Newspaper article The Christian Science Monitor

US Missing Trade Opportunities in Central and Eastern Europe

Newspaper article The Christian Science Monitor

US Missing Trade Opportunities in Central and Eastern Europe

Article excerpt

DESPITE the national call for stronger competitiveness, United States policymakers are offering ambivalent support for American firms that need money and guidance to reach overseas markets.

Overshadowed by Europe's historical ties and proximity to Central and East Europe, American businesses are shrinking from promising trade and financial opportunities there.

Witness Uncle Sam's help in making Polish bagels and Hungarian cellular phones while Germany offers Prague a crucial chance to reduce its dependence on Russian energy with a Czechoslovak pipeline to German oil terminals.

A host of US government agencies help finance US projects and exports to the former communist countries. But the pace is slow, reflecting conflicting US government priorities, inadequate investment capital, and persistent US uncertainties about these new markets.

One government organization, the Overseas Private Investment Corporation (OPIC), issues political-risk insurance and financing for US companies investing in the developing world. In 1989, Secretary of State James Baker III waived the prohibition against allowing the federal agency to insure investments in "countries subject to the international communist conspiracy."

Today a vast new market is open for OPIC President Fred Zeder, who was at the White House on March 9 promoting OPIC's Eastern European work. Its accomplishments include a bagel bakery in Poland, as well as scores of other regional investments, such as food-processing plants, banks, a hotel, and Burger King restaurants. But the funds fall short of what is needed.

"For our worldwide operations, Congress authorizes $350 million per annum, but we have requests from US firms with projects for Eastern Europe three times that amount," Mr. Zeder told the Monitor.

The Bush administration recommends a higher ceiling for OPIC's annual budget, with an eye toward Eastern Europe and the former Soviet Union. But the lack of commitment from Congress has prevented OPIC from authorizing any additional capital, says Zeder. Corporate giants silent

Small and medium-sized businesses, not America's ailing corporate giants, have been the important contributors to economic growth in the past year. And some 30 percent of the companies filing for OPIC assistance are small firms, first-timers in international finance and trade. In 1991, OPIC financed deals that produced $2 billion in exports and created 40,000 jobs, Zeder says.

But, Bush administration officials lament privately, there is no concerted government policy that accompanies the rhetoric about "creating American jobs" and the constant reminders that US exports are essential to spur the nation's economic recovery. …

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