FACT SHEET: USMCA Promotes Entrepreneurship and Small Business Growth

By at 10 December, 2019, 9:22 am


(Updated December 10, 2019)

The United States-Mexico-Canada Trade Agreement (USMCA) is a vital pact that fully modernizes the NAFTA agreement. The agreement will enhance and expand growth opportunities for small businesses and startups, and will strengthen U.S. entrepreneurship and investment.

USMCA is Critical to U.S. entrepreneurship and Small Business Growth. Congress Must ACT NOW to Pass the Agreement.

USMCA lowers barriers and costs associated with doing business across borders, removes outdated requirements and red tape, creates parity with regard to market access, protects the intellectual property (IP) of small businesses and entrepreneurs, and provides small firms with a permanent “voice” that will identify unforeseen or new barriers while assisting them in their trading efforts. USMCA is an agreement that is tailor-made for entrepreneurs and small businesses.

USMCA Boosts Economic Growth and Opportunity

The USMCA agreement will increase U.S. GDP by $68.2 billion and add 176,000 jobs, according to the United States International Trade Commission (USITC). As SBE Council president & CEO Karen Kerrigan stated about this report:

 “America’s small businesses benefit greatly from trade with Canada and Mexico, and the USITC report shows enhanced value and growth for our economy and all industry sectors under USMCA. The biggest gains noted in the USITC report are for the service sector and manufacturing, which are dominated by small businesses. The findings clearly demonstrate the value of USMCA to workers, small businesses, entrepreneurs and our economy and is another reason why every member of Congress needs to get behind passage of this important agreement.”   (Read the full USITC report here.)

USMCA is Pro-Small Business and Will Create Opportunities for Entrepreneurship   

Most of the U.S. firms that trade with Mexico and Canada are small to mid-size businesses*, and many businesses have established supply chains that reach across borders. An updated agreement will yield stability and growth for cross-border commerce.

USMCA Lowers Costs and Will Increase Small Business Participation

●  USMCA gives small businesses a voice. For the first time ever in a U.S. trade agreement, a chapter has been created in USMCA that solely focuses on helping small business access the markets of our trading partners while establishing a stakeholder platform that provides entrepreneurs the opportunity to offer continuous feedback on improving USMCA and market access for small firms.

●  USMCA lowers regulatory barriers and burdens for small businesses, and supports “good regulatory practices” that will reduce duplicative red tape and costs.

●  USMCA eliminates a “local presence” requirement for cross-border service providers, which vastly lowers costs. Small businesses will no longer have to open a foreign office to do business in these countries.

●  USMCA increases the de minimis level of shipment value, which reduces costs and opens the door for expanded markets for online and brick-and mortar small businesses alike.

●  USMCA includes specific support for small and medium-sized businesses regarding government procurement that focuses on policies to promote participation.

●  USMCA addresses digital economy realities, which will ease friction and costs and prohibits duties on products distributed electronically. USMCA limits data localization requirements.

●  USMCA opens markets and new opportunities for small farmers and food-related businesses to export into Canada and Mexico.

Protects the Intellectual Property (IP) of Entrepreneurs

●  USMCA includes strong intellectual property (IP) protections. IP is the lifeblood for many entrepreneurs, startups and small businesses. A Committee on Intellectual Property Rights will engage on “intellectual property issues particularly relevant to small and medium-sized enterprises” to reduce both red tape and transaction costs.

●  USMCA extends Canada’s copyright terms by 20 years, putting them on par with U.S. standards and gives U.S. small business owners and entrepreneurs more time to benefit financially from their creations.

●  USMCA beefs up border enforcement against suspected counterfeit goods.

●  USMCA includes the highest standard of protection for trade secrets of any free trade agreement.


Small Businesses Dominate Trade with Mexico and Canada

USMCA Makes it Easier for More U.S. Small Firms to Go Global   

According to the most recent data (2017) from the Census Bureau small to mid-size businesses dominate trade with Mexico and Canada.

Export Data

●  Of the 55,755 U.S. firms that export to Mexico, 57.6 percent have less than 20 employees, 72 percent have less than 50 employees, 81.4 percent have less than 100 employees and 93.6% have less than 500 employees.

●  Of the 94,278 U.S. firms that export to Canada, 61.8 percent have less than 20 employees, 76.6 percent have less than 50 employees, 84.5 percent have less than 100 employees and 94.7percent have less than 500 employees.

Import Data

●  In terms of imports, of the 15,592 U.S. firms that import from Mexico, 58 percent have less than 20 employees, 67.8 percent have less than 50 employees, 74.3 percent have less than 100 employees, and 86.6 percent have less than 500.

●  Regarding Canada, there are 17,374 U.S. importers and 43.2 percent have less than 20 employees, 55.4 percent have less than 50 employees, 64.9 percent have less than 100 employees, and 82.9 percent have less than 500 employees.


Read the USTR Fact Sheet on how USMCA benefits small businesses.

Read SBE Council president & CEO’s Op-ed “Why Small Businesses and Entrepreneurs Win Under USMCA.”




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