A key to expanding any business is finding more customers. Right now our country could expand access to customers in countries that represent two-thirds of the global economy. This expanded access would not only help large corporations, but it would also be particularly beneficial for the small businesses that drive our nation’s job growth.
I’ve worked with many small and medium-sized businesses over my career, and I also co-own a small export management business. So I know firsthand that, although these businesses are smaller in staff and budget than the larger corporations that usually dominate headlines, small businesses are powerful. They are often the source of technological innovations and new and exciting business models. And they are the biggest generator of jobs. More than half of U.S. workers either own or work for a small business, and in recent decades, small businesses have generated almost two-thirds of the nation's new jobs.
While exporting creates numerous benefits, few small businesses are actually doing it. Right now, only a small fraction – just 5 percent – of the over six million small- and medium-sized businesses in the United States are exporting, even though 95 percent of the world’s customers are waiting outside our borders. That’s because many small businesses find it is too difficult and costly to export. For one, having fewer employees means they don’t have staff solely dedicated to exploring and managing foreign markets the way larger companies do. They don’t have staff to figure out the best international distributors and suppliers. And they don’t have staff to keep the company up to date on constantly changing regulations – information that is essential to accessing new markets. Most other countries currently have different standards and tariffs that can make trading with them very expensive and time consuming.
That’s why I co-own a business, Cange International, dedicated to helping companies sell their products abroad. From my experience I’ve seen how international trade can be hugely beneficial for small businesses.
Fortunately, current trade agreements under consideration, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, could be a big help to small businesses’ exporting efforts.
These trade agreements with countries in the Asia Pacific and the European Union— countries that make up two thirds of the world’s economy—will level the playing field for all involved. In other words, everyone would be operating under the same safety, environmental and labor standards and regulations. This stability would be significantly helpful to small businesses in particular.
Under new trade agreements it will be faster, cheaper and easier for small businesses to access new markets. This means that businesses can expand their customer base, increase their profits and employ more workers. Accessing new markets faster will encourage innovation, America’s trademark.
But before we can enact these agreements, Congress needs to first pass Trade Promotion Authority (TPA). This recently introduced legislation is an agreement between Congress and the President that allows our trade negotiators to come back with the best deals possible. It's vital for the passage of trade agreements - only one in the past forty years has been passed without the help of TPA. This authorization is the key to unlocking the potential for small businesses that are missing out on growth opportunities. It will increase their competitiveness and ensure that America maintains its leadership in the global economy.
It’s time to unleash the power of small businesses by helping them reach new markets. Giving them this boost to grow their businesses abroad will boost our economy here at home.
Benson is the vice president of Cange International, an export management company and international business consultancy in San Diego, Calif.