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Jobs on Main Street, Customers Around the World: A Positive Trade Agenda for US Small- and Medium-Sized Enterprises

by Ron Kirk, United States Trade Representative

Prepared Remarks at the USTR Conference on Small- and Medium-Sized Enterprises, Peterson Institute for International Economics, Washington, DC
January 21, 2009


As Prepared for Delivery

Thank you, Administrator Karen Mills, for taking the time to be with us today. The Small Business Administration is a critical partner in our efforts to support small business exports.

I would also like to thank the Coalition of Service Industries, the Computing Technology Industry Association, and the National Association of Manufacturers for their support in putting this conference together, and Fred Bergsten and his team here at Peterson for hosting us today.

I am delighted to see so many of our small- and medium-sized business leaders here today—some of you from as far away as New York, Florida, Montana, and California. I want to thank each of you for joining us to reflect on where we stand and brainstorm where we go next.

We convened this conference to give us a chance to focus on the kinds of market access opportunities that could boost exports by small- and medium-sized businesses and to shine a light on the kinds of trade barriers that might hold those businesses back. Ultimately, our goal is to develop and implement the strongest, most robust possible trade policy for small- and medium-sized businesses.

Today, there are nearly 30 million small- and medium-sized businesses of every kind. And during the last 15 years, those businesses have generated almost two-thirds of all new employment. But even among these star job creators, one kind of business shines brightest: businesses that export grow faster, add jobs faster, and pay higher wages.

I know that many of you in this room are small- or medium-sized business owners yourselves. Critical enterprises like yours—from multigenerational family operations to brand new startup companies—are the backbone of the American economy. Today, there are nearly 30 million small- and medium-sized businesses of every kind. And during the last 15 years, those businesses have generated almost two-thirds of all new employment. But even among these star job creators, one kind of business shines brightest: businesses that export grow faster, add jobs faster, and pay higher wages.

In short, smaller exporters punch above their weight. And we can create jobs across America by helping more small- and medium-sized businesses to expand on their potential in markets around the world.

We can do this in two ways. First, by increasing the number of small- and medium-sized businesses that export. Today, only one in every 100 small businesses is marketing its products abroad. We need to find ways to help the other 99 create jobs by taking their businesses global.

Second, by working to grow the export totals of small- and medium-sized business. Even though small- and medium-sized businesses account for 97 percent of American exporting companies, their exports are only 30 percent of the national goods export total. And most small- and medium-sized exporters do business with only one product in one country. So we need to find ways to help these businesses tap into the full range of global markets and create jobs by expanding their export sales.

It is the special commitment of the Office of the United States Trade Representative (USTR) to help small and medium-sized businesses succeed through exports. We are bringing small- and medium-sized businesses to the table through our advisory committee system. More than 100 have joined us and are actively sharing their ideas for a trade policy that benefits all small- and medium-sized enterprises.

At the same time, we are partnering with the Small Business Administration (SBA), the Commerce Department, the Export-Import Bank, and others across the federal government to give small businesses the resources and the opportunities they need to succeed.

Our roles in that job-creating partnership are clear: the SBA and Commerce Department provide trade promotion resources for small- and medium-sized businesses; the Export-Import Bank can provide financing; and USTR shapes trade policy to make trade work better overall for America's small- and medium-sized businesses. Here's how.

Today, I am announcing that Jim Sanford, our assistant United States trade representative for market access and industrial competitiveness, will also take responsibility for the agency's small business portfolio. In keeping with our commitment to smaller exporters, as well as the recommendations of firm advocates for small- and medium-sized businesses, Jim will be our point person to make sure that our trade decisions track with the needs of small business exporters.

Over the course of his career, Jim has tackled barriers to trade affecting American businesses of all sizes. Jim has more than 17 years experience with international trade policy and he has spent more than 10 of them creating trade opportunities for American workers at USTR. Both Jim and his staff are committed to using and expanding that knowledge to directly tackle the issues facing small- and medium-sized businesses.

The success of small- and medium-sized businesses is a priority for everyone at USTR—in fact, this week many offices are holding meetings with small- and medium-sized exporters in their areas to talk about how we can improve trade policy for America's smallest businesses and biggest job creators—but the creation of an office dedicated specifically to smaller exporters will promote coordinated initiatives among our offices, and create a singular responsibility for reporting to me on our overall progress.

USTR is also following through on a commitment made this past October to address the needs of small- and medium-sized businesses in an agency-wide review of our policymaking and enforcement efforts.

