International trade: Big business for small businesses

Believe it or not, across Indiana, international trade is a big business for small- to medium-sized businesses (SMEs). Indeed, of the more than 8,000 Indiana businesses who exported goods or services to consumers around the world last year, 85 percent of them are small(ish) and locally-owned, not large corporations with household names that most assume benefit from international trade.

For over three and a half decades, I have worked with businesses of all sizes desperate to expand their reach from Indiana to the entire world, as an SME-leader and free trade agreement advocate since NAFTA. It’s an exciting challenge and our state and federal governments offer many wonderful programs to help businesses get off the ground.

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Thanks to the efforts of the Indiana Department of Commerce, the U.S. Department of Commerce, of which I am its Indiana District Export Council Vice Chairman, more companies are going global than ever before.

Yet no program is more effective at establishing deeper ties with rapidly expanding economies than new free trade agreements. I fear that America’s current attitudes toward trade will set our small and medium businesses back—ceding ground on the global stage to massive corporations and their armies of trade lawyers and lobbyists.

Without trade agreements that ensure fair treatment and easy access to the fastest growing markets in the world—like those in the Asia Pacific region—American small businesses risk falling behind the pace at the worst possible time. Here’s why:

Right now, 95 percent of consumers and four out of five dollars of consumer spending live outside of the United States. This includes the nearly 2 billion people in the Asia-Pacific region, hundreds of millions of which will be entering the middle class in the coming years and decades.

This economic transformation represents real opportunity for SMEs to become go-to suppliers of the consumer goods, services, and other products a growing middle class will come to depend on. While “Made in America” is the global equivalent of the Good Housekeeping seal of approval, American exports depend on trade agreements to be truly competitive.

For decades, Indiana has been winning the global economy—largely thanks to international trade. More than one in four jobs in Indiana—800,000 or so positions—depend on trade. In fact, the trade-related workforce in Indiana has doubled since 1992, when the original NAFTA agreement took effect.

In turn, nearly 1 million Hoosiers generate almost $47 billion of goods and services exported to consumers around the world, good enough for Indiana to rank as the 15th largest exporter in America. Much of the growth has come in just the last decade, with exports spiking by more than half thanks to our signature industries: agriculture, manufacturing and pharmaceuticals.

To remain on the leading edge, Indiana businesses of all sizes need access to new markets and new consumers--globally.

Walking away from the table on trade negotiations or threatening tariffs that will invite retaliation leaves the United States powerless to stop the implementation of new barriers—tariff lines, regulatory restrictions or import quotas—that will hamstring American businesses in some of the hottest markets in the world.

Instead—now is the time to double down and negotiate deals on our terms that work for American businesses, American workers and the American economy. As House Ways and Means Chairman Committee Kevin BradyKevin Patrick BradyPelosi not invited by Trump to White House coronavirus relief bill's signing Democrat refuses to yield House floor, underscoring tensions on coronavirus vote Democratic leaders say trillion stimulus will pass House on Friday MORE (R-Texas) says, “Trade is our last economic freedom.”

Thankfully, leaders like Sen. Todd YoungTodd Christopher YoungRand Paul's coronavirus diagnosis sends shockwaves through Senate GOP lukewarm on talk of airline bailout Trump, GOP scramble to keep economy from derailing MORE (R-Ind.) are already ringing the alarm on this issue. In February, he and 24 of his Senate colleagues sent a letter to President TrumpDonald John TrumpCuomo grilled by brother about running for president: 'No. no' Maxine Waters unleashes over Trump COVID-19 response: 'Stop congratulating yourself! You're a failure' Meadows resigns from Congress, heads to White House MORE urging him to reconsider his decision to walk away from the Trans Pacific Partnership.

They are right—America must have a voice in the Asia Pacific region and should be striving to forge new economic alliances with its emerging middle class.

While I am optimistic their advice is starting to stick, this much is clear: to continue their unprecedented success, Indiana businesses must think globally.

Dr. Toby Malichi is the Founding Chief Executive Officer & Global Business Diplomat of Malichi Group Worldwide and the U.S. Department of Commerce - Indiana District Export Council, Vice Chairman.