Better Coordination Key to Helping Small Businesses to Export
Originally published on The Journal of Commerce by Rep. Sam Graves | Sep 10, 2013 11:04AM EDT
Virtually every small business is interested in expanding its customer base. Exporting goods and services provides a tremendous opportunity for small businesses to reach new markets, find more customers and contribute more to the U.S. economy.
The International Trade Commission reports that small businesses that exported saw average revenue growth of 37 percent from 2005-09 compared to a decline of 7 percent for companies that did not export. Despite the obvious potential for expansion, however, 99 percent of American small businesses do not export.
Why do small companies decide not to export given the growth potential it provides? The answer may lie in a familiar place: the daunting bureaucracy of the federal government and uncertainty about the overall process of selling abroad. According to the National Small Business Association 2013 exporting survey, the top reason small businesses do not export is that they don’t know where to begin.
More than 20 federal agencies currently provide some or all of the steps in the export process. As is the case in navigating any sort of bureaucratic maze, this puts small businesses at a competitive disadvantage compared to their larger counterparts because small businesses lack the resources of large businesses.
To help American businesses export, Congress established the Trade Promotion Coordinating Committee more than 20 years ago to better coordinate the federal government’s trade promotion resources. Collaboration is particularly helpful to small and medium-sized businesses, because an increased level of collaboration will help them to better understand the entire process and the exact role of each agency.
As chairman of the Small Business Committee, I frequently hear about the challenges and rewards that come with exporting. Earlier this year, Jenny Fulton, CEO of Miss Jenny’s Pickles in Kernersville, N.C., who has been exporting her products for two years, testified at a Small Business Subcommittee hearing. She said exporting barriers can be challenging, especially for small businesses, and that “barriers are alive and well, and they pose a major competitive challenge to U.S. industry and agriculture.”
Because of the barriers Miss Jenny’s Pickles and other small businesses face, I requested a report from the Government Accountability Office on the collaboration efforts of the TPCC. The GAO’s report confirmed the need for better collaboration between our export programs, and stated that “decision makers lack a clear understanding of the total resources dedicated across the country and around the world by TPCC member agencies to priority areas, such as increasing exports by small- and medium-sized businesses.”
To read more about U.S. exporting and exporters, see the JOC’s coverage of the Top 100 U.S. Exporters
The TPCC’s goal is to bring together the trade promotion programs to create an efficient process for small businesses to identify new export opportunities. When these programs lack coordination, it constitutes a missed opportunity to utilize the federal resources in an efficient manner to address their needs. In addition to complicating the export process, programs that are redundant or overlap are a waste of taxpayer money that could be better used elsewhere.
To help address this problem, I introduced the Export Coordination Act, which would strengthen congressional oversight and coordination of the federal export promotion agencies. This bill was approved by the House Foreign Affairs Committee in July and awaits passage in the House.
By improving coordination, we can limit overlap, reduce barriers to trade and streamline the export process. This streamlining will help all businesses that export or wish to export, but would be especially helpful for small businesses seeking the resources they need to reach new markets.
While our economy continues a slow path to recovery, Washington needs to focus on ways to help fuel economic growth. This includes helping our most prolific job creators — our small businesses — succeed. By simplifying the international trade process, we can make it easier for small businesses to begin exporting their goods and services. These commonsense reforms will help our economy to prosper, expand and create jobs.