By Rep. Sam Graves (R-Mo.) - 07/10/13 11:03 PM EDT
The United States is trading internationally now more than ever, but only 1 percent of small businesses are part of this growth. That’s a number we can and should change, and the House Small Business Committee has ideas to help small firms take the next step.
Over the last four years, despite economic sluggishness, U.S. exports increased by more than $630 billion. To put that in perspective, we saw that same amount in total American exports just 20 years ago. Each year, American companies do more business abroad, and it makes sense, considering 95 percent of the world’s market is outside the U.S.
Expanding into world markets is a big commitment for small firms with limited resources. A National Small Business Association study found that nearly 50 percent of small-business exporters spend at least a few months preparing to export, and spend an average of 8.4 percent of that year’s operating revenue on those preparations. That is cause for great concern for small businesses, but there are ways to make the path easier. Washington can do more to streamline the export process and provide better coordination among the federal export promotion agencies.
The Small Business Committee recently invited small firms to testify at a hearing on trade in Washington, D.C. It was a timely hearing, as the U.S. launches trade talks with the European Union and as newly confirmed United States Trade Representative Michael Froman begins representing U.S. trade interests abroad.
These small-business leaders provided some recommendations for Washington, and specifically for the new U.S. Trade Representative, on how the federal government can help small businesses like theirs boost exports.
“In entering into new trade agreements, and reviewing old agreements, a focus needs to be made on removing non-tariff barriers to trade with specific focus on ‘regulatory cohesion’ and ‘standards harmonization,’ ” said Brooke Fishback, international sales manager of Massachusetts’s Health Enterprises Inc. “Our philosophy should be that if it is legally sold in the U.S., then it should be legally sold in FTA partner countries, without the need for costly and/or time-consuming re-registration with local authorities.”
The hearing focused on four policy initiatives: the reauthorization of the Trade Promotion Authority (TPA), the Transatlantic Trade and Investment Partnership (TTIP), the Trans-Pacific Partnership (TPP) and the ongoing World Trade Organization negotiations regarding services and information technology.
Each of the initiatives aims to reduce tariff and non-tariff barriers, enhance transparency, remove discriminatory practices, strengthen intellectual property and settle trade disputes through consultation and tariff remedies. Witnesses emphasized the need for free-trade agreements that include opening markets for small businesses.
“A comprehensive plan on TTIP and a comprehensive plan on TPP is also, I think, one of the most critical recommendations we would give going forward,” said Pamela Johnson, president of the National Corn Growers Association, in Iowa. “It has to be a comprehensive package, we cannot leave certain things out to negotiate later because it will come back to really hurt Agriculture [exports].”
“The more free-trade agreements, the better from my perspective for small business,” said Fishback, who then noted that it didn’t help to encourage small businesses when “the president came out with his ‘Doing Business in Africa Campaign’ last year, but didn’t back it up with any support for small businesses.”
The witnesses stressed the need for practical support and assistance to small businesses, including a framework to guide them through the process of getting started so they can compete in the global market.
To help address this, I introduced the Export Coordination Act to assist small businesses in navigating the process with greater ease. This legislation will establish stronger congressional oversight and coordination of the federal export promotion agencies. Currently there are more than 20 federal agencies that are part of the many steps in the export process. Understandably, many small businesses simply do not know where to go.
This bill directs the various trade agencies to simplify and coordinate the export process so that a small business can navigate the export process, from start to finish, much easier.
Through these measures, we can help small businesses break through barriers and give them a roadmap on how to enter the global economy and thrive. The more small businesses that are exporting and growing, the more jobs they create here in America.
Graves has represented Missouri’s 6th Congressional District in the House of Representatives since 2001. He sits on the Transportation and Infrastructure Committee and is chairman of the Small Business Committee.