This weekend, millions of Americans will celebrate “Small Business Saturday” by supporting the backbone of our economy, and the biggest job creators we have—American small businesses. And though all of us can have an outsized impact by “shopping small” this weekend, the greatest opportunity for many companies to grow their businesses—and our economy—is to expand their reach beyond Main Street and take their Made-in-America goods and services to the global stage.
More than 95 percent of the world’s consumers live outside of the United States, so there are significant opportunities for small businesses to grow their bottom line by exporting to new markets around the world. The export of Made-in-America goods and services supports nearly 12 million jobs here at home that pay up to 18 percent more, on average, than non-export-related jobs. And of the more than 300,000 American companies that already export, 98 percent of them are small or medium-sized businesses. But the United States has over 28 million small businesses, which means we have to work harder to help more American companies reach global customers.
That’s where the Trans-Pacific Partnership (TPP) will help. In addition to eliminating more than 18,000 taxes that various countries impose on American exports for businesses of all sizes, TPP would be the first trade deal to specifically target some of the barriers that shut our small businesses out of international markets. The agreement is also the first to have requirements that specifically provide small business exporters with information and tools to find new customers and market opportunities in countries that represent nearly 40 percent of the world’s GDP.
TPP will also help level the playing field, so more entrepreneurs can reach foreign markets. Nearly half of America’s exported goods go to the 20 countries with which we have other trade agreements. Since 2009, our exports have grown far more rapidly to our trade agreement partners than to countries with which we have no trade agreement.
Small businesses face exporting challenges in ways that their large competitors do not. American entrepreneurs want to export to Asia’s growing middle class, but foreign rules are often rigged against them. Small firms can face significant hurdles when their goods and services reach new shores, including taxes as high as 100 percent in manufactured goods and 700 percent in agriculture products, as well as “behind the border” challenges like duplicative and complex customs rules that undercut their export potential. While larger companies can often absorb the costs of a shipment being unfairly detained or delayed, small businesses simply cannot. TPP will help—beyond the thousands of new tariff reductions for American exporters, the agreement will help to ease customs procedures and expedite release of shipments.
Trade agreements like TPP also benefit small businesses that may not export directly, but supply companies that do. For instance, small firms account for more than 30 percent of employment in the U.S. auto industry’s supply chain. As TPP helps automakers increase their exports, their small suppliers will benefit as well. Currently, automotive products face tariffs in TPP markets as high as 70 percent, putting U.S. suppliers at a competitive disadvantage.
Finally, the Internet has opened up enormous new opportunities for small businesses to reach global consumers through e-commerce websites and online platforms while protecting against the risks associated with doing business abroad. For firms to leverage these platforms, governments must clear—not create—obstacles to trade. TPP would represent substantial progress in this regard for U.S. small businesses by preserving a free and open Internet, preventing the spread of “forced localization” of technologies and servers, and prohibiting the imposition of customs duties or other discriminatory measures on digital products.
More American companies must gain access to Asian markets to better compete in the global economy. By 2030, 3.2 billion middle class consumers are projected to live in the Asia-Pacific region, one of the most dynamic and fastest-growing in the world. If the United States leads on trade by writing the rules for this fast-growing region, our small businesses will sell more abroad and support more good jobs here at home. Without TPP, other countries—often ones that do not share our values and interest—will write weaker rules that harm our small businesses, our workers, and our overall competitiveness.
With a level playing field like the one TPP seeks to provide, American companies not only compete, they win. And small business owners know it—in the National Small Business Association’s 2013 Exporting Survey, more than 85 percent of respondents said their company benefited from free trade. We urge Congress to ratify the Trans-Pacific Partnership so more American small businesses can grow their revenues and payrolls by taking advantage of new opportunities to participate in the global economy.
About the author: Maria Contreras-SweetSBA AdministratorMaria Contreras-Sweet is Administrator of the U.S. Small Business Administration and a member of President Obama’s cabinet. The SBA helps both Main Street and high-growth small businesses get access to capital, counseling, federal contracts, disaster assistance and more.
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