House Small Business Committee Chairman Sam Graves (R-MO) and Small Business Agriculture, Energy and Trade Subcommittee Chairman Scott Tipton (R-CO) will today introduce legislation that will strengthen the coordination of the federal export promotion agencies and help more small businesses export. Although 95 percent of the business purchasing market exists outside the U.S., many small firms do not have the resources and personnel to utilize these opportunities, and rely heavily on federal and state agencies for assistance. This legislation comes as the United States celebrates World Trade Month during the month of May.
The Export Coordination Act of 2012, introduced by Graves, will increase coordination between state and federal agencies to make the export process more efficient, while reducing duplication and wasteful spending of federal trade promotion agencies. Currently, there are over 20 federal agencies that can assist with some or all of the steps in the export process. The Transparent Rules Allow Direct Exporting (TRADE) for Small Businesses and Jobs Act, introduced by Tipton, will help small businesses increase their exports and enter new markets by better understanding foreign regulations. Both pieces of legislation have been evaluated by the CBO to have no cost.
“Now that the free trade agreements with Colombia, South Korea and Panama are close to all being implemented, we need to encourage more small businesses to export,” said Chairman Graves (R-MO). “If a company doesn’t know how to export, they can’t take advantage of the lower tariffs provided by these agreements to increase their sales and hopefully hire new employees. Ninety-seven percent of identified U.S. exporters are small businesses, yet that only represents a small fraction of those who could compete globally – there is great untapped potential.”
“The Export Coordination Act will help small businesses start or increase their exports by strengthening the coordination of the federal export promotion agencies and establish stronger congressional oversight of such programs, all without any cost to the taxpayer. Many of the federal assistance trade programs overlap and offer duplicative services, including mirroring the same efforts as many individual state trade offices. With one percent of small businesses exporting, these agencies need to work in unison with the states to help assist as many small firms as possible. This legislation is a major step in improving the coordination between federal and state export promotion activities and ensuring that taxpayer money is being used most efficiently.”
“Navigating the export process can be complex and confusing for small businesses, and many simply do not have the time and resources to deal with it,” said Chairman Tipton. “Like the United States, foreign countries have a variety of rules, many of whom are not transparent or easy to understand. These rules and regulations can change daily, making it difficult for a small business to stay up-to-date on the current compliance regulations. In an effort to help small firms increase their exports, the TRADE for Small Businesses and Jobs Act would direct the pertinent agencies to monitor and collect up-to-date information on tariff and non-tariff laws, regulations, and practices. It will then be presented in a clear and easy-to-read format, and will serve as a resource for businesses looking to enter a new market.”
Export Coordination Act of 2012:
• To help exporters know where to go, the Export Coordination Act will direct the Trade Promotion Coordinating Committee (TPCC), through the National Export Strategy, to clearly outline the role of each agency in each part of the export process (Sec.3).
• The Export Coordination Act will direct the TPCC to coordinate with member agencies to provide a detailed listing of current and future Federal and State-led trade missions, trade fairs, and related activities (Sec.2).
• The Export Coordination Act will encourage stronger coordination with state trade agencies. The TPCC shall include one or more representatives from the State Trade Agencies (SIDO, NGA, etc.). This position will be selected by the President (Sec.4).
• The Export Coordination Act will create stronger congressional oversight by directing the TPCC to review the proposed annual budget for each federal trade promotion agency and provide their recommendations based on their assessment. It will be submitted to Congress, along with the strategic plan. In addition, the Inspector General of the U.S. Department of Commerce will prepare an annual report on the TPCC’s ability to carry out its duties. Both the TPCC report and IG report will be submitted to multiple committees of jurisdiction (Sec. 6).
TRADE for Small Businesses and Jobs Act:
• The TRADE for Small Businesses Act will help small businesses increase their exports and enter new markets by helping companies better understanding foreign regulations.
• The TRADE for Small Businesses Act will provide a one-stop source to monitor changes in foreign regulations and trade barriers.
The Small Business Committee has held several hearings on trade barriers for small business. A full committee hearing titled, “Help Wanted: How Passing Free Trade Agreements Will Help Small Businesses Create New Jobs” was held on April 6, 2011 and a hearing titled, "Bureaucratic Obstacles for Small Exporters: Is our National Export Strategy Working?" was held on July 27, 2011. The Small Business Subcommittee on Agriculture, Energy and Trade held a field hearing in Pennsylvania titled, “Impact of U.S. Trade Policies on Small Businesses and Manufacturing” on April 2, 2012.