Though small businesses make up 97 percent of America's exporters, they generate only 30 percent of national revenues from products sold overseas. The House Small Business Committee today pressed the Office of the U.S. Trade Representative [USTR] on their failure to have staff dedicated to ensuring that the needs of small firms are accounted for in trade practices, and examined current strategies to assist entrepreneurs with finding prospects in international markets.
"Small businesses have shown that they are eager and able to compete around the world," said Chairwoman Nydia M. Velázquez. "It only makes sense that there would be USTR officials dedicated to representing their interests.
"Despite the need for this representation, we heard today that out of the 22 assistant USTRs, not one is charged with aiding entrepreneurs. This is simply unacceptable in today's global marketplace, where small businesses play such a dominant role."
Though small firms have demonstrated interest and achieved success in the international arena, the unique challenges they face have slowed their expansion. For small businesses, conducting foreign transactions may prove to be expensive, thus limiting their ability to reach new customers and grow. Entrepreneurs also use a disproportionate amount of their resources navigating complex customs requirements, as well as complying with local, state, and federal laws.
Recent agreements have not included industries dominated by small business. They have also failed to stop unfair trade practices -- such as dumping and intellectual property theft -- that harm entrepreneurs. These actions are limiting small businesses' opportunities to benefit from trade, making it more difficult for them to compete domestically and internationally.
"Global opportunities are critical to many small business owners, who rely on trade to expand their ventures and continue innovating," Velázquez said. "Current trade measures have not created an environment that is conducive to entrepreneurial success."
Expansion into new markets has the potential to boost revenues -- improving small firms' overall ability to create jobs and contribute to domestic economic growth. Steps must, therefore, be taken to ensure they are an integral part of trade policies.
At today's hearing, witnesses outlined a small business-oriented trade strategy -- including international commitments that provide more transparent and less expensive regulations. Additionally, harmonizing and simplifying customs requirements would allow small businesses to easily export to multiple countries, giving them access to more customers in return for their investment.
Trade promotion programs that focus specifically on small firms -- such as the financing program at the Export-Import Bank -- can play an important role in maintaining small companies' competitiveness. These changes will increase domestic profits from exports, combating the rising trade deficit.
"As Congress debates new international agreements and considers changing its trade rules, small firms have a lot at stake," Velázquez noted. "This committee will work to streamline the process and ensure small business interests are promoted, not marginalized, as they have been in the past."
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