Overcoming Obstacles that Hinder Exports for Smaller Companies

By December 3, 2010Trade

The U.S. International Trade Commission recently issued a report that documented how critical it is to open markets to U.S. exporters, not just for the large multinational companies with an established global presence, but also to small- and medium-sized enterprises (which includes manufacturers and service-industry businesses). 

We highlighted some of the findings of “Small and Medium- Sized Enterprises: Characteristics and Performance” in this earlier post, emphasizing the substantial exports that small- and medium-sized manufacturers (SMMs) already make and the potential for even greater exports.

But there are obstacles to the SMMs, the ITC reports:

Trade Barriers That Disproportionately Affect SME Export Performance

  • Burdensome or discriminatory government regulations in many foreign markets disproportionately affect SMEs. U.S. SMEs may lack the staff, expertise, or financial resources to dedicate to foreign compliance.
  • SMEs are more likely than large firms to identify high tariffs as a substantial impediment to exporting. SMEs account for a high share of exports in apparel and certain processed food industries that face generally higher foreign applied tariffs.
  • Standards and certification are important non-tariff hurdles for SME manufactured goods exporters. In particular, licensing, residency requirements, and commercial presence requirements present challenges for SME services providers that export.
  • Manufacturing SMEs reported greater burdens relative to large firms in most areas, including “customs procedures,” “high tariffs,” and “preference for local goods in foreign market.”
  • For SME manufacturing exporters, the most frequently cited impediment to exporting was “obtaining financing,” “high tariffs,” or “transportation and shipping costs.” In contrast, large manufacturing firms identified either “foreign regulations,” or “preference for local goods or services in a foreign market” as their most frequently cited impediment.

The National Association of Manufacturers and Department of Commerce have long worked in a partnership to overcome those obstacles, with a Commerce commercial officer seconded to the NAM’s offices.

Next Monday, the NAM and Commerce will take that cooperation to higher level with an announcement about the NAM’s involvement with the New Market Exporter Initiative. Secretary Gary Locke and NAM President John Engler will speak, and FedEx will play a prominent role.

The goal? Realize the potential.  Export more U.S.-manufactured goods. And create jobs.

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