SBE Council Responds to Preliminary U.S.-Mexico Trade Agreement

By SBE Council at 28 August, 2018, 12:28 pm

NEWS

For Immediate Release

Washington, D.C. – On August 27, President Donald Trump announced a preliminary US-Mexico Trade Agreement to update NAFTA, which at this point does not include Canada. Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement about the preliminary agreement:

“It is positive to see trade negotiations moving forward, as we have advocated for a modernized NAFTA that protects intellectual property, creates more growth opportunities for small businesses and makes adjustments in light of 21^st century business realities. We are hopeful that Canada fully engages in these vital negotiations, as a trilateral agreement is far superior to a bilateral pact and NAFTA has created relationships and supply chains that, if fragmented, would be wasteful and harmful. Most of the U.S. firms that trade with Mexico and Canada are small businesses, and many businesses have established supply chains that reach across both borders. An agreement that includes both of our neighbors will yield stability and growth for cross-border commerce. This will also lower regulatory barriers and burdens for small businesses, as navigating one set of rules is obviously more efficient than dealing with two.

“We continue to review what has been publicly released about the preliminary Mexico agreement and we look forward to the detailed text.  There are positives – such as intellectual property protections and modern rules that govern digital trade – and what could be challenges, such as complex content requirements and labor/wage rules that may raise costs for small businesses and set a precedent for other trade agreements. We are pleased to see negotiations move from a hard sunset that would end the agreement after five years, to a review process. Good trade agreements increase trade and opportunity for all parties involved, enable a competitive environment that encourages entrepreneurship, and provide certainty through a framework where certain rights – like IP protection – are guaranteed. Our organization and its members will continue to engage with the Administration and Congress on this agreement to ensure small businesses can more easily access the Mexican and Canadian markets to take advantage of the growth opportunities they offer.”

According to the most recent data (2016) from the International Trade Administration small to mid-size businesses dominate trade with Mexico and Canada.

Export Data

Of the 57,098 U.S. firms that export to Mexico, 57.7 percent have less than 20 employees, 72.3 percent have less than 50 employees, 81.4 percent have less than 100 employees and 93.6% have less than 500 employees.

Of the 86,526 U.S. firms that export to Canada, 59.9 percent have less than 20 employees, 75.3 percent have less than 50 employees, 83.7 percent have less than 100 employees and 94.4 percent have less than 500 employees.

Import Data

In terms of imports, of the 15,481 U.S. firms that import from Mexico, 57.6 percent have less than 20 employees, 67.9 percent have less than 50 employees, 74.6 percent have less than 100 employees, and 86.8 percent have less than 500.

Regarding Canada, there are 17,277 U.S. importers and 43.3 percent have less than 20 employees, 55.7 percent have less than 50 employees, 65.3 percent have less than 100 employees, and 83.0 percent have less than 500 employees.

CONTACT:  Karen Kerrigan, kkerrigan@sbecouncil.org

Raymond Keating, Chief Economist, 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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