantee from the CCC that will cover most of the amount owed to the U.S. bank in case the foreign bank defaults. The fee rate is equivalent to approximately two-fifths of 1 percent per annum on the outstanding coverage if paid semi-annually and one-half of 1 percent if paid annually.
Usually, the exporter will assign any proceeds from the payment guarantee to the U.S. bank financing the export sale. Thus, the foreign buyer may purchase commodities on deferred payment terms, and the exporter may nevertheless receive payment immediately after shipment. The U.S. bank financing the sale is protected by the CCC's guarantee in the event the foreign bank defaults under a letter of credit or related obligation. By transferring the risk of loss from U.S. exporters to the U.S. Government, the program helps to facilitate exports and permits exporters to meet competition from other countries.
The GSM-102 program is intended for cases where credit is necessary to increase or maintain U.S. exports to a foreign market and where private financial institutions would be unwilling to provide financing without the CCC's guarantee. The GSM-102 program is not designed to displace normal commercial transactions that would have occurred in the absence of the program. The program is directed toward countries where the guarantees are necessary to secure financing of the exports and where the destination country has the financial strength to provide a reasonable expectation that foreign exchange will be available to make payments as scheduled. The CCC reviews requests on a case-by-case basis, and any U.S. agricultural commodity whose export furthers the CCC's long-range market development objectives may be considered. For additional information about the GSM-102 program contact: Director, CCC Operations Division, Export Credits, Room 4519-S, FAS/USDA, Washington, DC 20250-1000, Tel. (202) 720-6211.
Emerging Markets Program (EMP)
The Emerging Markets Program (EMP) is authorized by the Food, Agriculture, Conservation, and Trade Act of 1990 (FACT Act), as amended by the Federal Agriculture Improvement and Reform Act of 1996 (FAIR Act). Under the FAIR Act, a program of technical assistance to promote U.S. agricultural exports is authorized for emerging markets in all geographic regions. More information can be found at http://www.fas.usda.gov/excredits/exp-cred-guar.html
Quality Samples Program (QSP)
The Quality Samples Program (QSP) is a pilot program designed to encourage the development and expansion of export markets for U.S. agricultural commodities, under the authority of the Commodity Credit Corporation (CCC) Charter Act, 15 U.S.C. 714c(f). QSP funds are used to assist U.S. entities in providing samples to potential foreign importers to promote a better understanding and appreciation for the high quality of U.S. agricultural commodities. CCC will review all proposals it receives against the evaluation criteria contained in the program announcement and award QSP funds on a competitive basis. More information can be found at http://www.fas.usda.gov/mos/programs/qspfact.html
Section 108 Program
The Section 108 Program provides cost-sharing assistance in the form of foreign currencies to the private sector for the development, maintenance, and expansion of long-term export markets for U.S. agricultural products and agricultural technical assistance in participating countries. The Foreign Agricultural Service (FAS) strategically coordinates the activities approved in this program with those approved in FAS's Unified Export Strategy (UES) Program.
FAS administers the program through cooperative agreements that authorize successful applicants the opportunity to work closely with FAS and its overseas offices to conduct these activities. Preference is given to nonprofit U.S. agricultural and trade groups that represent an entire industry or are nationwide in membership and scope.
The program allows all segments of U.S. agriculture, including those associated with small-volume export commodities, to participate in efforts to build export markets. The overseas promotions focus on generic U.S. commodities, rather than individual brand-name products, and are targeted toward long-term market development. More information can be found at http://www.fas.usda.gov/mos/108/108cover.html
Supplier Credit Export Program (SCGP)
The Commodity Credit Corporation (CCC), U.S. Department of Agriculture, administers export credit guarantee programs for commercial financing of U.S. agricultural exports. The programs encourage exports to buyers in countries where credit is necessary to maintain or increase U.S. sales, but where financing may not be available without CCC guarantees.
Under the Supplier Credit Guarantee Program (SCGP), CCC guarantees a portion of payments due from importers under short-term financing (up to 180 days) that exporters have extended directly to the importers for the purchase of U.S. agricultural commodities and products. These direct credits must be secured by promissory notes signed by the importers. Regulations for this program are found in 7 CFR 1493, Subpart D. More information can be found at http://www.fas.usda.gov/excredits/scgp.html