Although we’ve seen signs of a slowly improving economy, we must remember that our nation’s potential is far better than this. Despite the improved unemployment rate, there is a combination of data points that is cause for concern.
April’s 165,000-job gain is slower than previous months, and the underemployment rate — which includes those who have stopped looking or settled for part-time work — is a high 13.9 percent. April’s labor force participation rate, like March’s, remained at 63.3 percent, its lowest level since 1979. If the labor force participation rate had not declined from 2009, the unemployment rate would be 10.9 percent instead of 7.5 percent.
To address our sluggish economy, Washington should focus on creating a better environment for private-sector job growth and removing barriers for businesses, especially small businesses, to grow and create jobs. Part of this focus should include helping small businesses enter the trade marketplace.
May is World Trade Month, an appropriate time to evaluate how strong our nation’s trade agenda is proceeding. Although 96 percent of the total business market exists outside the United States, only 1 percent of small businesses currently export. The Department of Commerce has concluded that many small and medium-size businesses could sharply boost exports by entering new markets. There is great potential here.
Small businesses play an important role in our economy, and they should play a more important role in the U.S. trade strategy. In 2012, total U.S. exports reached $2.2 trillion, which is nearly 14 percent of the gross domestic product. Those exports helped support nearly 10 million jobs, including about 4 million small-business jobs.
Engaging the export market provides great return on the investment for small companies. A United States International Trade Commission survey found that exporting small and medium-size manufacturers in 2009 had more than twice the total revenue of their non-exporting counterparts. And they experienced revenue growth of 37 percent from 2005 to 2009, while total revenue declined by 7 percent for non-exporting small and medium-size manufacturers over the same period.
Last week, we introduced three pieces of legislation to increase small-business exports, all at no cost to the taxpayer. These bills are aimed at reducing some of the key barriers and obstacles faced by small-business exporters.
The Export Coordination Act, sponsored by Rep. Sam Graves, will establish stronger congressional oversight and coordination of the federal export promotion agencies through the Trade Promotion Coordinating Committee. The Government Accountability Office has found that strengthening interagency coordination will help reduce agency duplication and increase the quality of services provided to small exporters. Currently, there are more than 20 federal agencies that provide some or all of the steps in the export process, and many small businesses do not know where to go for the information relevant to their needs.
The State Trade Coordination Act, sponsored by Rep. Steve Chabot, would establish the framework to ensure that federal and state trade agencies work in unison to assist their local exporters. And increased coordination and education will help more small businesses access the tools they need to export. Currently, there is no process in place that coordinates the resources of the states with the federal government. The State Trade Coordination Act will increase the cooperation of relevant support offices, resulting in more efficient delivery of services for small businesses.
The TRADE for Small Businesses and Jobs Act, sponsored by Rep. Scott Tipton, would direct trade agencies to monitor and collect up-to-date information on changes to tariff and nontariff laws, regulations and practices and display them in a clear and easy to read format. Understanding foreign regulations is a key barrier for small exporters.
Although a substantial amount of the world’s consumers exists outside the U.S., many small firms do not have the resources and personnel to take advantage of export opportunities. Small businesses make up about 34 percent of those total export dollars, but the greatest barrier to them doing more is a confusing, duplicative trade system.
Removing barriers and simplifying the trade process should be part of Congress’s bipartisan strategy to improve the overall economy. The Small Business Committee is focused on identifying common-sense solutions to reduce the barriers for small-business exporters at no cost to taxpayers. This legislation is exactly the right step in that direction.
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