Strong FTAs, Better Coordination Needed for Small Business to Export, Say Industry Reps
Better coordination, the reduction of non-tariff trade barriers and continued funding of the Ex-Im Bank are all crucial to help small businesses grow their exports, industry representatives told members of the House Subcommittee on Agriculture, Energy and Trade Feb. 28 during a hearing on "Small Business Trade Agenda: Opportunities."
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Congress should continue an aggressive trade agenda -- including passage of Trans-Pacific Partnership and the EU-U.S. agreements -- but new agreements should have provisions, including enforcement mechanisms, that eliminate non-tariff trade barriers, said Texas attorney and international trade consultant Daniel Ogden, testifying on behalf of the National District Export Council. Such barriers directly affect small business's trading ability, he said, since small businesses often don’t have the resources and cash flow to overcome the barriers. Ogden also said Congress should renew Trade Promotion Authority and generally “stop over-regulating, over-legislating, and over-taxing small business.” Adhering to a medley of export regulations is taxing for small businesses, which often have just one employee with other responsibilities who is also in charge of export compliance, Ogden said.
Small businesses are also stymied by a lack of information, said Raymond Arth, CEO of Ohio-based faucet manufacturing company Phoenix Products.. “Enhanced export training and technical assistance are key,” said Arth, testifying on behalf of the National Small Business Association and the Small Business Exporters Association. He recommended the creation of a “one stop shop” within the Commerce Department or the ITA, where a centralized, dedicated staff could field queries from small businesses and assist them in developing export markets.
Arth urged the committee to reintroduce legislation directing pertinent agencies to monitor and collect timely information on tariff and non-tariff laws, regulations and practices. The information should then be presented in a clear format, ideally on a centralized website, Arth said, to “serve as a resource for businesses.” (The text of HR-5513, introduced during the last session of Congress, is (here).
Arth also stressed the importance of the Ex-Im Bank obtaining congressional reauthorization of its lending authority, "so companies, such as Phoenix Products, have the certainty and predictability we need to level the playing field and compete in the international marketplace." He recommended Congress place even more focus on Ex-Im meeting and maintaining the 20 percent mandate of finance dollars going directly to small businesses. "Congress should not allow the percentage to drop below 20 percent or re-definitions of Ex-Im “financing” that are indirect (i.e. via suppliers)," he said. "New formulas that turn the 20 percent into a goal rather than a mandate, allow Ex-Im to avoid the mandate—as it has in the last couple of years—should not be an option." -- Jessica Arriens