U.S. to Sponsor Irvine Seminar on Export Act of ’82

When California’s raisin and prune growers combined efforts this year to sell dried fruit to Pacific Rim countries, the resulting export trading company--despite its monopoly--was exempted from antitrust laws.

The 1982 federal law that enabled the growers to team up can be used by most small and medium businesses to form what otherwise would be unlawful cartels. It is permitted as long as the purpose is to export goods and services to foreign countries.

But so little-used and little-understood is the Export Trading Company Act of 1982 that the federal government is launching a round of regional seminars to promote it and a number of subsequent laws aimed at encouraging businesses to ply their wares overseas as well as at home.

The only West Coast session will be held in Irvine on May 1.

“People don’t think of Orange County as being an export center, but more and more new companies are being formed, especially biotech and medical supply companies, and other countries want their products,” said James V. Lacy, director of the U.S. Office of Export Trading Company Affairs.

Lacy’s office, part of the U.S. Department of Commerce, has completed four of eight one-day seminars across the nation to encourage businesses to try foreign markets.

Biggest Audience Expected

The seminar at the Irvine Marriott Hotel, co-sponsored by the Commerce Department, the Irvine Chamber of Commerce and Consolidated Savings Bank in Irvine, will probably draw the biggest audience, said Lacy.

In 1983, after Lacy’s office began operations, thousands of businessmen showed up at more than two dozen seminars nationwide to learn about the Export Trading Company Act. But while about 5,000 firms and individuals are now exporting products and services, few have used the 4-year-old law to join with their competitors in concerted action to compete with foreign cartels on foreign soil.

To date, there have been only 80 applications for the antitrust immunity for export activities. The federal government so far has approved formation of 62 export trading companies involving 259 firms and individuals nationwide.

Among them are groups that sell frozen bull semen to European cattle breeders, liquor and tobacco to Mexican importers and wood chips to the Scandinavian countries for use as a heating fuel.

Ottavio A. Angotti, chairman and chief executive officer of Consolidated Savings Bank, said more than 300 Orange County companies could probably export their goods and services.

The ETC Act is the primary tool in the government’s effort to eliminate laws that discourage foreign trade. Besides providing antitrust immunity for exporters, the measure allows the Federal Reserve Board to ease restrictions on banks to allow them to provide trade finance, to act as brokers or agents for exporters and to take title of goods in the United States for export.

So far, 40 bank export trading companies--involving 42 banks--have been approved by the FRB and have provided $85 million in financing for export operations, the Commerce Department said.

“We’re encouraging joint ventures and concerted activities among competitors so that the economies of scale will make goods more competitive overseas,” Lacy said. “We’re also encouraging those who are exporting to do it more effectively. Some companies might not want to get another domestic party to join with them (permanently), but they may want a certificate for individual contracts that might otherwise violate antitrust laws.”