Small Business and Entrepreneurs Benefit From Trade

By SBE Council at 10 June, 2015, 2:30 am

Advocate calls for swift passage of TPA to help America’s entrepreneurs access and compete in the global marketplace

Washington, D.C. – At a Capitol Hill press conference today, the Small Business & Entrepreneurship Council (SBE Council) joined congressional trade leaders and fellow advocacy groups to call for swift passage of Trade Promotion Authority (TPA).  SBE Council’s president & CEO Karen Kerrigan said the U.S. needs to move more aggressively and swiftly in pursuing and finalizing trade agreements, which will help America’s entrepreneurs access global consumers. In turn, these entrepreneurial firms will grow more quickly, invest and innovate more vigorously, and create more quality jobs.

“We compete in a global economy, and small businesses must be able to efficiently and seamlessly access global markets to grow. With 95% of consumers living outside U.S. borders and two-thirds of the world’s purchasing power in foreign countries, forging trade agreements means forging a path for growth for America’s small businesses.  TPA is a vital tool for our president to negotiate and accelerate trade agreements.  These agreements will lower tariff and non-tariff barriers, embed protections with respect to intellectual property, and bring regulatory cohesion to make exporting less costly and complex for small businesses. Efforts to reduce governmental barriers to trade – including Congress passing trade promotion authority – is essential for small business growth,” said Kerrigan

With TPA, the president has the authority to negotiate trade agreements, but Congress has the final say on approving these agreements with an up-or-down vote.

“Various interest groups are using scare tactics to stop TPA and trade agreements already in the works. If successful, their efforts would undermine U.S. leadership, our competitiveness, and an economic future that has more opportunities for entrepreneurs and our workforce. Trade is a clear positive for America and our economy,” added Kerrigan.

SBE Council is a nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For more than twenty years SBE Council has successfully fought for policies and initiatives that strengthen the ecosystem for startups and small business success. For more information, visit www.sbecouncil.org. Follow on twitter: @SBECouncil.

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FACTS ABOUT TRADE

TRADE MATTERS TO U.S. ENTREPRENEURS & SMALL BUSINESSES

According to 2014 data from the International Trade Administration:

• A record 305,000 U.S. companies exported goods in 2012, of which the majority (297,995, or 97.7 percent) were small or medium-sized enterprises (SME’S) with fewer than 500 employees, according to a 2014 report by the International Trade Administration.
• SMEs were responsible for 33 percent of goods exported in 2012.

• Of manufacturers, 97 percent were small and medium-sized firms, accounting for 18 percent of the sector’s export value.
• Of firms engaging in trade, 83,000 both exported and imported merchandise in 2012. Of these, 79,000 (or 95 percent) were SMEs.
• SMEs accounted for 97 percent of identified importers in 2012.

Reducing trade barriers grows the economy and opens new markets for U.S. small businesses. 

Growth in GDP: In 1960, exports accounted for 5.1 percent of U.S. GDP, and total trade (exports plus imports) equaled 9.5 percent of GDP. In 2014, exports accounted for 13.4 percent of GDP, and total trade came in at 29.9 percent of GDP.

Growth in Real GDP: In terms of growth in real GDP, real export growth accounted for 23.4 percent of real GDP growth from 2000 to 2014, and real total trade equaled 46.1 percent of GDP growth.

Export Growth Proven in FTA Countries: In all but one case, growth in U.S. exports to nations that we have free trade agreements with has been solid. That translates into expanded opportunity and growth for the small businesses that overwhelmingly populate the U.S. exporting sector. The bottom line: export growth means small business growth. 

Small Businesses Want to Go Global.

According to a 2011 survey by SBE Council and the Financial Services Forum, 17% of small businesses reported that going global was part of their future growth strategy. We need to lower trade barriers to help make these plans a reality. Trade agreements accomplish this.