A BRITISH VIEW OF AMERICANS AS EXPORTERS

Roger Prestwich comes up against American attitudes on foreign trade every day. A British native who is education director at the Minnesota Trade Office, Prestwich says "So many companies think that they're so busy, that the U.S. domestic market is all they need, and they don't even go through the process of determining whether to export." That's something he hopes to change. It's a task, he says, that will demand more than good bank financing or even a good product. It will require changing the way American companies -- especially smaller ones -- perceive themselves. Their "view of the world was turned inward for so long...and there is a business mentality that grew out of that," he says. Business Week Online's Dennis Berman spoke to Prestwich about small-business trade issues. This an an edited transcript of their conversation.

Q. What's the hardest thing about educating people on foreign trade?

A. There is a level of frustration, actually. Only one out of three companies that have the potential to be exporting is actively involved in the process. The other two have the products or services in demand in countries around the world -- of that group, half maybe are not interested or say they are not ready. So what we're trying to do is generate the interest in the companies that have the potential, to seriously consider overseas markets as a part of their strategic business plan. The argument we put forward: As long as you've done your homework, examined your internal capabilities, and know where you want to go in 5 or 10 years, then there is no reason not to consider it. So many companies think that they're so busy and think the U.S. domestic market is all they need, and don't even go through the process of determining whether to export.

Q. Specifically, how do you educate these companies?

A. We'll do programs anywhere in the state. We're trying to get in front of companies, so we'll come to any location and put on a program...And then we'll put on a three-day training program, and that program goes through from A to Z what you need to know in order to make a rational business decision.

Know, too, that you have to be serious about this whole process. You have to have commitment from the top of your company -- who will determine the financial and human resources to throw at this problem. This is more of a patient, slow-building process.

Q. Learning a foreign language always helps you understand new things about your native tongue. Does the same apply to foreign trade? In other words, how much can you apply domestically what you learn abroad?

A. I can tell you a story about this. We had a company in northern Minnesota that makes pumps primarily for liquid mixes in food manufacturing. They went over to Europe and found that other pumps were technologically more advanced, or different, in order to meet the demands of European manufacturers. So they modified their pump to meet those demands, and now that particular design is the top-seller for the American market. So the technical adaptation to meet the needs of a foreign client has benefited their U.S. market prospects. That change would not have happened by meeting only domestic demand.

Q. How receptive are companies to making product changes such as this?

A. There is a learning process here, which brings me back to one of the frustrations that we do have. We have companies that really don't quite see the need to make all these changes for foreign markets. They say, 'what is the problem with these people, they don't understand what they need.' And we have to tell them: 'When you go into a store as a customer, don't you believe the customer is always right?' A manufacturer should provide you with the products you need and want, whether they're made for foreign consumers or not.

And for people who say, 'they're putting up trade barriers,' I ask them to consider whether the foreign country's own companies have to meet those particular standards. If not, it's not a trade barrier -- only if they say that all the importers have to meet the standards but the local guys don't.

Q. What can American companies learn from Europe's current program of economic standardization?

A. The trade barriers that do exist [between the U.S. and Europe] are based partly on different sets of environmental and engineering standards. When we have an agreement on how these standards are going to be adopted, we'll have better cooperation. That's the same principle that the 15 European countries used in the first place.

And from the U.S. standpoint, yes, there are problems, and expenses. And often the standards are simple, but the directives implementing them are not. That has caused some problems that are rather strange from a technical standpoint...because the issue relates to politics beyond economics. Once you move into the political issues, if you haven't sorted out the problems before hand, you're going to have some real problems.

Q. What are some of the other effects of different national standards, say, on product safety or packaging?

A. There is a fireplace manufacturer that has been trying to get fireplaces into Japan for four years. Every time they send over a fireplace to pass inspection, they have to send it back to bring it up to the safety code. That has created a product far safer than the one on the U.S. market. So let's say you meet the requirements for the European market -- your product is safe enough to be sold there, and then someone injures themselves on your machine. And then a lawyer finds out that the export version is a safer piece of equipment than the domestic version. Can you hear the question in court? "Why is the life and limb of a European more important than that of the American consumer?" Try to wiggle your way out of that one.

Q. As a foreigner, what's your perspective on the American business psyche?

A. I'm not even sure how many companies necessarily realize that on the world market, American products are held in pretty high esteem. That's mainly because of the multinationals. They've been on the global market for a long time.

Further, I think that when de Tocqueville analyzed the American settlers, he found that they had turned their backs on their homelands and were carving out the new world in this wilderness...And once they headed West, that's where the new American character began to develop. The school system was built on the basis of developing the new American who was not hankering for the old country. It was almost as if with the first World War, the U.S. dipped its toe in the water with the Europeans and got burned a little in the process. The view of the world was turned inward for so long...and there is a business mentality that grew out of that.

What is it that makes Americans tick? Individualism and making yourself. And you don't want handouts. Also, if things don't work out, you can pack your bags and move on. There aren't that many places where you find that, and that affects everything from negotiating skills, even issues related to bribery and corruption. We find also with a lot of American companies that they don't have a particularly good sense of history, they don't appreciate the fact that we have learned an American culture.

Without that, you're only halfway to understanding what it's like doing business with another country, that you have learned your own culture and that it's unique... That's where we have problems. There is an arrogance, or American superiority that is certainly there. And yea, it's true, the U.S. is No. 1 economically and militarily, but we have to recognize that there are a lot of people who don't want to move here and don't like the whole U.S. style.

Q. You mentioned bribery before. What can small businesses expect of the new OECD [Organization for Economic Cooperation & Development] accord that promises to remove bribery from the course of legal business?

A. Small business shouldn't doubt for a minute that this is going on all the time. Part of your market research is determining whether bribery is a part of doing business in a foreign country. It may be as simple as your distributor saying about an invoice for $200,00: "Put the commercial value of this invoice at $120,000, so you won't have to pay as much in import duties." There should be a red flag going up somewhere. You've just attempted to defraud a foreign government of its legitimate tax income.