PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Keating Testifies Before Small Business Committee: Trade has Widespread Benefits for Entrepreneurs and Small Businesses

By at 11 April, 2018, 3:50 pm

…U.S. Must Reclaim Global Leadership on Trade

FOR IMMEDIATE RELEASE

Washington, D.C. –  The U.S. House Small Business Committee hosted a hearing today on The State of Trade and Small Business,” and Small Business & Entrepreneurship Council (SBE Council) Chief Economist Raymond Keating provided testimony on several key issues, including: the many benefits of trade for small businesses and entrepreneurs, the need for the U.S. to expand trade agreements to increase growth opportunities for small firms, the importance of protecting intellectual property and prioritizing this issue in NAFTA, and the harmful effects of tariffs.

SBE Council chief economist Ray Keating gets ready to talk trade and small business at a House Small Business Committee hearing on April 11, 2018.

Read Keating’s full testimony here.

Watch the hearing here.

Keating noted the importance of trade for our economy, as it accounts for a significant portion of U.S. economic growth, at least 40 percent in recent times. He also reminded committee members that trade is deeply integrated in the U.S. economy. As Keating said in his opening statement:

“Consider that real total trade in 1955 equaled 6.1 percent of real U.S. GDP.  That grew to nearly 30 percent in 2017.”

Keating also reviewed the data regarding the dominant role U.S. small businesses play in trade: 76.2 percent of U.S. exporters have fewer than 20 employees, and 86.6 percent fewer than 50 workers.  On the import side, the story is similar: 75.2 percent of importers have fewer than 20 workers, and 85.5 percent fewer than 50 workers.

He reinforced comments made by his fellow panelists at the hearing that more trade means more growth and opportunity for small businesses.  Keating said:

“The U.S. needs to reclaim its global leadership on trade, and to negotiate new agreements. This will create more opportunities for growth, and allow our small businesses to reach the more than 95 percent of world consumers who live outside U.S. borders.”

Keating agreed with other panel members that tariffs, and the threat of tariffs, are not positives from the small business perspective.  He said:

“Predictability and certainty are critical for small businesses and the markets.  Negotiations and talks – with the Chinese, for example – is a far better strategy than tariffs and retaliation.”

With respect to intellectual property (IP) protection, Keating said that trade agreements and negotiations give the U.S. an opportunity to hammer out specifics on accountability that strengthen and enforce IP rights.  He added that IP needs to be a priority, not an afterthought, in NAFTA.  He also noted that working more closely with the Chinese (with an agreement in place) to help them better understand that a strong system of IP rights and protections is necessary to move from a low-cost manufacturer to a country driven by innovation and value-added endeavors (which the country is striving to become).

In response to a question about trade deficits, Keating said that they are essentially irrelevant, and the key numbers and trends to watch are whether imports and exports are growing.

SBE Council has been active on the trade issue for nearly twenty-five years and has been an ardent and consistent supporter, across Administrations, for more trade agreements and trade promotion authority for the President.

CONTACT:

Raymond Keating, Chief Economist

631-909-1122

rkeating@sbecouncil.org

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: www.sbecouncil.org. Follow on Twitter: @SBECouncil

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