Boosting Trade from Small and Medium-Sized Enterprises

By October 5, 2009Trade

The NAM applauds today’s announcement that the U.S. Trade Representative (USTR) is seeking to improve how trade policy can bolster the export opportunities of small and medium-sized enterprises (SMEs). As SMEs account for one-third of all U.S. exports, this is a very important step on the part of USTR. The NAM represents thousands of SME exporters and looks forward to working with USTR, Commerce, and other agencies on this very welcome initiative.

SMEs already benefit greatly from U.S. trade policy. For example, SMEs account for 95 percent of all U.S. exporters to NAFTA, and ship an average per company of $630,000 a year to that market – pretty important sales to smaller companies. And SMEs account for 44 percent of U.S. exports to the nations of CAFTA — averaging $440,000 per company.

However, while SMEs benefit strongly from Free Trade Agreements and multilateral tariff-cutting negotiations, some aspects of trade policy bear more heavily on SMEs than large exporters. For example, complex and confusing rules of origin (where a product is produced) and labeling requirements are extremely difficult to comply with for small firms. Different foreign product standards and costly testing and certification requirements can pose insurmountable obstacles for some smaller firms. Focusing new trade policy initiatives on these obstacles in addition to continued market opening could really boost smaller company exports.

USTR’s request that the International Trade Commission examine export obstacles and opportunities is a great next step. Expanded policy attention to the particular export challenges faced by SMEs can pay big dividends, particularly if coupled with expanded export promotion services to get the job done. The NAM thinks that doubling smaller company exports would be a great goal, adding over $300 billion to U.S. exports, and lots of high-paying jobs.

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