A Louder Voice for Smalls in Trade Talks?

An assistant U.S. trade representative for small business could help smalls boost exports.

By Jonathan N. Crawford, Researcher-Reporter, the Kiplinger letters

April 28, 2009

This may be the year small business gets a seat at the trade talks table. Small Business Administration head Karen Gordon Mills wants more interagency cooperation and may push to create an assistant U.S. trade representative to speak for smalls.

Although Uncle Sam and trade associations provide assistance to small businesses that sell overseas, small companies are sometimes an afterthought in trade negotiations. Having a government advocate on their side would go a long way toward making sure their voices are heard on economic and policy matters that affect them.

Small exporters typically have tighter margins and lack resources needed to navigate hurdles abroad. Moreover, since transactions of small firms are generally not as voluminous as those of large businesses, the fixed licensing and inspection costs tend to be higher on a per unit basis.

The push for an assistant U.S. trade rep for small business comes from Sen. Mary Landrieu (D-LA), head of the Senate Committee on Small Business and Entrepreneurship; Sen. Olympia Snowe (R-ME) the committee’s ranking member; and Sen. Charles Schumer (D-NY). The senators believe that a small business expert in the highest realms of trade policy is necessary to ensure that the needs and concerns of small businesses are addressed.

The Office of the United States Trade Representative (USTR) appears to be considering the idea. “The president’s trade policy agenda clearly commits to trade and commercial policies that will help small and medium-sized firms become more integrated as effective competitors in the global marketplace,” says agency spokeswoman Debbie Mesloh.

James Morrison, president of the Small Business Exporters Association and a member of the Advisory Committee for Trade Policy and Negotiations, says: “I don’t think as a rule, they [USTR] go into a negotiation with a strategic orientation of ‘How can we get some real leverage for U.S. small business out of this negotiation.’ And I don’t think it’s hostility, and I don’t think it is indifference. I just think there is nobody there to provide that perspective.”

Morrison says that a small business representative in the trade office could focus largely on expanding the government’s outreach to firms on Main Street. In Morrison’s view, “it would be someone who could talk to Main Street and say ‘What do you guys want? What would be really great for you to have? What are your worries? What are your concerns? What are the problems you’ve encountered in trying to trade? How can we help?’”

Fewer than 1% of American small businesses sell abroad now, versus 15% or so of their counterparts from other countries. Morrison says that boosting small business exports could pay vast dividends, not only to smalls but also to the U.S. economy as a whole. He says that ramping up small business exports to 3% could put a huge dent in the trade deficit.

Small businesses interested in exporting can receive help from Export Assistance Centers, which provide market research, sponsor trade events to promote products and services plus offer counseling and advocacy throughout the export process. Advice is also available from export advisers at any one of 56 District Export Councils throughout the U.S.

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