Hannes Richter

Growing Austrian-U.S. Trade Relations

Hannes Richter

Interview with Christian Kesberg,
Austrian Trade Commissioner in New York

Austrian-U.S. trade has experienced considerable growth within the last years. Christrian Kesberg, Austria’s Trade Commissioner in New  York, explains the reasons for this  favorable development, why Austrian companies locate in the U.S., and in what way his office helps serve the interests of Austrian companies.

Christian Kesberg

AI: After Germany and Italy, the United States of America is Austria’s third most important trading partner worldwide in both imports and exports. What have been the main reasons for this favorable development of Austrian-U.S. trade relations?

The U.S. is a huge and dynamic marketplace and by far the largest import market in the world. Austria has a strong export sector that accounts for almost 60% of the country’s GDP every year and over the last decade has posted growth rates that on average exceeded export growth in all other EU member states. If exporting is a country’s “core business,” then the world’s largest market has to be a “core target.”

Increasing exports by 15%, even with an exchange rate as unfavorable as that in 2006, clearly indicates that trade relations between both countries are mature and stable. About 40% of Austrian exports to the U.S. can be attributed to 20 companies, many of which like Magna, Baxter, Novartis or GM Powertrain are multinationals taking advantage of Austria’s favorable environment for manufacturing and R&D.

Together with well-known domestic players such as Red Bull, Böhler-Uddeholm, Andritz, Schöller-Bleckmann, VA Tech, Blum, Swarovski, Engel or Zumtobel, just to name a few, these companies provide a solid base for U.S.-Austrian business relations. The bulk of the volume, however, is generated by hundreds of smaller long-established niche operators and much of the growth can be attributed to the many newcomers entering the U.S. market every year.

They are attracted by America’s economic dynamism and also by favorable developments in key markets. Consumer trends toward organic and gourmet products in a huge food and beverage sector favor market entry for Austrian specialty food manufacturers. Deficiencies in renewable energy, which are now recognized in the political arena, create opportunities for Austrian providers of technologically advanced solutions in such fields as biomass or solar energy.

Intense global competition in the car industry shakes up established sourcing channels and opens doors for innovative second-tier suppliers from Austria. The booming IT and communications market offers lucrative opportunities for niche products and high-tech solutions from Austria. In addition, heightened environmental consciousness in the U.S. has created new and very exciting market segments for Austria’s advanced environmental technology industries.

AI: Being the official representative of the Austrian business community in the U.S., how do you fulfill your mission of serving the companies’ interests? Could you give an overview of your office’s main activities and services?

The Austrian Federal Economic Chamber presently operates five service centers in the U.S.. We have trade commissions in New York, Los Angeles and Chicago, as well as smaller offices in Washington, D.C. and Atlanta. Our 25 employees provide business intelligence, contacts and coaching services to Austrian companies active in the international market.

Until about a decade ago, our focus was on export promotion, but in response to globalization, we have gradually expanded our service portfolio. Providing market intelligence and identifying suitable partners for exporters will, of course, remain our primary activity, but sourcing, financing, supporting research cooperation and technology transfer, offering assistance in the establishment of subsidiaries as well as providing legal and tax advice to established operators has grown in importance over the years.

Simply said: we will do anything that it takes to help an Austrian company do whatever business they choose in the U.S. Of course, our resources and capabilities have limitations, and we may not always be able to provide the end solution and result, but we are continuously strengthening and maintaining our network of consultants, lawyers, accountants, industry experts and information providers that are “safe havens” in a transparent, but often also very confusing market where too much choice is the true challenge.

AI: What are the reasons why Austrian companies locate in the U.S.? And what are the problems they face when locating in this country?

Austria, with its sound reputation for high-quality living, engineering know-how and advanced technological solutions, has a product portfolio well-suited for making substantial inroads in the vast U.S. market. Opportunities, however, never come without risks and challenges.

Market size, fragmentation into regional and local submarkets and high market saturation in most segments require extensive and multi-layered distribution systems that have to be monitored, managed and supported. As this cannot be done from abroad, not even at an early stage of market development, setting up your own subsidiary is often the only reasonable market entry strategy.

The need to invest before you can actually make money is also a major obstacle for Austrian companies - most of which are small or medium-sized enterprises with thin capitalization.

Dr. Christian Kesberg, Austrian Trade Commissioner in New York since September 2006, served from 2002 to August 2006 as Deputy Director-General of Austrian Trade. As Chief Operating Officer, he was in charge of the organization’s 106 field offices and the regional desks at headquarters. In this role, Mr. Kesberg was also deeply involved in the transformation of Austrian Trade from a traditional export promotion organization into a modern service provider.

From 1995 to 2002, Christian Kesberg was Austrian Trade Commissioner in South Korea. Prior to this post, he served as Deputy Trade Commissioner in Tokyo, Los Angeles and Kuwait.

Austrian Trade Commission New York
120 West 45th Street, 9th Floor
New York, NY 10036
Telephone: +1(212)421-5250
Telefax: Fax +1(212)421-5251
E-Mail: newyork@austriantrade.org