Just this week, we received the first results from a three-part USTR-commissioned International Trade Commission (ITC) study on the role of small- and medium-sized businesses in US trade. Our agency-wide small business working group is combing through those results for hints on how trade policy can help small- and medium-sized exporters reach their export potential. In our first analysis, we can already see that exports from smaller businesses have experienced incredible growth over the last decade and, with the right help, they can continue to expand for the next 10 years.

We convened this conference to give us a chance to focus on the kinds of market access opportunities that could boost exports by small- and medium-sized businesses and to shine a light on the kinds of trade barriers that might hold those businesses back.

You'll find the executive summary of the ITC's results in your welcome packet, and we invite you to participate in the ITC's upcoming hearings on small- and medium-sized exporters—you can find the details on ITC's website—as they continue their fact-finding investigations of these critical enterprises.

USTR is already prioritizing the unique needs of small- and medium-sized exporters when we deal with our trading partners. We're tackling obstacles to trade that loom particularly large for small- and medium-sized businesses—things like cumbersome regulatory processes, complex rules of origin for goods, and requirements that force companies to open offices in foreign nations, even when Americans can get the job done from offices here at home.

As we move forward with negotiations to expand US trade in the Asia-Pacific through the Trans-Pacific Partnership, we are going even further. In those negotiations, we will have a small- and medium-sized business point person, and we will consistently emphasize the needs of smaller businesses—as well as small business issues like competitiveness and transparency—alongside traditional negotiation topics.

And USTR's year-long effort to enforce Americans' trade rights under our existing agreements is already paying dividends to small- and medium-sized businesses. When unfair trade practices inhibit the ability of small- and medium-sized exporters to get their goods and services into global markets, we are committed to knocking them down—through negotiations if possible and legal action if necessary.

Through these efforts, we are opening the road to recovery for more American businesses and workers.

In the short term, global consumers in fast-recovering nations can fuel American recovery by purchasing highly coveted ‘Made in America' goods and services. And in the long term, those same global consumers and global purchases can fuel a new era of growth and prosperity.

The opportunities for small- and medium-sized businesses are out there. The digital economy and the enormous expansion of global transportation networks have vastly increased the trade opportunities available to smaller companies. And that has ripple effects all across the American economy.

Even businesses that never directly export can flourish by taking part in global supply chains—producing the parts, products, or services that are the raw materials for goods that end up in the global marketplace. Workers hundreds of miles from a border or an ocean can find jobs supported by exports or bolstered by imports used to manufacture American products. And families all across America can build their lives with money earned through export-supported work.

So we're going to keep working hard to make sure that every American business and every American worker can reap the benefits of trade by producing American goods for export or selling American goods and services overseas.

Coming up, we've got representatives from across the federal government, including Ambassador Miriam Sapiro, from small businesses, and from larger companies that depend on small business suppliers. They're here to share their experiences, but also to solicit your insights—to start a conversation about the future of small- and medium-sized exporters.

Together, we can and will shape trade policy to support smaller businesses and generate bigger job growth.


RELATED LINKS

Book: Understanding the Trans-Pacific Partnership January 2013

Book: The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment November 2012

Policy Brief 12-21: How Can Trade Policy Help America Compete? October 2012

Policy Brief 11-20: The United States Should Establish Permanent Normal Trade Relations with Russia November 2011

Policy Brief 11-8: What Should the United States Do about Doha? June 2011

Book: The Long-Term International Economic Position of the United States April 2009

Op-ed: Trade: An Opportunity About to Be Lost? May 20, 2011

Op-ed: New Imbalances Will Threaten Global Recovery June 10, 2010

Op-ed: How Best to Boost US Exports February 3, 2010

Op-ed: Cooling the Planet Without Chilling Trade November 13, 2009

Paper: Submission to the USTR in Support of a Trans-Pacific Partnership Agreement January 25, 2010

Working Paper 09-2: Policy Liberalization and US Merchandise Trade Growth, 1980–2006 May 2009

Policy Brief 09-2: Buy American: Bad for Jobs, Worse for Reputation February 2009

Paper: Report to the President-Elect and the 111th Congress on A New Trade Policy for the United States December 17, 2008

Book: American Trade Politics, 4th edition June 2005

Op-ed: The Payoff from Globalization June 7, 2005

Policy Brief 08-5: World Trade at Risk May 2008